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Optimizing Free Trial Strategies: A Blueprint for SaaS Businesses

The significance of free trials in SaaS-based businesses is immeasurable. As a compelling strategy in the toolkit of a product manager, free trials serve a dual purpose: They act as a customer acquisition tool and as a solid building block in establishing long-lasting customer relationships.

Free trials, when used effectively, help users understand the potential benefits of a product or service without any initial financial commitment, thereby reducing entry barriers and making the decision process smoother. From a business perspective, free trials can significantly drive user growth and conversion rates.

Free Trial Benchmarks

For SaaS businesses to effectively acquire customers and generate revenue, free trial benchmarks are crucial. In order to evaluate the success of your own trial initiatives, you must understand the typical conversion rates and performance metrics associated with free trials.
Typically, in the dynamic SaaS industry, free trial conversion rates ranged from 1% to 10% a decade ago, with most businesses falling within the 2%-5% range. As this industry has evolved in recent years, benchmarks have gone up to 20%, 40% and even higher.
Which shows why it’s important to recognize that the landscape of the SaaS industry is constantly evolving, and customer expectations are evolving alongside it which means your company can’t just set and forget free trials and must evolve with it as well
It is crucial to acknowledge that the SaaS industry is in a constant state of evolution, accompanied by evolving customer expectations. Because of this, companies cannot afford to adopt a “set it and forget it” approach to free trials. In order to remain relevant and meet their customers’ needs, they must proactively adapt and evolve

Choosing the Right Free Trial Type

There are primarily three types of free trials, and choosing the right one depends on your product, your goals, and your audience. 

Time-Limited Trials

The first type, time-limited trials, provide full access to all features for a specific duration, usually between 7 to 30 days. This model gives users an immersive experience of the product, with the aim of showcasing its full potential and driving the users towards a purchase decision.

Feature-Limited Trials

Feature-limited trials restrict access to certain advanced or premium features while giving free access to the basic ones. This approach works best when your product has unique features that distinguish it from competitors.

Usage-Limited Trials

Usage-limited trials, on the other hand, offer unlimited time access but limit the usage, for instance, the number of projects that can be created or the amount of storage available. This model can be effective in products where long-term usage is crucial for realizing the product’s value.

Cracking the Code: Free Trial Metrics

Next comes a critical component of a free trial strategy: metrics. Monitoring the right metrics helps businesses understand user behavior, gauge the trial’s effectiveness, and make data-driven decisions to optimize the trial process.

Key Metrics to Monitor

When it comes to tracking performance, there are three free trial key metrics to keep a close eye on:

  • Number of Sign-ups: This metric provides a snapshot of how many users are interested in trying your product. It serves as the starting point of your funnel.
  • Activation Rate: This percentage measures the users who take a meaningful action (like completing a project or achieving a milestone) during the trial period.
  • Conversion Rate: This is arguably the most crucial metric. It measures the percentage of trial users who become paid customers, thereby directly impacting your revenue.

How to Calculate These Metrics

Calculating these metrics is straightforward yet essential as tracking any other key KPIs . The activation rate can be calculated by dividing the number of users who achieved a meaningful action by the total number of users who signed up for the trial.

The conversion rate is calculated by dividing the number of users who converted to paid customers by the total number of users who signed up for the trial. This key metric helps you understand the efficacy of your free trial in converting users to paid customers.

Essential Aspects Often Overlooked

There are often-overlooked aspects in managing a successful free trial strategy:

Smooth User Onboarding

Ensure user onboarding is as smooth as possible. The easier it is for users to get started, the higher the chance they will explore your product in depth.

Guidance for Achieving Outcomes

Provide users with guidance on how to achieve meaningful outcomes with your product. This could be via email, in-app messages, or a dedicated support team.

Monitoring User Engagement

It’s not just about sign-ups and conversions, pay attention to user engagement during the trial period. This can give insights into potential roadblocks or opportunities for improvement.

Best Practices for Optimizing Your Free Trial Strategy

Maximizing the impact of your free trial requires a strategic approach that extends beyond simply monitoring metrics. Below are some tried-and-true best practices to optimize your free trial strategy:

  • Personalize the trial experience

Tailor the free trial experience to match the user’s needs, preferences, or use cases.

  • Communicate value constantly

Regularly highlight the benefits and value your product brings to the user during the trial period.

  • Use a combination of trial types

Depending on the user persona, you may want to offer different types of trials (time, feature, or usage-limited) to cater to different user expectations and requirements.

  • Test and iterate

Regularly test different aspects of your trial strategy (duration, type, communication, etc.) and iterate based on the results.

  • Proactively engage with the users

Don’t wait for the user to reach out. Proactively ask for feedback, provide support, and address any potential issues the users might face.

Wrapping Up

Free trials are a pivotal part of any SaaS business. It’s not just about offering a glimpse of your product, but about fostering a relationship with potential customers. From choosing the right trial type to closely monitoring metrics and fine-tuning the process, a well-executed free trial strategy can drive user growth and revenue while setting the foundation for long-term customer relationships.d

Growth matters - Leore Spira

Growth Matters – Key B2B insights w/ Leore Spira, Head of RevOps @ Buildots

Today’s salespeople juggle an array of tools – from prospecting and CRM to outreach tools and meeting schedulers. Coupled with a comprehensive infrastructure for lead generation, lead-scoring systems, and sales-related data, it’s a challenging landscape to navigate.

As we continue our Growth Matters series, we’re focusing on demystifying this complexity. To guide us through these treacherous waters, we’ve invited a seasoned RevOps specialist, to guide us through these intricate waters.

Please join us in welcoming Leore Spira, Head of Revenue Operations at Buildots. Her extensive experience and expertise will help us delve deeper into these challenges and provide insights into navigating them successfully. Welcome, Leore!

Explore her insights on RevOps fundamentals, data’s role, essential tools, and future trends.

Let’s start with the basics – what is the purpose of RevOps, and what are some key components of a successful RevOps strategy?

RevOps (Revenue Operations) is a strategic approach to aligning sales, marketing, and customer success teams within an organization to optimize revenue generation and customer experience. The purpose of RevOps is to drive growth and increase revenue by streamlining holistic processes, improving collaboration, and leveraging data to make informed decisions.

The key components of a successful RevOps strategy include:

1. Alignment:

RevOps requires a strong alignment between GTM, e.g. sales, marketing, and customer success teams. This includes clear communication and collaboration to ensure that all teams are working towards the same goals.

2. Data-driven approach

RevOps relies heavily on data to make informed decisions. A successful RevOps strategy includes collecting and analyzing data from various sources to gain insights into customer behavior, sales performance, and marketing effectiveness.

3. Process optimization 

RevOps aims to streamline and optimize sales, marketing, and customer success processes. This includes identifying inefficiencies and implementing solutions to improve productivity, efficiency, and effectiveness.

4. Technology integration

RevOps requires the use of technology to support its processes and data-driven approach. A successful RevOps strategy includes integrating and leveraging technology and building the optimized tech stack such as CRM systems, marketing automation, and analytics tools.

5. Continuous improvement

RevOps is a continuous process of improvement. A successful RevOps strategy involves regularly monitoring performance metrics and adjusting processes and strategies to achieve better results over time.

How can RevOps help B2B companies better understand and serve their customers throughout the entire customer lifecycle?

RevOps can help B2B companies better understand and help their customers throughout their lifecycle by providing a holistic view of the customer journey.

Here are some ways RevOps can help:

1. Collect and analyze customer data

RevOps collect and analyze data from various sources, such as CRM systems, GTM tech stack, marketing automation tools, and customer feedback, to gain insights into customer behavior, relationship, and preferences. This data can be used to identify trends, anomalies, and patterns, as well as to personalize the customer experience journey and process.

2. Align sales, marketing, and customer success teams

RevOps align these teams to ensure that they are all working towards the same goals or KPIs and that there is a consistent approach to customer engagement throughout the customer lifecycle. This can help avoid gaps and inconsistencies in the customer experience.

3. Optimize processes

RevOps can optimize processes such as lead generation, lead nurturing, sales cycle, churn rate, or customer onboarding to ensure that they are efficient and effective. This can help minimize the time it takes to convert a prospect into a customer and reduce churn rates.

4. Provide insights and recommendations

RevOps provide insights and recommendations based on data analysis and performance metrics to help teams make informed decisions about better helping their customers. This can help teams identify areas for improvement and prioritize initiatives that will have the most impact on customer satisfaction and retention.

By leveraging RevOps strategies and tools, B2B companies can better understand and support their customers throughout their journey. This can lead to increased customer satisfaction, loyalty, a great relationship, and revenue growth.

What role does data play in driving RevOps success, and how do you ensure you gather and maintain quality data?  

Data plays a critical role in driving RevOps success, as it provides insights into the customer journey performance and effectiveness. To ensure that data is of high quality, B2B companies must have a robust data management strategy and infrastructure in place. 

Here are some key steps to gathering and maintaining quality data for RevOps success:

  1. Define your data management strategy: Establish a clear strategy for data management that outlines the processes and tools needed to collect, store, and analyze data. This strategy should also define data ownership and access rights.
  2. Standardize data collection: Define and standardize data collection processes to ensure that data is consistent and accurate across all systems and teams. This includes defining data fields, naming conventions, and data entry protocols.
  3. Implement data governance: Implement data governance policies and procedures to ensure data accuracy, completeness, and security. This includes establishing data quality standards, data privacy policies, and data access controls.
  4. Use technology to automate data processes: Utilize technology such as CRM or GTM systems, marketing automation tools, and analytics platforms to automate data processes and improve data accuracy and completeness.
  5. Continuously monitor and improve data quality: Regularly monitor data quality and implement processes for data cleansing and enrichment to ensure that data is accurate and up-to-date.

By following these steps, companies can ensure that they gather and maintain high-quality data hygiene in the systems that can be used to drive RevOps success. This includes providing insights to GTM leadership and management, which can help the company to optimize its revenue generation and customer experience and support its decision-making process with data.

What are some essential tools and technologies that B2B companies should consider when implementing a RevOps strategy?

B2B companies should consider a range of tools and technologies when implementing a RevOps strategy. 

Here are some essential tools and technologies to consider:

  1. CRM systems: A CRM (Customer Relationship Management) system is a critical tool for managing customer journey data and interactions across the customer lifecycle. It enables B2B companies to track customer interactions, manage accounts, contacts, leads, and opportunities, and analyze customer data to make data-driven decisions.
  2. Marketing automation tools: enable companies to automate repetitive marketing tasks, such as lead nurturing, email marketing, and social media management. They can help improve the efficiency and effectiveness of marketing campaigns and ensure that leads are properly nurtured throughout the funnel.
  3. Sales enablement tools: help sales teams to be more efficient and effective by providing them with the right content and information at the right time. They can include tools such as content management systems, sales training and coaching tools, and sales performance analytics platforms.
  4. Analytics tools: enable companies to collect and analyze data from various sources, such as website analytics, customer feedback, customer relationship, health and engagement score, and sales performance metrics. They can provide valuable insights to support scaling the processes and revenue. 
  5. Collaboration tools: such as project management software, communication platforms, and file-sharing tools, can help improve collaboration and communication across teams, which is essential for successful RevOps implementation.

 

Overall, companies should consider a range of tools and technologies to support their RevOps strategy, depending on their specific needs and goals. These tools and technologies can help improve efficiency, productivity, effectiveness, and collaboration across sales, marketing, and customer success teams, leading to better revenue generation and customer experience.

At what stage should companies start investing in RevOps?

RevOps can be beneficial for companies at any stage of their growth, whether they are startups, SMBs, or large enterprises. However, the exact timing of when to invest in RevOps may vary depending on the company’s specific circumstances and goals.

Here are some common scenarios:

  1. Rapid growth: If a company is experiencing rapid growth, it may need to optimize its revenue generation and customer experience processes to keep up with demand. Implementing a RevOps strategy early can help streamline processes, improve collaboration, and leverage data to make informed decisions.
  2. Sales and marketing misalignment: If sales and marketing teams are misaligned, a RevOps strategy can help align them and ensure that they are working towards the same goals. This can help avoid gaps and inconsistencies in the customer journey and improve overall revenue generation and funnel.
  3. Churn reduction: If a company is experiencing high churn rates, it may need to improve its customer experience processes. RevOps can help optimize customer onboarding, support, and success processes and leverage data to identify areas for improvement.
  4. Technology adoption: If a company is adopting new technologies such as CRM systems, marketing automation tools, or analytics platforms, a RevOps strategy can help ensure that these tools are integrated properly and used effectively to optimize revenue generation and customer experience.

