There is only one boss. The customer. And he can fire everyone from the Chairman down, simply by spending his money somewhere else. (Sam Walton, 1977)
A customer-centric focus is not a new concept in business. Over the years, many companies have talked how ‘the customer the king’ or that ‘the customer is always right’.
However, what is changing before our eyes is the relationship between customers and companies. There is a seismic shift in this relationship with customers expecting to not only be equal partners with those with whom they do business, but also to have their voice matter and drive product and service evolution.
For companies, it is the shift to the Jerry Maguire “Help me, Help you” business model.
Think I’m kidding?
A quick glance through LinkedIn reveals that many companies have already adopted the idea. Companies are serious about helping their customers succeed and stay happy with newly titled positions emerging: VP of Global Customer Care, Director of Customer Happiness, and, my favorite, VP of Customer Happiness. These are real companies with real titles with a real focus on a daily dose of customer delight.
We’ve come a long way from traditionally structured sales, marketing, and support teams, and the tipping point has been recurring revenue and its importance to SaaS-based companies. This renewable revenue stream is the lifeblood of tech-enabled companies and a happy customer is a renewing customer, so organisations are shifting internally to support customer love, loyalty and advocacy.
It also makes enormous financial sense to re-align your priorities toward your customer. Finding out how you can help your customers succeed is a win-win for both of you. Recurring revenue accounts for 30-40% of most companies’ total revenue while making up 50% or more of profit.
And according to Bain and Company, a 10% increase in customer retention results in a 30% increase in the value of the company.
I don’t think Jerry Maguire had any idea how relevant his concept would be to the future of recurring revenue.
Begins in boxes
The key to shifting to a customer-centric focus begins in the boxes…the organisational chart.
Traditionally, customer relationships have been dispersed across various functions within a company including new sales, support, marketing, customer service, and/or professional services. The organisational charts to support these functions have long been separate and housed in separate, distinct boxes.
But, for success in a renewals or recurring revenue-based business, these boxes need to be smashed together and redrawn since coordination between all of these areas is the key lever for success going-forward.
For example, in the old software sales model, the new sales team sold the software and handed off the customer to the customer support group. It was a single hand-off with sales teams going back to hunting for new customers never to contact these ‘old’ customers again.
In today’s customer-centric model, there is no wall over which to toss a customer. Functions are being integrated with the entire customer journey being mapped and supported, and the sales lifecycle is nowmanaged now by a whole new box: the Chief Renewals Officer.
By focusing on your customers this way, you are creating a way to accelerate your growth from the inside out.
A customer-centric focus is the future direction of companies. If you want to keep up, it’s time to redraw your boxes and add a Customer Concierge or a VP of Customer Care and Nurturing to your sales team.
Who is responsible for customer satisfaction in your organisation?
Jay Ackerman is chief renewals officer and EVP of Customer Success at ServiceSource.