Many companies face this same question today. Their customers don’t spend much, on average, and they tend to come and go. So the scramble to find new customers never ends.
It’s a costly cycle.
Our hunter-gatherer ancestors knew this. That’s why they adapted. Farming promised a better, more reliable yield that was easier to attain.
Farming existing customers offers similar benefits. Upselling and cross selling bring more revenue, longer term, at lower cost.
Is high customer churn threatening your 2016 sales revenue goal?
Today, we’ll discuss high customer churn and why it’s a red flag you can’t ignore. Then we’ll introduce a proven methodology that can help combat it. Upselling and cross selling bring more revenue, longer term, at lower cost.
High Customer Churn – What It Looks Like:
It’s not a pretty picture. But it’s woefully common. According to our latest research, 51% of B2B companies suffer from high customer churn. And the corporate (strategic?) chaos that fuels it.
Here’s how chaos manifests in most organizations. All of these are problems are revenue killers.
The buying process isn’t mapped, so buyers aren’t engaged appropriately. Touchpoints are sending mixed (or wrong) messages.
Rogue Sales Tactics:
The sales team is promising more than it can deliver.
Frequent Cost Overruns:
Campaigns or initiatives that go nowhere. Rampant discounting to close deals. Costly compensation plan. The list of possibilities is endless.
Bad Sales Forecasts:
The pipeline looks promising. In reality, it’s full of bad leads that get stuck or disappear.
High Turnover Among A-Players:
Dissatisfaction sinks morale. Your top talent won’t tolerate dysfunction for long.
What It Signals:
The above issues are symptoms of serious internal problems.
- Corporate strategy isn’t well defined or understood. Product, marketing, and sales strategies are all over the map.
- Functions are poorly managed. A-player talent and/or coaching and development are lacking.
- Functions are at cross purposes. For example, sales and marketing define their terms differently. If your functional teams are undermining each other, no one is performing well. Many failures and fingers pointed, but few lessons learned.
What You Need – The Revenue Growth Maturity Model:
We’ve developed a tool to help companies assess their health. It’s the Revenue Growth Maturity Model. Think of it as a spectrum of corporate functionality and performance. Every company falls somewhere on the model.
We’ve outlined the model on pages 12-13 of Make Your Number in 2016. It’s our latest B2B research report based on more than 60,000 surveys, interviews, and field observations. Along with 14,000+ document reviews, corporate/industry analyses, and field tests. Download the report here for free.
What Is “Revenue Growth Maturity”?
It’s the degree of strategic alignment a company has achieved. We’re referring here to functional alignment and market alignment. Both are critical to unleashing long-term, top-line revenue growth.
How Does the Model Work?
The model compares customer acquisition cost (CAC) and customer lifetime value (CLTV). Companies at the bottom of the scale (Level 1) have high CAC and low CLTV. The opposite is true for Level 5 companies—the most “mature” of them all.
How Do Other Companies Compare?
We’ve broken it down for you on page 14 of Make Your Number in 2016. The results may surprise you.
Click here to download the report for free.
What Does It Take to Adapt? To reach higher levels of revenue growth maturity, strategic alignment is essential. We’ll talk more about that in tomorrow’s post.