You’ve been doing Rev/SalesOps for years! How has the role of this department evolved over the years, and what do you see as the future trends in this field?

Over the years, the role of Rev/SalesOps has evolved from being primarily focused on sales process optimization to a more holistic approach to revenue generation and customer experience (e.g. full funnel and customer journey). 

Here are some key trends that have shaped the evolution of Rev/SalesOps:

  1. Data-driven decision-making: Rev/SalesOps has become increasingly data-driven, with a focus on collecting and analyzing data to gain insights into customer behavior and relationship throughout the funnel, sales performance, and marketing effectiveness. This has enabled Rev/SalesOps teams to make informed decisions and optimize revenue processes.
  2. Collaboration and alignment: Rev/SalesOps has become more focused on collaboration and alignment across GTM teams, i.e., sales, marketing, and customer success teams. This has helped to avoid gaps and inconsistencies in the customer journey and improve the overall revenue generation funnel.
  3. Technology adoption: Rev/SalesOps has become more reliant on technology to support its processes and data-driven approach. This has led to the adoption of different tools to increase efficiency and data enrichment.
  4. Customer-centric approach: Rev/SalesOps has become more focused on a customer-centric approach, with a greater emphasis on optimizing the customer experience throughout the customer lifecycle. This has led to a greater focus on customer success and retention (land and expand methodology) in addition to revenue growth.
 

In terms of future trends, here are some areas that are likely to shape the evolution of Rev/SalesOps:

  1. Artificial Intelligence and Machine Learning: The use of AI and machine learning is likely to become more prevalent in Rev/SalesOps, particularly in areas such as sales forecasting/prediction, lead/account scoring, and customer segmentation and health.
  2. Sales Enablement: Rev/SalesOps is likely to become more focused on sales enablement, providing sales teams with the tools and information they need to be more effective and efficient in their roles.
  3. Sales Process Automation: Rev/SalesOps is likely to continue to automate and streamline sales processes, making them more efficient and effective.
  4. Customer Experience Optimization: Rev/SalesOps is likely to become even more focused on optimizing the customer journey throughout the customer lifecycle, with a greater emphasis on customer success, growth playbooks, health, relationship, and retention.

What are some key performance indicators (KPIs) that companies should track to measure the success of their RevOps initiatives?

Tracking key performance indicators (KPIs) is essential to measure the success of RevOps initiatives. Here are some KPIs that companies should consider tracking:

  1. Revenue growth: Revenue growth is the ultimate goal of RevOps, and tracking this metric can help companies measure the productivity and efficiency of their RevOps strategy and GTM teams.
  2. Sales cycle length: The length of the sales cycle is a key indicator of the efficiency of the sales process. Tracking this metric can help companies identify bottlenecks and areas for improvement.
  3. Customer acquisition cost (CAC): CAC is the cost of acquiring a new customer and is an important metric for tracking the efficiency of marketing and sales efforts.
  4. Customer lifetime value (CLTV): CLTV is the total value of a customer over the course of their relationship with the company. Tracking this metric can help companies identify opportunities for upselling and cross-selling.
  5. Win rate: Win rate is the percentage of deals won versus the total number of deals pursued. Tracking this metric can help companies identify areas for improvement in the sales process and adjust their strategy accordingly.
  6. Customer satisfaction (CSAT) and Net Promoter Score (NPS): CSAT and NPS are metrics used to measure customer satisfaction and loyalty. Tracking these metrics can help companies identify areas for improvement in the customer experience, the relationship with the product, and address issues before they become major problems.
  7. Marketing/Sales attribution: Marketing/Sales attribution is the process of assigning credit for a sale or conversion to a specific marketing/Sales touchpoint or campaign. Tracking this metric can help companies identify which marketing efforts are most effective in driving revenue.

Can’t let you go before asking about AI. How do you see it impacting the RevOps world, and what possible impacts do you think it will have?

AI has the potential to significantly impact the RevOps world in a variety of ways. Here are some possible impacts on RevOps:

  1. Sales forecasting and prediction: AI can help improve the accuracy of sales forecasting and pipeline prediction by analyzing historical data and identifying patterns and trends.
  2. Lead or account scoring: AI can help automate lead scoring by analyzing customer data and behavior or type of relationship to determine which customers or prospects are most likely to convert or grow.
  3. Sales process automation: AI can automate repetitive tasks and processes, such as data entry and scheduling, freeing up sales reps to focus on more high-value tasks.
  4. Churn prediction: by analyzing customer behavior and engagement data, AI can help predict which customers are at risk of churning and enable RevOps teams to take proactive measures to retain those customers. AI can identify patterns in customer data that may indicate dissatisfaction, such as reduced engagement, decreased activity, or negative feedback. Based on these insights, RevOps teams can take targeted actions to improve the customer experience and address issues before they lead to churn. This can also help improve customer retention rates and ultimately drive revenue growth.
  5. Customer segmentation: AI can help segment customers based on various criteria, such as purchase history, behavior, and preferences, to personalize the customer journey and messaging.
  6. Chatbots: AI-powered chatbots can help automate customer support and provide instant answers to common customer queries or desires.
  7. Sales coaching: AI can provide insights and recommendations to sales reps, such as personalized coaching and training, to help them improve their performance and close more deals.
  8. Marketing personalization: AI can analyze customer data to provide personalized marketing messages and offers based on customer preferences and behavior.

Overall, AI has the potential to revolutionize the RevOps world by improving the accuracy of forecasting, automating tasks and processes, and providing personalized insights and recommendations. However, it is important for companies to ensure that they have the necessary infrastructure and data management strategies in place to effectively leverage AI for RevOps.

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Mastering Sales Metrics: Decoding PQLs and PQAs for a Winning Sales Strategy

The sales environment today is constantly changing, so it’s important to stay informed and adaptable. In order to ensure your sales team succeeds, understanding key concepts such as Product Qualified Leads (PQLs) and Product Qualified Accounts (PQAs) can be critical. Rather than being methodologies, PQLs and PQAs are essential elements of the sales process. This post explores PQLs and PQAs, their relevance in different scenarios, and their relationship to your sales team’s work. Knowing the differences between them and knowing when to use them will help your sales team succeed.

PQLs and PQAs vs MQLs and SQLs

Understanding MQLs and SQLs

To fully grasp the value of PQLs and PQAs, it’s important to compare them with other widely-used concepts in the sales world: Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). MQLs are prospects identified by the marketing team as having the potential to become customers based on their interactions with marketing materials. SQLs, on the other hand, are leads that the sales team deems ready for a direct sales approach based on their level of interest and intent.

PQLs and PQAs: A Different Perspective

While MQLs and SQLs focus primarily on the level of engagement with marketing materials and sales readiness, PQLs and PQAs take a more product-centric approach. PQLs are prospects who have actively engaged with the product or service itself, while PQAs are organizations with multiple PQLs, signaling a high level of interest and potential for conversion.

Defining PQLs and PQAs

What are Product Qualified Leads (PQLs)?

Product Qualified Leads (PQLs) are potential customers who have demonstrated a clear interest in your product or service by engaging with it in a meaningful way. Examples of PQL engagement include signing up for a free trial, using a freemium version of your product, or attending a product demonstration. PQLs have shown a higher likelihood of conversion compared to traditional leads because they have firsthand experience with your offering.

What are Product Qualified Accounts (PQAs)?

Product Qualified Accounts (PQAs), on the other hand, are entire organizations or business units that display a strong potential for conversion. PQAs often consist of multiple PQLs within the same organization, indicating a high level of interest and engagement with your product or service. By targeting PQAs, you can focus on nurturing relationships with key decision-makers and stakeholders, increasing the chances of closing a deal.

Identifying the Relevance of PQLs and PQAs

When to Focus on PQLs

PQLs are particularly relevant when your sales team is dealing with individual users or smaller organizations. In these cases, it is essential to identify and engage with prospects who have shown genuine interest in your product. By focusing on PQLs, your sales team can prioritize high-quality leads and allocate resources more effectively.

When to Focus on PQAs

PQAs become more relevant when targeting larger organizations or enterprises. In these scenarios, your sales team needs to consider multiple stakeholders and decision-makers within the same account. Focusing on PQAs allows you to engage with an entire organization, ensuring you address the needs and concerns of all relevant parties, which can lead to more significant deals and long-term business relationships.

Integrating PQLs and PQAs into Your Sales Team’s Work

Developing a PQL and PQA Mindset

To successfully integrate PQLs and PQAs into your sales team’s workflow, it’s essential to adopt the right mindset. This involves understanding the differences between PQLs and PQAs, recognizing their value, and knowing when to prioritize each one.

Aligning Sales and Marketing Efforts

Both PQLs and PQAs require close collaboration between sales and marketing teams. Marketing efforts should focus on driving product engagement and identifying PQLs, while the sales team should concentrate on nurturing these leads and converting them into customers. In the case of PQAs, both teams need to work together to engage with multiple stakeholders and decision-makers within the organization.

Leveraging Technology and Data

To effectively identify and manage PQLs and PQAs, your sales team should use technology and data to track engagement, monitor progress, and make informed decisions. Customer Relationship Management (CRM) systems, marketing automation tools, and data analytics can help you collect and analyze information about your leads and accounts, allowing your team to prioritize their efforts and optimize their strategies.

Utilizing Product-Led Revenue Platforms for PQL and PQA Management

Product-led revenue platforms can play a crucial role in helping your sales team adopt the PQL and PQA mindset, align with marketing efforts, and make data-driven decisions. These platforms consolidate essential information, enable you to track product engagement, and identify PQLs and PQAs. Additionally, they provide customized scoring based on product usage and other factors, allowing your team to prioritize leads and accounts more effectively.

By integrating a product-led revenue platform into your sales and marketing processes, you can ensure that your team has a centralized system to manage PQLs and PQAs effectively. These platforms not only streamline workflows through playbooks and automation but also promote better communication and collaboration between sales and marketing teams, leading to a more efficient and successful sales process.

Conclusion

Understanding the distinctions between PQLs, PQAs, MQLs, and SQLs is essential for sales success. By adopting a product-centric mindset and knowing when to focus on PQLs or PQAs, your sales team can better prioritize their efforts, allocate resources effectively, and ultimately drive more conversions. Utilizing product-led revenue platforms can significantly enhance your team’s ability to identify and manage PQLs and PQAs by fostering alignment, encouraging data-driven decision-making, and promoting seamless collaboration between sales and marketing teams. Additionally, these platforms offer customized scoring, playbooks, and automation, streamlining your workflows and further optimizing your sales process. Embracing these concepts and strategies will ensure long-term success and growth for your organization.

The Power of Analytics: Transforming B2B Sales and Revenue Generation Strategies

From Data to Dollars: Leveraging Analytics to Maximize B2B Sales and Revenue Growth

Caroly Fiona once said, “The goal is to turn data into information, and information into insight.” To complement this adage, these insights can be translated into your revenue. As per a recent publication by McKinsey, the implementation of data analytics is poised to offer numerous benefits. This innovative approach involves utilizing computer systems and processes to perform analytical tasks with minimal human intervention, improving quality, safety, speed, and output while reducing errors. 

Data analytics is paramount for B2B sales organizations as it furnishes valuable insights into the efficacy of various sales channels. The process of data analytics involves leveraging unstructured data to extract valuable insights that can inform business decisions and drive strategic outcomes. Algorithms are used for analysis and tailored to meet specific objectives, allowing sales teams to leverage historical performance data to pinpoint lucrative strategies and effectively target high-value customers.

Sigma Computing reports that although many businesses recognize the value of big data, over 63% of employees are concerned that they cannot get insights from their solutions in a timely manner. For many businesses, the greatest challenge is likely to obtain data insights before they become obsolete. In this vein, Forrester emphasizes that up to 73% of all data is never deployed for analytical purposes.

