Our guest today is Nick Mehta, CEO of Gainsight, the global technology leader in the customer success category. Many CEOs are moving their revenue models to recurring revenue. Why? This type of revenue creates higher enterprise value than transaction-level revenue. As a result CEOs have become strategically focused on revenue retention, customer renewal rates, and customer life time value.
Nick wrote the book on customer success and his company Gainsight, created the category. If generating more recurring revenue is on your strategic priority list, this show is for you. Nick leverages SBI’s How to Make Your Number in 2018 to answer questions to evaluate customer success emerging best practices. Turn to the Sales Strategy section and flip to Phase 15, Customer Success found on pages 411 – 416.
Why this topic? Business models are changing from transaction-based revenue models to subscription-based revenue models. Companies dependent on recurring revenue must pay special attention to customer renewal rates, revenue retention, and customer lifetime value. As a result, reactive customer service approaches, built to lower the cost to serve, are being replaced with proactive customer success approaches, built to increase the revenue per customer.
Watch as Nick demonstrates how to generate more recurring revenue by implementing a customer success program.
When your customer becomes more successful as a result of using your product, they buy more of it. And when your customer is unaware of how you have contributed to their success, they attrite.
In the first segment, Nick describes the types of businesses that should be investing in Customer Success and what value it promises to create. Nick describes the value as:
“It’s fundamentally one thing — It’s predictable and efficient growth. For the customer, your clients, the value is about driving their outcomes and success. But for you, it’s all about getting to a predictable and efficient business model. It’s 5-10x cheaper to keep and grow an existing customer than it is to get a new one. In addition to being more predictable, it’s more efficient. You’ll grow in a more cost effective way.”
The second segment of the show is focused on how Customer Success lowers the cost to serve customers and increase the lifetime value. One of the most fascinating parts of the show is when Nick explains how to fund a customer success department.
Our final segment explains who should lead the Customer Success department, and the profile of the ideal candidate. We discuss who should this person report to and how the leader is measured and compensated.
Are you wondering if you can make your number? Here is a tool that will help you understand if you have a chance at success. Take the Revenue Growth Diagnostic test and rate yourself against SBI’s sales and marketing strategy.