Exploring the Core Data Types

B2B enterprises are gaining access to an expanding data pool. Certain data sets can prove to be highly valuable in providing crucial insights into your enterprise. Alternative forms of data may not hold the same level of significance. In the realm of B2B enterprises, key categories of data contain significant value for generating data-driven insights: customer data and sales data.

  • Customer DataFundamental customer data includes details such as the organization’s name, physical address, geographical location, and scale, among others. Although rudimentary, this information can still be highly valuable, particularly when integrated with sales data. Customer engagement and behavior can provide valuable insights into how your customers engage with your brand and navigate your website or online store.
  • Sales DataSales data refers to the numerical information that tracks the performance of a company’s sales activities. This data is typically used to analyze trends, identify growth opportunities, and make informed business decisions. Sales data provides valuable insights into customer behavior, including purchasing patterns and timelines. In the context of business-to-business (B2B) sales, the sales data can provide valuable insights into the performance of your sales agents and other sales personnel.

Effective Market Segmentation

Without a doubt, the strategic development of market segmentation is a crucial determinant of the success of novel products or services, as it enables the effective targeting of products to diverse market segments. Data analytics-driven customer segmentation can aid businesses in crafting highly personalized and efficient marketing campaigns that directly cater to their customers’ unique needs and concerns. By leveraging real-world data insights, your enterprise can enhance its revenue generation capabilities across diverse segments by delivering innovative products and services.

Leveraging big data analytics to gain insights into consumer behaviour directly impacts an organization’s revenue. Organizations that leverage such data possess a competitive edge over their rivals as they can furnish appropriate offerings that cater to their clientele’s specific needs and preferences.

As per the study conducted by McKinsey Global Institute, organizations that rely on data-driven approaches are more likely to obtain customer acquisition, retention, and profitability. Specifically, such organizations are 23 times more likely to acquire customers, six times more likely to retain customers, and 19 times more likely to achieve profitability.

At a fundamental level, this enables employees to redirect their focus towards higher priority responsibilities. Implementing automation technology enables enterprises to effectively manage large volumes of data, encompassing critical aspects such as data acquisition, refinement, duplication, and repository upkeep.

Predictive Analytics & Forecasting 

Resource allocation, trend forecasting, and action identification are integral components of effective management. The processes of forecasting and budgeting are integral components of routine business operations that demand a substantial amount of time and effort. The process of forecasting entails the estimation of future trends by analyzing past data. Predictive analytics represents a distinct approach to data analysis. 

Furthermore, integrating various inputs in predictive analysis and forecasting enables the prediction of future trends with greater detail and nuance than conventional historical forecasting techniques. Predictive analysis offers valuable insights that would allow managers to enhance their agility and adaptability to dynamic market conditions, thereby reducing inefficiencies and maximizing revenue optimization.

Descriptive & Diagnostic Analytics

Any enterprise must comprehensively assess its operational efficacy to discern its strengths and areas of improvement for future growth. Descriptive analytics is a fundamental data analysis technique involving the systematic collation, organization, and presentation of various historical data types. By leveraging advanced techniques such as data aggregation and mining, descriptive analytics can effectively uncover patterns and trends within historical data. The resultant data sets can be effectively showcased through Business Intelligence (BI) incomprehensible visual aids such as graphs, diagrams, and charts.

After the initial evaluation, the diagnostic analysis represents the subsequent rational progression in this course of action. Descriptive analysis addresses the question of “what occurred?” while diagnostic analysis explains “why did this event occur?”. Various methodologies, including drill-down, data discovery, data mining, and correlations, are employed to extract the interrelationships among diverse datasets. The process of diagnostic analysis not only involves the identification of trends, but also strives to unveil the interrelationships among various parameters.

Bottom Line

B2B businesses can acquire a deeper understanding of their consumers and the sales funnel as a whole by evaluating data from channels as diverse as customer relationship management (CRM), web analytics, and marketing automation. With this knowledge, B2B organizations can better tailor their sales strategy and customer service to boost conversion rates and revenue. Businesses may better deploy their time, money, and other resources by identifying the most successful marketing efforts.

B2B enterprises may monitor their sales activity and see patterns in their income streams using analytics. This may help them generate data-driven choices and change tactics, including expanding into new areas or adjusting prices. Maintaining momentum and making necessary adjustments with the advent of data analytics may empower B2B teams to accomplish their revenue goals.

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RevOps: The Game-Changer for B2B Customer Acquisition and Retention

Considering escalating customer acquisition expenses and dwindling conversion rates, enterprises must devise effective strategies to acquire, retain and expand their customer portfolio. Well, the average cost merchants incur for acquiring a new customer has significantly increased over the last decade. SimplicityDX concluded that in 2013, merchants experienced a loss of $9 per new customer, whereas presently, the loss has surged to $29, indicating a substantial 222% rise. 

For those who want to enhance their customer acquisition process, RevOps arises as the most consistent and innovative solution.

Matching Customer Expectations with RevOps

The RevOps shift has garnered significant attention as a crucial strategy for fostering interdepartmental collaboration and delivering a seamless customer journey.  As per the findings of a research conducted by Salesforce, customers anticipate uniformity in their interactions with a company across various departments. Nevertheless, it frequently appears that individuals are confronted with disparate divisions instead of cohesive entities. 

Moving forward, the RevOps department is uniquely positioned to bridge the gap and deliver a cohesive customer journey that not only meets but surpasses customer demands. Gartner Inc. anticipates that a RevOps framework will be adopted by 75% of the most rapidly expanding enterprises worldwide by 2025. Enterprises comprehend that a proficiently executed RevOps approach can propel revenue expansion and augment customer contentment. 

In the same vein, recent research conducted by ActiveCampaign regarding the influence of customer experience automation has revealed that automation technology has the potential to enhance customer acquisition and retention rates substantially. The research findings indicate that enterprises that have incorporated automation technology into their operations have witnessed a significant increase of up to 110% in their lead generation and a remarkable 94% surge in their conversion rate.

Leveraging Key Metrics for Customer Acquisition

RevOps teams are uniquely positioned to craft a frictionless customer journey by identifying and addressing the gaps in your sales and marketing processes. By using data-driven insights to evaluate and optimize the customer journey, RevOps teams can help your business achieve better customer acquisition and retention rates, drive revenue growth, and stay competitive in today’s marketplace.

To streamline processes, RevOps teams need to understand how efficient and accurate the existing processes are. Key metrics like Customer Lifetime Value (CLV) and  Customer Acquisition Cost (CAC) can be used to evaluate how much revenue your operations generate across departments throughout the customer journey. RevOps teams can identify and remove bottlenecks by analyzing these metrics to maximize value and profits.

  • Customer Lifetime Value (CLV) measures how much a customer is worth to your business from the moment they first start using your product or service until they stop. CLV isn’t based solely on the customer’s first purchase but on how effective upsells and renewals are. A low CLV limits how much you should spend to acquire new customers and should be a key consideration in your marketing and sales strategies.
  • Customer Acquisition Cost (CAC) indicates how much you must invest in marketing and sales to acquire a new customer. A good CAC for your brand depends on the CLV and customer churn. A high CAC should alert your RevOps team that your branding is inconsistent, your ad placements are off, or you’re targeting the wrong clients. 

How Deploying RevOps Diminishes Customer Acquisition Costs

Companies who want to deploy an effective RevOps strategy should incorporate a customer acquisition cost goal into their comprehensive strategic plan to elevate their operations. However, the objective in question changes, contingent upon variables such as the industry, the value of the customer’s lifetime, and the expansion aspirations of the company. If the expenses associated with customer acquisition persistently surpass the desired threshold, it may be prudent to undertake a comprehensive reassessment of the RevOps approach.

One potential strategy is to comprehensively evaluate and refine the marketing and sales methodologies currently employed. When paid advertising fails to yield the intended outcomes, it may be judicious to investigate alternative marketing channels. RevOps teams can leverage data analytics to discern the most efficient channels and allocate resources accordingly.

In the event that the objective for customer acquisition cost proves to be persistently unachievable, it may become imperative to revise the target to a more pragmatic figure. RevOps teams must periodically assess their customer acquisition cost objective and make necessary modifications to ensure its congruence with the organization’s overarching objectives and available resources.

Effective team communication is critical in attaining the desired customer acquisition cost. RevOps teams must collaborate with sales, marketing, and customer success teams to foster a cohesive approach towards achieving organizational objectives. Effective inter-team communication and feedback mechanisms can facilitate the identification of potential areas for enhancement and streamline strategies to minimize customer acquisition expenses.

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Growth Matters – Key B2B insights w/ Gal Aga, Co-Founder & CEO @ Aligned

In an age of constant innovation and fierce competitiveness, companies invest major resources to gain even the slightest advantage.

That’s why we started the Growth Matters series of interviews, where experienced industry leaders share key insights everyone should know in the domains of revenue, customer success, sales, and product.

In this installment, we’re joined by Gal Aga. Gal started selling way back in the early days of the ecosystem and has seen and done it all in various leadership sales and revenue roles. Today he’s the Co-Founder and CEO of Aligned

Check out his thoughts on sales technology, revenue trends, and what’s missing in today’s revenue operations. 

 

What are the most significant challenges B2B sales teams are facing today, and how can companies effectively address these challenges to improve their revenue performance?

Unfortunately, this is probably very relatable to all teams – we’re all expected to “do more with less” in 2023, and it’s not an easy task. We experience:

  1. Less pipeline to achieve our targets.
  2. Less access to stakeholders since now the CFO, CEO, and more people are involved.
  3. Less budgets we can tap into.
  4. Less influence, as there’s more scrutiny on decisions and a more compelling case is required.
  5. Less control over deals since there are sudden budget cuts, reprioritization, and more buying complexity to navigate.

The 2021 approach was to bring more people, pay more for leads, and buy lots of experimental software to give things a boost. The way I see it right now, the focus should be on what drives efficiency and/or effectiveness.

Efficiency: Less time spent on writing, taking notes, building lists, etc. Whatever gives you back the time you can spend on selling. Especially now, with the AI race, companies should focus on this.

Effectiveness: Simply giving people time back isn’t worth much if that time doesn’t move the needle. Some people are great at getting a lot done, but what good does efficiency do if we’re not good at delivering results? My take is to focus more on effectiveness.

  1. Time to invest more in training and coaching. Spend quality time turning potential into reality. Not only will you boost effectiveness, but you’ll also help your employees grow their careers. That’s a great reason to wake up in the morning.
  2. Double down on optimizing your sales playbook. Look for friction, usage data, and find creative ways to generate more pipeline and close more deals. A few great trends we’re seeing:
    1. Social selling – lots of sellers are getting much better results compared to traditional outbound methods.
    2. Building a strong outbound Product-Led-Sales playbook – many free users just won’t buy unless you reach out to them proactively. They’re experiencing friction and not saying anything about it. They get value but don’t know how to sell your solution to their boss. Some of them just don’t think about getting help for a free tool. Identifying the right signals and making the right moves when reaching out can generate a more highly converting pipeline with a higher probability of closing.
  3. Leveraging tools and methodologies that focus on making it easier for your buyer to buy is a golden opportunity. So many leaders focus on management tools, analytics, and lead generation. What about the selling and buying journey? Well, nothing has changed for decades. We’re throwing dozens of attachments at buyers that get lost in email threads and have minimal tracking. We’re also sending hundreds of emails back and forth between 10+ stakeholders, making it hard to collaborate. Lastly, many of us use ineffective spreadsheets to build mutual action plans with buyers and gain more control over deals. There are so many great solutions out there that make buying easier, help uncover buying intent and needs, help better control next steps and timelines, help better communicate and collaborate, and help better educate and influence decisions. A few examples that do this are Digital Sales Rooms like Aligned, Demo Experience Platforms like Demostack, and Video Platforms like Tolstoy.

Can you discuss the importance of aligning sales, marketing, and customer success teams in a B2B organization? And what are good ways of accomplishing it? 

Aligning sales, marketing, and customer success teams is crucial for success. It can significantly derail performance when these teams don’t work well together. You get toxic environments and miss the upside of what strong alignment creates. A few things that I’ve seen work well include:

  1. Establish shared goals: Set shared KPIs and objectives. For example, a marketing team that looks at ARR, similar to a sales team, versus just MQLs, is much more aligned and likely to work better together. Or, have both CSMs and AEs be measured and compensated for expansions and create a clear definition of responsibilities during the expansion process. This will ensure that all teams are working towards the same end game.
  2. Communicate regularly: Schedule cross-functional meetings to share updates, discuss challenges, and celebrate wins. Bring all these teams together. This encourages open communication, fosters empathy, and promotes a sense of ownership in each other’s success.
  3. Leverage technology: Use tools and platforms that streamline collaboration and information sharing, such as CRMs, project management tools, and shared workspaces where all these teams can work together more effectively.

We love discussing KPIs here. What KPIs would you recommend CROs focus on when it comes to customer-related revenue? 

When it comes to customer-related revenue, CROs should focus on the following KPIs:

  1. Net Retention Rate (NRR): The percentage of recurring revenue retained from existing customers, accounting for expansions, contractions, and churn. This KPI provides insight into the overall health of your customer base. It is also one of the most important efficiency metrics that investors look at, so it will have a major impact on your company’s valuation.
  2. Customer Acquisition Cost (CAC) Payback: The amount of time it takes to return the total cost of acquiring a new customer. Keep a close eye on this metric to ensure your sales and marketing efforts are cost-effective. This is also a very important efficiency metric.
  3. Average Contract Value (ACV): The average annual revenue generated from each customer contract. This KPI helps identify trends in deal size and revenue potential. Growing ACV can be a game-changer in times when getting new pipeline is a challenge, as you simply need fewer opportunities to achieve the same ARR targets.
  4. Sales Cycle Length: The time it takes to close a deal from initial contact to the signed contract. This KPI is critical for identifying bottlenecks and inefficiencies in your sales process. Reducing the sales cycle length not only means that you get to close more deals in a given period (assuming you bring in more pipeline) but also reduces the risk of losing deals since, as the old saying goes, “time kills deals.”

Do you believe a product-led growth (PLG) model can work without human touch? And if not, at what stage of the sales process would you introduce it?

While a PLG model can work without human touch in certain scenarios, there are many situations where involving a human touch is beneficial.

Moreso, speaking with many VCs and other startups, we’re hearing that there’s a growing trend to involve sales teams in PLG even more in 2023. More and more companies are starting out with hybrid PLG/PLS go-to-market motions. I believe it’s because of the importance of driving ARR growth and because more and more companies adopt PLG, even if their product is not a classic fit for this model. In those cases, a hybrid model makes sense.

Here are a few situations where it’s important to involve sales in a PLG model:

  1. For deals above a certain ACV, typically, they go beyond the comfort level of completing a purchase fully self-served. For most, the threshold is around $5-7K ARR.
  2. For deals with high potential. You wouldn’t want to let a small team at a high-potential account like Apple buy alone. Proactively reaching out to ensure they have the necessary resources and support, even if it’s a small deal, pays off in the long run.
  3. For complex use cases or industries, the human touch can help navigate specific customer requirements and offer tailored solutions, leading to higher chances of conversion.

We’re living in a data-driven world. What can companies do to leverage that data for maximum growth?

To leverage data for maximum growth, companies should:

  1. Invest in data infrastructure: Implement tools and systems that collect, store, and analyze data efficiently.
  2. Encourage data literacy: Train employees to understand and interpret data, fostering a data-driven decision-making culture. At Aligned, we are in a constant mode of implementing more events, reports, and dashboards across all teams. Everyone is looking at data on a daily basis and is focused on getting better at it. It’s part of our DNA.
  3. Conduct regular data audits: Routinely assess the quality and accuracy of your data to ensure you’re making informed decisions.
  4. Use predictive analytics: Employ advanced analytics tools to forecast future trends and identify opportunities for growth.

At what stage should companies introduce operation roles as part of their sales org?

When they can afford it. I truly believe that there is no such thing as the right stage. An ops person adds value. Period. It’s probably not something most can afford at the Seed stage, but it definitely is when starting to hire a sales team, leaders, SDRs, etc. It’s a must. 

Revenue operations can streamline processes, improve efficiency, and provide data-driven insights to drive growth. These save hours for your management team, increase efficiency for your team, and prevent revenue leakage.

As a leader, how do you promote a data-driven culture within your organization?

As mentioned, we make it more than a project. It’s part of our DNA, with one of our values being encouraging learning. Here are a few things that what we do at Aligned:

  1. Lead by example: We use data to inform our own decision-making and encourage teams to do the same.
  2. Provide training and resources: Offer workshops, seminars, and access to tools that foster data understanding.
  3. Encourage curiosity and questioning: Create an environment where team members feel comfortable challenging assumptions and seeking data-driven answers.
  4. Celebrate data-driven wins: Highlight successes achieved through data-driven decisions to reinforce the value of a data-driven approach. For example, we celebrate product improvements that were driven by data or Product Led Sales wins that were driven by our user reports.

Everyone’s talking about the impact of AI on pretty much every area of the business world. Where do you see its potential impact on sales operations? 

It’s hard to imagine, really. The pace of change and progress is simply mindblowing. I believe that we’ll continue seeing new use cases emerge that we haven’t thought of and new barriers broken. At the moment, I believe AI has the potential to revolutionize sales operations in the following ways:

  1. Automating repetitive tasks: AI can automate tasks such as data entry, lead enrichment, account research, answering emails, drafting proposals, and follow-ups, freeing up sales reps’ time to focus on more strategic activities.
  2. Personalization and targeting: AI can analyze customer data to provide personalized content, offers, and messaging, enhancing the buyer’s journey and increasing the likelihood of conversion.
  3. Lead scoring and prioritization: AI can analyze historical data and identify patterns to predict which leads are more likely to convert. This would allow sales teams to focus their efforts on high-potential leads, improving efficiency and effectiveness.
  4. Sales forecasting: AI-driven predictive analytics can help sales leaders make more accurate revenue forecasts by analyzing historical data, market trends, and customer behavior.
  5. Sales coaching and training: AI-powered tools can identify areas of improvement for individual sales reps and provide personalized coaching and training resources to help them develop their skills.

By embracing AI and its potential impact on sales operations, companies can streamline processes, enhance efficiency, and ultimately drive more revenue.

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Embracing a Data-Driven Approach to B2B Sales: Key Metrics and Insights

In the ever-evolving world of B2B SaaS sales, data-driven decision-making has become essential for organizations seeking to remain competitive and drive revenue growth. Embracing a data-driven approach is particularly important for competitive markets, where any advantage can give you an edge. 

Let’s explore the importance of embracing a data-driven approach to B2B sales, the key metrics you should track, and how these insights can revolutionize your revenue operations (RevOps) strategy.

The Power of Data-Driven Decision-Making in B2B Sales

Data-driven decision-making enables RevOps professionals, sales and growth leaders, and CROs to make informed choices that directly impact revenue and sales performance. By leveraging data and analytics, businesses can identify patterns and trends, optimize sales processes, and ultimately drive growth. Here are some benefits of adopting a data-driven approach in B2B sales:

  1. Improved sales forecasting accuracy: Accurate sales forecasts help organizations allocate resources effectively, manage expectations, and drive revenue growth. By using historical data and analyzing trends, businesses can develop more accurate sales forecasts.
  2. Enhanced lead scoring and prioritization: A data-driven approach helps sales teams identify high-quality leads and prioritize them based on factors such as engagement, industry, and company size, allowing teams to focus their efforts on the most promising opportunities.
  3. Sales process optimization: Analyzing sales data can reveal bottlenecks, inefficiencies, and areas for improvement in the sales process. By addressing these issues, organizations can streamline their sales process, reducing the sales cycle length and increasing close rates.

Key Metrics to Track in B2B Sales

To effectively embrace a data-driven approach, RevOps, revenue, and sales professionals need to track a set of key metrics that provide insights into sales performance. Some of these critical metrics include:

  1. Lead Conversion Rate: The percentage of leads that convert into customers. A high conversion rate indicates an effective sales process and strong alignment between marketing and sales efforts.
  2. Average Deal Size: The average revenue generated from a closed deal. Tracking average deal size helps organizations identify trends, monitor the effectiveness of their pricing strategy, and make adjustments as necessary.
  3. Sales Cycle Length: The time it takes for a lead to progress from initial contact to closed sale. A shorter sales cycle length often indicates a more efficient sales process.
  4. Win Rate: The percentage of opportunities that result in a closed deal. A high win rate can indicate a strong sales team and effective sales strategies.
  5. Customer Acquisition Cost (CAC): The total cost of acquiring a new customer, including marketing, sales, and other related expenses. A low CAC can signify efficient customer acquisition strategies and a high return on investment.
  6. Customer Lifetime Value (CLV): The total revenue a customer is expected to generate for your organization during their relationship with your company. A high CLV indicates strong customer retention and upselling efforts.
  7. Churn Rate: The percentage of customers who discontinue their relationship with your company over a given period. A low churn rate signifies high customer satisfaction and effective customer retention strategies.

Leveraging Data Insights to Drive B2B Sales

Tracking the key metrics mentioned above can provide valuable insights to help B2B sales teams fine-tune their strategies and drive growth. Some ways to leverage these insights include:

  1. Identifying opportunities for upselling and cross-selling: Analyzing customer data can help sales teams identify opportunities to sell additional products or services to existing customers, increasing CLV and boosting revenue. 
  1. Refining lead generation strategies: By examining lead conversion rates and the characteristics of high-quality leads, sales teams can fine-tune their lead generation efforts to attract and engage more prospects with a higher likelihood of conversion. 
  2. Optimizing sales processes: Data insights can help sales teams identify bottlenecks or inefficiencies in their sales process. By addressing these issues, teams can improve sales cycle length and close deals more efficiently.
  3. Tailoring sales messaging: Analyzing customer data can provide insights into the pain points, preferences, and needs of your target audience. Sales teams can use this information to tailor their messaging, making it more effective and relevant to potential customers.
  4. Enhancing sales training and coaching: Monitoring win rates and other performance metrics can help sales leaders identify areas where their team members may need additional training or coaching, ensuring the entire team is equipped to succeed.

Conclusion

Embracing a data-driven approach to B2B sales is crucial for businesses in the competitive SaaS industry. By tracking key metrics, leveraging insights to optimize sales strategies, and continually refining their approach, revenue, growth, and sales pros can drive significant growth and stay ahead of the competition. Remember, the power of data-driven decision-making lies in the ability to adapt and evolve, making it an essential component of any successful B2B sales strategy.

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Product-Led Revenue Models: Which One is Right for Your Business?

To maximize revenue growth via user engagement and adoption, product-led revenue models have grown more popular in recent years. The premise behind these models is that firms may attract a huge user base by providing free or low-cost versions of their goods and then monetizing that user base via various revenue sources. OpenView Partners indicate that product-led adoption across tech firms grew from 45% in 2019 to 55% in 2022.

Seeking to explore the intricacies of product-led revenue strategy, this article uncovers the main product-led revenue models as well as some guidelines around how to decide which one of these might benefit your business.

Exploring the Different Types of Product-led Revenue Models

Overall, there are four main categories of product-led revenue models:

Freemium Model

This paradigm entails releasing a free basic, feature-limited version of the product, charging more for access to advanced settings or more use. Products with a low marginal cost of production often benefit from the freemium model since it encourages consumers to try the product before making a purchase decision. Businesses may gain a huge user base by providing a free version and converting a portion of those people into paying subscribers. Dropbox and Evernote are examples of organizations that have successfully embraced the freemium model. 75% of product-driven businesses select either a free trial or freemium approach, according to StatHeap.

Premium Model

Premium, which is central to this business strategy, encompasses an upgraded, more expensive version of the product. This pricing strategy is well-suited to items that substantially benefit their consumers. To attract customers who are prepared to pay more for a higher level of service, many companies now provide “premium” or “upgraded” versions of their products. Spotify and LinkedIn are examples of organizations that have effectively used the premium model. 

Pay-as-you-go Model 

As opposed to a flat rate, consumers are charged depending on their actual usage under this approach. This pricing strategy is convenient for items with irregular consumption since customers pay only for what they consume. Many consumers are hesitant to sign up for a service on a monthly or yearly basis, and companies may win them over by providing a pay-as-you-go option. Companies like Amazon Web Services and Twilio demonstrate the viability of the pay-as-you-go model. 

Subscription Model

Last but not least, the subscription model involves charging customers on an ongoing basis to continue using the product. Products like software and content services provide consumers with continuous value and work well under this paradigm. Businesses may attract and retain customers in the long run by using subscriptions. Netflix and Microsoft Office are two examples of subscription-based business models that have found success.

Start by Looking at the Competition

It is important to evaluate your competition and see their revenue models. This can give you ideas and help you differentiate yourself from the competition. For example, if your competitors use a subscription model, you may want to consider offering a pay-per-use model instead.

Bain & Company recently surveyed 176 top executives in the North American business-to-business software industry, and they discovered that roughly 75% are worried about competition from PLG businesses.

Deploy A/B Testing

A/B testing may be a great avenue to examine the effect of changes to the price structure, but it’s vital to avoid testing the dollar amount as the variable. Alternatively, organizations may test multiple value measures or price tiers to find which resonates best with consumers. This may help a corporation determine the best price structure that optimizes income while simultaneously giving value to the client.

Assess Your Pricing Strategy

When considering your pricing strategy, it’s important to determine what your users are willing to pay for your product. Conducting user research or surveys can help you gather this information. When determining your pricing strategy, you should also consider factors such as customer acquisition costs and customer lifetime value. Overall, you may consider a freemium model, where users can access basic features for free and upgrade to premium features for a fee. This can be an effective way to attract new users and generate revenue from existing users.

Define End-User Success

The success of product-led business hinges on how well it solves a problem for its users. To ensure that your product meets your users’ needs, it is important to start with an end-user success statement. This statement should outline what success looks like for your users and what value your product provides them. 

Unlike a sales-led company, where success is closing a deal, in a product-led company, success is defined by user success. In a product-led growth (PLG) model, the company’s success depends on whether users can see the product’s value. The company’s bedrock should be set up to support user success since it is the foundation upon which the company’s success is built.

Review Your Product-led Model

Once you have chosen a product-led revenue model, it is important to test and iterate. Start by testing the model with a small group of users and gather feedback. Use this feedback to iterate and improve your revenue model. Continuously testing and iterating your revenue model can help you identify new revenue streams and improve the overall user experience.

How to Implement a PQL Scoring System

How to Implement a PQL Scoring System

Arising as a cutting-edge solution for innovative enterprises, the PQL scoring system is a powerful tool to help your business streamline its lead generation and sales process. Accenture indicates that PQL usually generates 5x higher conversion rates than MQLs. However, according to Open View Partners, only 25% of companies have deployed a PQL strategy.

Deploying the Advent of PQL 

Overall, the Product-Qualified Lead (PQL) scoring system effectively identifies leads most likely to convert into paying customers. This system uses a scoring mechanism to evaluate leads based on their engagement with your product, including their product usage and behavior. By analyzing this data, you can identify leads more likely to purchase and focus your sales and marketing efforts on them.

Businesses that employ a PQL framework will utilize a scoring system to evaluate and rank PQLs. After that, they utilize the use of that rating system as a single source of truth to prioritize the time and efforts of the sales team in addition to those of the other departments. Automating the lead qualifying process is essential for businesses to effectively identify and prioritize the most promising leads. Defining a PQL is the first step, but implementing a scoring model for each action is equally important. The scoring model allows businesses to evaluate the activities of each lead and assign a score based on their level of engagement with the product or service.

Manual lead qualification can be a time-consuming and challenging process, especially for businesses with many leads. However, with the advancement of technology, several lead qualification software options are available in the market to make this process easier. These software options use artificial intelligence and machine learning algorithms to analyze and score each lead’s actions automatically.

Uncovering the Types of PQL Scoring

As highlighted by Clearbit, the PQL scoring process entails the calculation of two distinct fit scores, namely, the domain score and the persona score, to provide a comprehensive overview for the sales team. This approach is particularly significant for product-led companies transitioning upmarket, as product champions may not always be the decision-makers.

The domain score serves to evaluate whether an account has the potential to become a top 100 customer in the future. Additionally, typical personas, such as decision-makers, billing contacts, power users, and community champions, are identified within each domain based on available data. The sales team then utilizes the resulting information to update Salesforce and send out notifications through a product like Census, thus enhancing the quality of leads for sales development representatives.

Exploring the Process of Implementing PQL

When implementing a PQL scoring process, it is important to integrate it into your CRM or marketing automation platform. This allows for the efficient tracking and management of PQLs, ensuring that sales and marketing teams are equipped with accurate and up-to-date information.

Integrating the PQL scoring process into your CRM or marketing automation platform involves setting up a scoring model that assigns scores to leads based on their level of engagement with your product. This can be achieved by tracking user behavior and product usage, as well as other relevant metrics, such as the number of users, frequency of usage, and level of engagement with support and training resources.

Taking a systematic and thoughtful approach to defining the criteria for a qualified lead is essential to developing an effective PQL scoring process.

Step 1: Defining the Criteria for a Qualified Lead

Overall, the PQL scoring should start with determining the specific factors that make a lead a PQL in your business. This could include factors such as product usage, feature usage, user behavior, referral sources, or account data.

Step 2: Identify the Target Accounts for Your Ideal Customer Profile

This phase involves analyzing your current customer base and identifying common characteristics such as industry, company size, and revenue. By identifying these target accounts, you can focus on leads most likely to convert into paying customers.

Step 3: Segment Target Accounts

Next, you should categorize these target accounts into domains based on shared characteristics such as use case, vertical, or product suite. This allows you to develop a more focused and targeted approach to marketing and sales.

Step 4: Develop Buyer Personas

Within each domain, it is essential to identify the personas or stakeholders involved in the purchase decision, such as decision-makers, end-users, and influencers. Developing a deep understanding of these personas and their unique needs and challenges is critical in crafting effective marketing messages and sales strategies.

Step 5: Assign a Score for Each Domain & Persona

Establish the scoring system that assigns a score to each domain and persona based on their fit with your ideal customer profile and PQL criteria. This can involve considering factors such as company size, industry, and level of engagement with your product. Developing a robust and accurate scoring system allows you to prioritize leads and focus your sales and marketing efforts on the most promising opportunities.

Step 6: Monitor & Update

It is essential to ensure that the PQL scoring process is regularly updated based on changes in usage and engagement. This means the scoring model must be flexible and adaptable to user behavior and product usage changes. For example, if a user’s engagement with your product decreases over time, their PQL score may decrease, and they may no longer qualify as a PQL. Conversely, if users’ engagement with your product increases, their PQL score may increase, making them a more valuable lead.

Growth Matters: Zahi Malki

Growth Matters – Key B2B insights. Zahi Malki, VP of Customer Success & Professional Services @ WalkMe

In an age of constant innovation and fierce competitiveness, companies invest major resources to gain even the slightest advantage.


That’s why we started the Growth Matters series of interviews, where experienced industry leaders share key insights everyone should know in the domains of revenue, customer success, sales, and product.

In this installment, we have Zahi Malki, who’s been in the tech industry for over 20 years, and VP of Customer Success & Professional Service at WalkMe for the last (almost) 4 years.

Check out his thoughts on the role, challenges, and responsibilities of the modern CSM.

You’ve been in the customer success game for a long time! How has the role of the CSM changed over the years?

Over the past 10 years, the role of the Customer Success Manager (CSM) has undergone significant changes. It evolved from a reactive, support-focused function to a more proactive, revenue-generating one. Today’s CSMs are expected to drive adoption, upsell and cross-sell, and build strong relationships with customers.

In the past, the CSM was primarily responsible for ensuring customer satisfaction and reducing churn. However, today’s CSMs have a much broader mandate that encompasses the entire customer lifecycle.

One major change has been the increased focus on revenue generation. CSMs now play a critical role in driving upsells, cross-sells, and renewals. They work closely with the sales team to identify opportunities for growth and with the product team to ensure that customer feedback is incorporated into product development.

Another important shift has been the increased use of data and analytics. CSMs are now expected to have a deep understanding of customer behavior and to use this knowledge to proactively identify and address potential issues. They use data to track customer engagement, measure success metrics, and develop targeted outreach programs.

In addition, the role of the CSM has become more strategic. CSMs are now providing insights into the customer experience and helping to shape the company’s overall strategy. They work closely with senior leaders to develop customer-centric initiatives and to ensure that the company is delivering on its promises to its customers.

 

What are some industry trends, when it comes to technology, that you’re excited about?

One industry trend that’s particularly exciting is the increased use of artificial intelligence (AI) and machine learning (ML) to improve customer experiences. With these technologies, companies can analyze customer data and behavior to gain insights into their needs and preferences, predict potential issues before they occur, and provide personalized support and recommendations. 

Additionally, the use of chatbots and other automated tools can help provide quick and efficient support to customers, freeing up human agents to focus on more complex issues. Overall, the adoption of these technologies is expected to lead to better customer satisfaction and retention rates, as well as increased efficiency and cost savings for companies

 

What KPIs do you measure your team with and why did you choose these in particular?

The KPIs for measuring customer success teams can vary depending on the company’s goals and priorities. 

Some of the most commonly used key performance indicators (KPIs) in the customer success world are customer retention rate, customer satisfaction score, net promoter score, NDR, and churn rate.

They are widely recognized as important indicators of CS, and they provide valuable insights into the health of the customer relationship. 

Customer retention rate, for example, measures the percentage of customers who continue to do business with a company over a certain period of time and can be used to gauge the effectiveness of a company’s customer success efforts. 

Customer satisfaction score and net promoter score are both measures of customer satisfaction and loyalty and can provide valuable feedback on areas for improvement. Finally, churn rate measures the percentage of customers who stop doing business with a company over a certain period of time, and can be used to identify areas where customer success efforts may need to be improved. By tracking these KPIs, companies can better understand how well they are meeting customer needs and identify opportunities for improvement

 

What are some common challenges that your team faces when working with enterprise customers, and how do you overcome them?

Working with enterprise customers in the customer success world can be challenging, as there are several factors to consider, including communication, alignment of goals, and handling complex customer needs.

One of the biggest challenges is communication, as enterprise customers often have multiple stakeholders and decision-makers. Effective communication is key to understanding the customer’s needs and expectations, as well as ensuring that everyone is on the same page. 

To overcome this, customer success managers should establish regular touch-points with customers, develop clear communication channels, and make sure that all parties involved are aware of the project’s progress.

Another challenge is aligning goals between the customer and the vendor. Enterprise customers often have complex needs and may require customized solutions, which can make it difficult to align goals. To overcome this challenge, customer success managers should work closely with the customer to understand their needs, establish clear expectations, and create a plan that aligns with the customer’s goals.

Lastly, to overcome the customized solutions challenge, CSMs need to dig deep into understanding the customer’s needs, collaborate with product and engineering teams to develop customized solutions, and provide ongoing support to ensure that the customer is satisfied.

Overall, customer success managers should prioritize effective communication, alignment of goals, and flexibility to handle complex challenges.

 

As VP CS, which other departments do you work most closely with and how do you manage the cross-department alignment?

As VP of CS, it’s important to work closely with sales & presale, marketing, professional services, support, finance, and product development teams, to ensure cross-department alignment and collaboration. 

The most important cross-department alignment for CS is between the product teams, presale, and support teams. This alignment is critical for ensuring that customers have a seamless and positive experience throughout their journey with a company.

Establishing open and clear communication channels between these teams can be achieved with regular meetings, shared documentation, and various collaboration tools.

Additionally, avoid conflicts and misunderstandings by figuring out clear roles and responsibilities for each team, so that everyone understands how they fit into the overall customer success strategy. 

Overall, fostering strong alignment between companies can ensure that they are providing the best possible customer experience, which is critical to driving long-term success and growth.

 

How do you prioritize different accounts? Is it just a matter of focusing on the biggest fish?

Prioritizing accounts is not just about focusing on the biggest customers. It’s important to consider factors such as customer value, growth potential, strategic fit, and resource availability.

Prioritizing the right accounts is crucial to ensure that resources and efforts are utilized efficiently to achieve the best outcomes.

Customer success teams typically consider several factors such as the revenue potential of the account, the level of engagement, the customer’s needs and goals, the complexity of the customer’s business, and their overall fit with the company’s product or service.

Customer success teams typically provide different levels of support based on the type of customer (segmentation). For instance, premium or high-value customers may receive more personalized attention and dedicated support, while lower-tier customers may receive more self-service or automated support.

To ensure that all customers have the best experience, regardless of their payment level, customer success teams may focus on providing consistent communication, clear and concise documentation, and easy-to-use tools and resources. They may also offer training programs and educational resources to help customers maximize the value of the product or service. 

Ultimately, CS teams strive to build long-term relationships with customers and help them achieve their desired outcomes, while also driving business growth for their company.

 

What are some major misconceptions you see about the role of customer success?

One major misconception about the role of customer success is that it is solely responsible for customer satisfaction and retention. While customer success teams do play a crucial role in these areas, it is important to recognize that every department and individual within a company contributes to the customer experience.

This misconception may have arisen due to the increased emphasis on customer-centricity in recent years, which has led to a greater focus on customer success as a discipline. However, it is important to remember that customer success is a collaborative effort that involves everyone from product and engineering to sales and marketing.

To change this misconception, companies need to ensure that all employees understand the importance of customer success and are aligned around a shared customer-centric mission. This can be achieved through regular training, communication, and incentives that reinforce customer-centric behaviors and attitudes.

There may be differences in the way companies approach customer success depending on their size and stage in the industry. For example, smaller startups may have a more hands-on approach to customer success, with founders and early employees directly engaging with customers to ensure their needs are met. On the other hand, larger enterprises may have more established customer success teams and processes in place but may struggle to maintain a customer-centric culture across all departments. Ultimately, regardless of company size or stage, a strong customer success focus is critical for long-term business success.

 

From your experience, what can SaaS companies do better to reduce churn?  

To do better at reducing churn, SaaS companies must focus on providing excellent customer support and creating a product that meets their customers’ needs. They must also regularly communicate with their customers to understand their pain points, address their concerns, and offer solutions.

In the short term, focusing on customer success can lead to increased customer satisfaction, loyalty, and revenue. And the long term, it can help the company establish a positive reputation and attract new customers through word-of-mouth referrals.

Some actions that SaaS companies must take today include investing in customer support, creating a user-friendly interface, regularly monitoring customer feedback, and incorporating customer feedback into product development. They should also provide training and resources to help customers make the most out of their products. 

 

How to Improve Your Product Engagement Funnel for Better Results

How to Improve Your Product Engagement Funnel for Better Results

By systematically presenting potential buyers with products and services tailored to their specific needs, a well-developed “product funnel” may increase the likelihood that these individuals will make a purchase. Attracting new clients is just half the battle; a successful product funnel also has to provide them with a satisfying buying experience that encourages them to become loyal to the company. Salesforce indicates that more than 50%% of customers consider that companies must fundamentally transform their engagement. Furthermore, 64% of the customers expect tailored engagements based on past interactions.

As a business owner or marketer, you must clearly understand how your customers engage with your product or solution at each customer journey stage. In this pursuit, a product funnel is a powerful tool that helps you visualise and understand the different stages of your customer journey and the interactions at each stage. Emeritus estimates that more than one-third of businesses believe that increasing the level of engagement with their customers is the best method to boost sales.

Phases of the Product Engagement Funnel

At the top of the funnel, you have your potential customers or leads. These individuals have expressed interest in your product or solution but may not be ready to purchase yet. They become more engaged and likely to purchase as they move through the funnel.

The middle of the funnel is where you convert leads into customers. This is where you provide more in-depth information about your product or solution and begin to build trust and credibility with your prospects. At this stage, you may offer a free trial, a demo, or other incentives to encourage them to take the next step.

Finally, you have your loyal customers at the bottom of the funnel. Adobe highlights that retargeted visitors are 70% more likely to convert than non-retargeted visitors. These individuals have purchased and are now repeat buyers or brand advocates. It’s important to continue nurturing these relationships and providing excellent customer service to keep them returning.

Utilise Customer Data & Product Engagement KPIs 

Defining your target audience is a crucial first step in improving your product engagement funnel, and it starts with data. You can collect demographic information, behaviour patterns, and customer feedback to understand your ideal customer comprehensively. This data can be obtained through surveys, customer interviews, social media analytics, and website analytics.

Product engagement KPIs help firms assess product health and identify areas for product enhancement, such as retention rate, conversion rate, and customer happiness. They enable companies to focus on issue areas in the product engagement funnel. To explore this, a poor conversion rate might mean that firms need to concentrate on giving more information or incentives to convert leads into consumers. In a similar vein, a low retention rate may indicate that a company’s efforts might be better directed at enhancing the experience provided to its most loyal clients. Organisations may improve the efficiency of their product engagement funnel by monitoring and evaluating key performance indicators.

Integrate Social Proof

Social proof, defined as the influence of other people’s actions and opinions on our behaviour, can be essential to building trust and credibility with potential customers. By incorporating customer testimonials, user-generated content, and case studies on your website and social media channels, you can showcase the positive experiences of previous customers and provide evidence of the value your product or service offers. 

Ultimately, this can help to increase engagement and conversions by reducing perceived risk and uncertainty and demonstrating social validation. Encouraging your customers to share their experiences with your product provides valuable feedback that can be used to improve your offering and serves as a form of word-of-mouth marketing, which can be incredibly effective in building brand awareness and credibility.

Improve Your Copy

Getting people interested in your product and using it requires compelling product copywriting that attracts and retains your target demographic. If you want to create content that gets people to take action, consider the following suggestions. Instead of emphasising your product’s qualities, stress its advantages. 

Furthermore, it is important to highlight the beneficial effects your product will have on their daily life. Moreover, deploy storytelling to your advantage in your product copy; readers will relate to your words. Use a narrative to illustrate the issue your product addresses or to provide a personal account of how your product has benefited a customer. 

Implement Customer Feedback

Continuously modifying your product based on customer feedback is crucial for keeping your customers engaged and satisfied. Listening to customer feedback can help you identify areas for improvement, feature requests, and pain points that must be addressed. By acting on this feedback and making changes to your product, you can show your customers that you value their input and are committed to delivering a product that meets their needs. It is feasible to acquire customer feedback through surveys or user interviews. 

This avenue can help you understand how customers use your product and what features they want to be added or improved. In addition, you can monitor social media and online forums to see what customers say about your product and address any issues or concerns. Finally, making product modifications doesn’t have to be lengthy or complex. Simple changes like adjusting a button’s placement or improving your product’s speed can greatly impact customer engagement.

Unravelling the Importance of PQAs in a Product-Led Growth Strategy

Unravelling the Importance of PQAs in a Product-Led Growth Strategy

As businesses constantly seek ways to drive growth and gain a competitive edge, the product-led growth strategy emerges as one of the most popular paradigms for forward-thinking enterprises. However, this can only be accomplished if companies are aware of and able to track the most important factors contributing to product-led growth. This is where PQAs, or Product Qualified Accounts, come in. 

In a PLG framework, PQAs play a crucial role since they reveal whether or not a product is successfully meeting the needs of its target audience and whether or not those target consumers will ultimately become paying clients. Considering the PLG market grew from $21B in 2016 to $687B in 2020, it’s something you just have to consider. 

Deploying PQA in Different Phases of the Customer Journey

In both onboarding and expansion scenarios, PQAs can aid in accurately targeting upselling and cross-selling campaigns, which can be critical in driving growth and success for a product-led growth strategy.

When it comes to onboarding, it is important to consider both user-level and company onboarding. A key aspect of this is determining if the account has added teammates, which is a simple yet essential question to ask. PQAs can be particularly effective in onboarding when an account has reached a certain PQA score and is ready for more personalized onboarding by Sales or CSM. Factors such as firmographic information, including company size, can significantly determine if a custom onboarding experience is warranted.

Similarly, PQAs can be leveraged in expansion efforts, with different variables factoring into the scoring model. For example, the frequency of adding new users to the team may be considered in scoring an expansion PQA instead of the time the team takes to complete onboarding for an onboarding PQA.

Achieving Better Product-led Growth with PQAs

By leveraging PQAs, businesses can identify areas where their product is falling short and take action to improve the user experience, drive engagement, and increase conversion rates.

Higher Conversion Rates

Since PQAs have previously experienced the product’s advantages, they are more likely to convert into paying customers. They are conversant with the product, comprehend the value it provides, and have already entered the deliberation phase of the purchasing process. Hence, their conversion rate is greater than that of conventional leads, who are still in the stage of the purchase process known as awareness. 

Improved Customer Retention 

PQAs are already pleased with the offering, which results in higher client retention rates. Customers who are pleased with a product are more likely to continue using that product, renew their subscriptions to it, and gesturing that product to others. This will increase client loyalty, leading to more revenue for the firm. 

Faster Sales Cycle

Since PQAs have previously used the product and are familiar with its benefits, their sales cycle is significantly shorter. They have a higher propensity to make a purchase choice quickly and go farther down the sales funnel as a result. This results in a more rapid revenue increase and a more effective sales procedure. 

How PQAs Enhance Capabilities for Product Development 

PQAs are responsible for providing the product development team with insightful input. The product development team may enhance the product and produce a better user experience by first understanding how consumers use it and what they find useful. This results in a product that is more likely to satisfy the wants and preferences of the consumer, which in turn boosts the client’s satisfaction and loyalty to the brand.

Using first-party product data to identify strong customer interest and intent signals, OpenView Partners prioritized their sales efforts and allocated their resources more effectively. This allows them to focus on the accounts with the highest potential value, which in turn can lead to greater customer acquisition and retention rates. Their approach involved splitting accounts into high and low-fit categories based on firmographics (e.g., company size, industry) and product signals or intent (e.g., how frequently a customer uses a particular feature). In this manner, the reps were able to prioritize their efforts by identifying the accounts with the best fit and highest signals, allowing them to focus on those accounts first.

Bottom Line

When deployed effectively, PQAs provide insightful input to product development teams, resulting in better products that satisfy the wants and preferences of consumers, boosting client satisfaction and loyalty to the brand. PQAs also lead to higher conversion rates, improved customer retention, faster sales cycles, and enhanced capabilities for product development.

NRR vs GRR

Why Net Revenue Retention is More Important Than Gross Revenue Retention for SaaS Companies 

As SaaS companies grow and mature, it becomes increasingly important for them to track their revenue retention, which is the percentage of revenue that a company retains from its existing customers over a certain period of time. This metric is essential for measuring the health of a SaaS business, as it indicates how much value the company is delivering to its customers and how much it is able to monetize that value over time.

Traditionally, SaaS companies have focused on gross revenue retention (GRR), which measures the percentage of revenue retained from all customers, including those who churned and then later returned. However, in recent years, there has been a shift towards a more nuanced metric called net revenue retention (NRR), which only includes revenue from customers who have not churned. In this blog post, we will discuss why NRR is more important than GRR for SaaS companies and how it can help them to achieve sustainable growth.

What is Net Revenue Retention (NRR)?

Net Revenue Retention (NRR) is a measure of the revenue a SaaS company retains from its existing customers after accounting for cancellations, downgrades, and upgrades. Essentially, NRR looks at the revenue generated from customers who are still actively using the product or service. To calculate NRR, you would take the revenue generated from a cohort of customers at the beginning of a period (e.g. a year), and then subtract the revenue lost from customers who canceled or downgraded their subscription during that period. Finally, you would add the revenue gained from customers who upgraded their subscription during the period.

NRR is a more refined metric than GRR because it takes into account changes in the revenue generated by individual customers over time. It allows SaaS companies to see how much revenue they are generating from their existing customers and how much they are losing due to churn or downgrades. By tracking NRR, companies can identify areas where they need to improve their product or service, as well as identify opportunities for upselling and cross-selling.

Why NRR is More Important than GRR for SaaS Companies

While GRR is still a useful metric for SaaS companies, NRR is becoming increasingly important. There are several reasons why NRR is a better metric for measuring the health of a SaaS business.

First, NRR provides a more accurate picture of the company’s revenue growth. GRR can be misleading because it includes revenue from customers who churned and then later returned. Considering your churned users can get to a significant percentage, it’s definitely something you should consider in your calculations. While this may look good on paper, it does not necessarily indicate that the company is delivering value to its customers. NRR, on the other hand, only includes revenue from active customers, which means that it reflects the company’s ability to retain its customers and generate revenue from them over time.

Second, NRR is a better indicator of customer satisfaction. By focusing on revenue generated by active customers, NRR takes into account the value that the company is delivering to its customers. If a company has a high NRR, it indicates that its customers are satisfied with the product or service and are willing to continue paying for it. If NRR is low, it may indicate that the company needs to improve its product or service to better meet the needs of its customers.

Third, NRR provides a clearer picture of the company’s revenue potential. By tracking NRR, SaaS companies can identify opportunities for upselling and cross-selling to existing customers. This is important because it is much easier and more cost-effective to sell to existing customers than to acquire new ones. If a company has a high NRR, it indicates that there are opportunities to increase revenue from existing customers through upselling and cross-selling.

Fourth, NRR is a better indicator of long-term growth potential. While GRR can fluctuate from quarter to quarter, NRR provides a more stable measure of a company’s revenue retention over time. By focusing on revenue generated by active customers, NRR provides a more accurate picture of a company’s ability to generate sustainable growth over the long term.

Fifth, NRR takes into account changes in customer behavior over time. GRR does not account for the fact that some customers may downgrade their subscription or change their usage patterns over time. NRR, on the other hand, reflects changes in customer behavior and allows companies to adapt their strategies accordingly. By tracking NRR, SaaS companies can identify trends in customer behavior and adjust their product or service offerings to better meet the changing needs of their customers.

How SaaS Companies Can Improve NRR

Improving NRR requires a deep understanding of customer needs and behaviors. SaaS companies can take several steps to improve their NRR, including:

  1. Providing exceptional customer service: Happy customers are more likely to stick around and recommend your product or service to others. Providing exceptional customer service can help to improve customer satisfaction and reduce churn.
  2. Offering targeted upgrades and add-ons: SaaS companies should offer upgrades and add-ons that are tailored to the needs of their customers. By offering targeted upgrades, companies can increase their NRR by generating additional revenue from existing customers.
  3. Regularly updating and improving the product or service: SaaS companies should constantly be improving their product or service to better meet the changing needs of their customers and thus, increase customer satisfaction and reduce churn.
  4. Investing in customer success: SaaS companies should invest in customer success programs to help their customers get the most out of their product or service. By helping customers to achieve their goals, companies can increase customer satisfaction and improve NRR.
  5. Track customer usage and satisfaction: From product-led revenue platforms to expensive BI teams, to simple NPS surveys, tracking customers’ activity and happiness is critical for building a solid growth strategy. 

In conclusion, while gross revenue retention (GRR) has been the traditional metric for measuring revenue retention for SaaS companies, net revenue retention (NRR) is becoming increasingly important. 

NRR provides a more accurate picture of a company’s ability to retain its customers and generate revenue from them over time. To improve NRR, SaaS companies should focus on providing exceptional customer service, offering targeted upgrades and add-ons, regularly updating and improving their product or service, investing in customer success programs, and tracking their users’ activity and satisfaction. By doing so, they can improve customer satisfaction, reduce churn, and increase their revenue retention over time.

Unlocking Business Success

Unlocking Business Success: The Crucial Importance of Customer Retention for Maximum Growth

As Robert Half once said, “When the customer comes first, the customer will last.” And this is definitely true for all businesses in the extremely competitive landscape of 2023. For many years, the core question for each business was: “What should we do to acquire more customers?”. Now, more and more companies realize that to enhance long-term growth and thrive, it is imperative to switch towards “How do we retain the customers we already have?”

As the 2022 Twilio Segment Growth Report emphasizes, companies are adjusting their focus from “growing at all costs” to fostering long-term client loyalty in response to the volatile macroeconomic environment and enhancing customer retention. 

Moving forward, we’ll explore the most important benefits propelled by customer retention.

 

What is Customer Retention?

Customer retention encompasses the capacity of a business to retain its existing customers and maintain their loyalty over time. Implementing efficient strategies for customer retention is not just a numbers game; it is about building relationships, streamlining the customer journey, providing value, and creating memorable experiences. 

To truly retain customers, businesses must meet and exceed customer expectations at every turn, building loyalty that will encourage them to return for more.

 

Increasing ROI & Profits

Increasing customer retention rates can significantly impact a company’s bottom line. The expenses of acquiring new customers have climbed by more than 50% in the last five years alone. Research from Harvard Business School shows that even a 5% increase in customer retention rates can lead to a 25-95% increase in profits. 

Existing customers often make up a significant portion of a business’s revenue, with estimates from Small Biz Trends suggesting that they can account for up to 65% of a company’s business. This makes retaining them crucial for long-term success.

Furthermore, when you focus on retaining your existing customers, you won’t need to spend as much money on marketing to attract new ones. This doesn’t mean you should abandon marketing altogether but supplement it with methods catering to customer retention. Doing so can reduce your customer acquisition costs and boost your profits.

 

Enhancing Innovation & Optimization

Without a doubt, customer retention is a complex process that requires a deep understanding of customer needs and preferences, as well as a commitment to delivering the best possible customer experience. 

 

Apptentive have shown that almost all customers (97%) are more likely to remain loyal to a business that considers their suggestions, while over half (55%) are less inclined to do business with a firm that does not.

 

When a business has a laser-sharp focus on its customers’ desires and demands, it can better address them and strengthen its position in the market against competitors. In this way, the value of keeping existing customers may help you spot opportunities for product improvement and refinement in response to market shifts.

 

Converting More Sales

Loyal clients become more valuable assets to your business. Instead of constantly searching for new leads, you can focus on nurturing your existing customers and maximizing their potential value to your business. Several studies highlight that repeat buyers are more loyal and have a higher propensity to try new items (by a factor of 50%) and spend (31% on average) than first-time buyers.

 

In addition, there is a 14-fold greater chance of making a sale to an existing client than to a new one, as indicated by Pearson, upselling and cross-selling to returning customers is like shooting fish in a barrel. These customers already trust and appreciate your brand, so it’s easier to convince them to purchase additional products or services. 

 

Encouraging Word-of-Mouth Advertising

Word-of-mouth advertising is a powerful venue for businesses because it is not only the most cost-effective form of advertising but also the most trustworthy. When loyal customers share their positive experiences with others, they advocate for the brand, essentially providing free advertising.

 

Demonstrating the power of customers’ personal recommendations, Nielsen found that almost half of U.S. consumers rely on their friends and family for brand awareness, and 92% of people trust recommendations from those close to them over any other type of marketing. 

 

According to research by Temkin Group, if a customer has a good experience with a company, 77 %of them would refer that brand to a friend. These “mini-marketers” may work in tandem with your existing marketing and sales activities to help bring in new leads and save time in the process of closing sales.

 

Bottom Line

By focusing on building strong relationships with existing customers and exceeding their expectations, companies can benefit from increased ROI, word-of-mouth advertising, and more sales conversions. 

 

Retaining customers can also provide valuable insights into product innovation and refinement. As businesses focus on retaining their customers, they position themselves for long-term growth and success.


If you efficiently leverage your product data, you can acquire valuable insights into customer behavior and preferences, allowing you to tailor your approach and increase the likelihood of repeat business. If you’re interested in learning more about how to do this, contact us today to book your demo and take the first step toward improving your customer retention and overall business growth.

Group 13

Prioritizing Customers: Proven Strategies for Successful Upselling and Retention

In the rapidly evolving world of SaaS, staying ahead of the competition requires a deep understanding of your customers, product, and market. However, with unlimited data and platforms to choose from, it can be overwhelming to figure out where to start.

To help you get started, empowering product teams with the tools they need to deliver value to their users, increase conversion rates, and drive growth is of paramount importance. Leveraging the power of product-led change with enterprise sales efficacy gives every team a clear understanding of what they need to do to achieve maximum impact.

In this blog post, we’ll explore the key strategies and processes that drive successful upsells and retention. We’ll cover important topics such as defining your ideal customer, building a growth flywheel playbook, and understanding the importance of customer observability.

Whether you’re a seasoned SaaS veteran or just starting, these strategies will help you prioritize your customer base and drive growth for your business.

Product-led revenue: The importance of customer observability

Product-Led Growth (PLG) is a business model focusing on building and growing a product-driven company. It is designed to increase customer engagement and drive revenue through product usage and customer satisfaction. One of the critical components of a successful PLG strategy is customer observability, which allows you to track and understand how customers interact with your product.

Forbes understands the ever-growing importance of PLG, especially for technical products, as the world of AI, sales, and marketing are becoming blurred and combined.

Customer observability provides valuable insights into the customer journey, allowing you to identify areas of improvement and optimize the customer experience. By understanding how customers engage with your product, you can make informed decisions about product development, marketing, and sales strategies. This leads to increased customer satisfaction, higher conversion rates, and, ultimately, increased revenue.

The Benefits of Customer Observability

Improved Customer Experience: By understanding the customer journey, you can identify areas of improvement and optimize the customer experience. This leads to increased customer satisfaction and loyalty.

Increased Conversion Rates: Learning how customers interact with your product allows you to make informed decisions about product development, marketing, and sales strategies, leading to higher conversion rates so that you can be there at the most meaningful moment.

Better Product Development: Customer observability provides valuable insights into the customer journey, which can inform product development decisions and lead to creation of products that better meet customer needs.

The importance of customer observability in driving product-led revenue cannot be understated. AI platforms combine product-led growth efficiency with enterprise sales efficacy, helping every team understand exactly what needs to be done and where their efforts need to be focused on achieving maximum impact. With proper systems and processes in place, you can gain a deeper understanding of your customers and confidently drive product-led growth.

The key to successful upsells and retention

In the competitive landscape of modern SaaS, understanding your customers and what they need is essential to success. By defining your Product Qualified Lead, you can prioritize your customer base and focus on the right customers, leading to increased revenue and customer satisfaction.

A PQL is a crucial component of product-led growth and helps businesses understand who their most valuable customers are, their needs, and how to reach them effectively. By focusing on your PQL, you can make the most of your resources and direct your efforts toward growth initiatives.

Here’s what you can expect from defining your PQL:

  1. Prioritize your customer base: By understanding your PQL, you can prioritize your customer base and focus on the right customers, driving successful upsells and retention.
  2. Drive growth and success: By focusing on your PQL, you can drive growth and success by efficiently and effectively using your resources.
  3. Improve customer satisfaction: You can improve customer satisfaction by understanding your customers and their needs, leading to increased revenue and growth.

Defining your PQL is valuable in unlocking the potential for successful upsells and retention. You can drive growth and success while improving customer satisfaction by prioritizing your customer base and focusing on the right customers.

Growth Flywheel: Build a Playbook for Success

Now that you have clearly defined your lead and sales strategy, you can start implementing your growth flywheel. 

A growth flywheel is a (mostly) autonomous system that drives growth through a series of interconnected actions. The goal of a growth flywheel is to create a virtuous cycle that continually drives development and improvement, allowing your business to scale and succeed. One of the pivotal components of a successful growth flywheel is having a playbook that outlines the strategies and processes that drive growth. 

The Importance of a Growth Flywheel Playbook 

Below are the benefits of implementing a well-put-together growth flywheel for your team. Remember that skill can be trained, with the right processes, regardless of where your staff member starts from.

  • Consistency: A growth flywheel playbook ensures that all teams follow the same processes and strategies, leading to consistent and predictable growth.
  • Alignment: By having a shared understanding of what drives growth, teams can work together more effectively and achieve better results.
  • Scalability: A well-defined growth flywheel playbook allows you to scale your growth efforts, making it easier to drive growth as your business grows.

Constructing and Scaling Your Growth Flywheel Playbook 

Building a successful growth flywheel playbook requires a deep understanding of your customers, product, and market. Start by defining your target customer and the value you offer them. Then, identify the key growth drivers, such as customer acquisition, engagement, and retention. Finally, define the strategies and processes to drive growth in these areas.

A growth flywheel playbook is a living document, constantly evolving as you learn and grow. Continuously monitor and adjust your growth flywheel to ensure it drives the desired results.

By building a growth flywheel playbook, you can drive consistent and predictable growth, align your teams, and scale your business for success.

 The Future of Product-Led Growth

Product-led growth (PLG) is a business model that prioritizes the customer experience and focuses on building and growing a product-driven company. It has proven to be a successful approach to driving revenue, increasing customer engagement and satisfaction, and driving growth. The critical components of a successful PLG strategy are customer observability, defining your ideal customer (Product Qualified Lead), and implementing a growth flywheel playbook.

In the rapidly evolving world of SaaS, staying ahead of the competition requires a deep understanding of your customers, product, and market. With the power of advanced AI technologies, companies can now clearly understand what they need to do to achieve maximum impact. Customer observability provides valuable insights into the customer journey, allowing businesses to make informed decisions about product development, marketing, and sales strategies. Defining your PQL is crucial in unlocking the potential for successful upsells and retention.

Implementing a growth flywheel playbook is also essential in driving consistent and predictable growth. A well-defined growth flywheel playbook ensures that all teams follow the same processes and strategies, leading to better results and scalability as the business grows.

In conclusion, the future of product-led growth is bright. With the right tools and strategies, businesses can prioritize the customer experience and drive growth, leading to increased revenue, customer satisfaction, and success. Companies that embrace PLG and adopt these key strategies will continue to stay ahead of the competition and drive success in the fast-paced world of SaaS.

10 Invisible customer journey

Unlocking the Secret to Product-Led Growth: The Power of Understanding the Invisible Customer Journey

When it comes to driving growth for your business, it’s easy to focus on the obvious metrics, such as website traffic and conversion rates. But have you ever stopped to consider the invisible journey that a customer travels to make their decision to convert? The hidden factors that influence a customer’s decision-making process can be just as important as the obvious ones.

From the first time a customer interacts with a brand, they go through an invisible journey that shapes their perception of a brand and the likelihood of doing business with the company again in the future. This invisible journey is the culmination of subtle cues and touchpoints that ultimately drive product-led growth. 

What is Product-Led Growth (PLG)?

Product-led growth (PLG) has become a buzzword in the business world as more companies recognize the power of letting their products speak for themselves. PLG is about creating an experience-driven product that resonates with customers and drives them through the entire customer journey. This is why a deeper understanding of customer needs and preferences is crucial for businesses looking to optimize their PLG strategy.

Think of it like a game of chess. You may have all the right pieces on the board, but if you don’t understand the subtle tactics and strategies at play, you’ll never be able to outmaneuver your opponent. Similarly, businesses may have a great product and a solid marketing strategy, but without understanding customer behavior and insights, they’ll never be able to optimize their growth potential fully.

Decoding the customer journey

So, what does the customer journey look like in practice? Let’s say you’re a SaaS company that specializes in project management software. While your website may be getting plenty of traffic, you notice that many users are dropping off at the pricing page.

By digging deeper, you discover that many of these users are small businesses that are hesitant to commit to long-term contracts. With this information, you can adjust your pricing strategy to offer more flexible options, resulting in a significant increase in conversions.

But the customer journey doesn’t end at the pricing page. To fully optimize growth, it’s crucial to analyze why small businesses are dropping off at other stages. It could be that the information or resources on the website are insufficient or that the user interface is confusing. To address these issues, you can improve the website’s design and user experience to increase conversion rates.

Consider A/B testing different pricing options and website designs to see which ones have the best impact on conversions. Additionally, reach out to small businesses that have dropped off at the pricing page through email or phone to understand their specific concerns and answer any questions they may have. This will help you enhance the customer experience and foster closer relationships with prospective clients.

Leveraging the Customer Journey for PLG Success

With a clear understanding of the customer journey, it’s time to put this information to work. Here are some ways to optimize your PLG strategy using the customer journey:

Mapping the customer journey

Identify the critical stages of the customer journey, including awareness, consideration, purchase, and post-purchase.

Identifying pain points and opportunities

Analyze each stage of the customer journey and identify areas for improvement in the user experience.

Streamlining the onboarding experience

Ensure the onboarding process is easy to understand and provide resources and support to help customers get started.

Building a feedback loop

Ask for customer feedback at key stages in the customer journey and use that information to iterate and enhance the product.

Optimizing for retention

Recognize the factors that influence customer retention and concentrate on improving them.

Analyzing customer data

Use customer data and analytics to track behavior and identify aspects of the product that are promoting growth and engagement.

Personalizing the experience

Use consumer data to personalize the experience and develop targeted marketing strategies to engage different customer segments.

Use consumer data to personalize the experience and develop targeted marketing strategies to engage different customer segments.

Continuous testing and optimization

Keep testing and refining all aspects of the customer journey, from the onboarding process to the in-app experience. Doing this will help you enhance the overall user experience and drive growth.

 

Unlock Your PLG Strategy with the Invisible Customer Journey

In conclusion, unlocking the power of the “invisible journey” is key to driving growth for businesses. By gaining a deep understanding of customers and their behavior, businesses can improve customer retention, increase acquisition, and enhance conversion rates. By utilizing consumer data to personalize the experience, businesses can develop targeted marketing strategies that effectively engage different customer segments. Continuous testing and optimization of the customer journey is critical, from the onboarding process to the in-app experience. This helps businesses enhance the overall user experience and drive growth.

The customer journey is a complex and ever-evolving process, and businesses need to stay ahead of the curve to succeed. Rather than relying on assumptions and guesses, businesses should embrace the “invisible journey” to make data-driven decisions and adopt best practices that foster growth. Embracing the power of the “invisible journey” will empower businesses to take control of their growth strategy and achieve long-term success.

10 funding

Fueling the future of product-led revenue – Announcing our $8.5M seed funding

We are thrilled to announce the securing of an $8.5M seed funding round led by Eight Roads, TechAviv, and a select group of angel investors, including company co-founder Ariel Maislos.

This funding will allow us to further develop our platform and grow the team as we work to bring you the best tools for converting your customer usage data into revenue.

Our platform allows you to have complete visibility of where your customers are in their customer journey by analyzing their engagement with your product in real-time. We believe that this technology has the potential to revolutionize the industry and make a real impact on the lives of our customers.

“SaaS companies are in a unique position where they can actually measure the value their users extract from their products. By correlating this information with data coming from CS, sales, and support, we create a customer observability platform, which is crucial to generating sustainable and proactive revenue growth. Securing our funding is a huge step toward our platform’s capability to help businesses succeed in a tough and unpredictable market. Especially when KPIs are now more focused on sales efficiency and NRR. As revenue teams need more product insights, we aim to provide an out-of-the-box solution to a problem which companies tried to solve internally until now.”  

Itamar Falcon, CEO of Coho AI. 

We would like to express our gratitude to all of the investors, customers, and employees that joined us on this journey! 

Stay tuned for more developments in the near future! 

Read the full story as it was shared by TechCrunch.

Group 10

From Good to Great: How Customer Health Scores Drive Customer Success

As a customer success professional, one of your primary goals is to ensure that your customers are successful in achieving their desired outcomes using your product or service. This requires a proactive approach to identifying and addressing potential issues or challenges that your customers may face. One effective tool for doing this is a customer health score, which is a quantitative measure of a customer’s overall health and success with your product or service.

In this blog post, we will delve into the importance of customer health scores for customer success teams and how they can be used to drive customer success. We will also discuss some best practices for creating and using customer health scores, as well as how they can be integrated into a customer success strategy.

What is a customer health score

A customer health score is a metric that measures the overall health and success of a customer with your product or service. It is typically a numerical score or rating, with a higher score indicating a healthier and more successful customer.

There are various ways to calculate a customer health score, but it typically takes into account a combination of factors such as usage and adoption of the product, customer satisfaction, and any potential risks or issues that the customer may be experiencing. Some customer success teams may also consider other factors such as the customer’s business outcomes or the value they are receiving from the product.

The purpose of a customer health score is to provide a quick and easy way to assess the overall health of a customer, which can help customer success teams prioritize their efforts and identify potential issues or risks before they become major problems.

Why are customer health scores important for Customer Success teams?

While many companies still don’t use customer health metrics, it’s a missed opportunity that could be a significant growth engine. Here are 4 reason why:

Prioritizing efforts

With a customer health score, customer success teams can quickly assess the overall health of their customers and prioritize their efforts accordingly. This allows them to focus their time and resources on the customers who are most in need of assistance or are at the greatest risk of churning.

Identifying potential issues early

A customer health score can help customer success teams identify potential issues or challenges before they become major problems. This allows the team to proactively address these issues and prevent them from escalating.

Driving customer success

By regularly monitoring and improving a customer’s health score, customer success teams can help ensure that the customer is successful in achieving their desired outcomes using the product or service. This can lead to increased customer satisfaction and loyalty, which can ultimately drive revenue and growth for the company.

Providing a common language

Customer health scores provide a common language for customer success teams to use when discussing the overall health and success of their customers. This can help teams communicate more effectively and ensure that everyone is working towards the same goals.

Best practices for creating and using customer health scores

When creating and using customer health scores, it’s important to keep the following best practices in mind:

Choose the right metrics

The metrics that you choose to include in your customer health score should be relevant to your product or service and should accurately reflect the overall health and success of your customers. Be sure to consider a variety of factors such as usage, satisfaction, and potential risks.

Regularly review and update the score

Customer health scores should be regularly reviewed and updated to ensure that they are accurate and relevant. This may involve adding or removing metrics, adjusting the weighting of different metrics, or making other changes as needed.

Involve the customer in the process

When developing and reviewing customer health scores, it’s important to involve the customer in the process. This can help ensure that the metrics chosen are relevant to the customer’s needs and goals and that the customer is aware of their overall health and success.

Use the score as a starting point for improvement

A customer health score is not a static metric – it should be used as a starting point for continuous improvement. Customer success teams should work with customers to identify areas for improvement and develop action plans to address these areas.

Leverage data and analytics

Customer health scores should be based on data and analytics, rather than subjective opinions or assumptions. This helps ensure that the score is objective and accurate and can be used to drive meaningful actions and improvements.

By following these best practices, customer success teams can effectively create and use customer health scores to drive customer success and improve the overall health and success of their customers.

Integrating Customer Health Scores into a Customer Success Strategy

Incorporating customer health scores into your customer success strategy is an important step in driving customer success and ensuring that your customers are achieving their desired outcomes. 

Set up regular check-ins with customers

Customer health scores should be regularly reviewed and discussed with customers. During these check-ins, customer success teams can review the customer’s health score and discuss any potential issues or challenges that the customer may be facing.

Use customer health scores to guide customer success plans

Customer success plans should be tailored to the specific needs and goals of each customer. Customer health scores can be used to guide the development of these plans and to identify areas where the customer may need additional support or resources.

Use customer health scores to drive cross-functional collaboration

Customer success is often a cross-functional effort, involving teams such as sales, marketing, and product development. .Having a single source of truth can be used to drive collaboration across these teams and ensure that everyone is working towards a common goal.

Leverage automation and technology

There is  a variety of technologies available that can help automate the process of tracking and managing customer health scores. These tools can help customer success teams save time and focus on more high-value activities, such as working with customers to address their needs and drive success.

Takeaways 

Customer health scores are a crucial tool for customer success teams as they help prioritize efforts, identify potential issues early, drive customer success, and provide a common language for teams to use. 

By regularly reviewing and updating customer health scores and integrating them into a customer success strategy, CS teams can build stronger, more loyal customer relationships and drive revenue and growth.

Want to know more about how you can incorporate customer health score into your daily work? Contact us!

Group 11

Maximizing B2B SaaS Revenue with NRR: Why It Matters and How to Do It

In times of recession, businesses are more likely to cut costs wherever possible, including by canceling subscriptions to non-essential services. This means that B2B SaaS companies need to focus on retaining their existing customers in order to continue generating revenue. NRR allows companies to track their success in doing so and make any necessary adjustments to their retention strategies.

Winning at revenue growth also relies on revenue retention. Revenue retention will give you the keys to unlocking all other aspects of revenue growth strategy. 

These users prop up all outreach to new customers showing that your brand has a high-level of trustworthiness for long-term relationships. 

Revenue growth can seem like a no-brainer, but when it comes to revenue retention, it can feel like a shot in the dark. So, what is net revenue retention, and why does it matter so much? 

Net revenue retention, abbreviated NRR, is a metric used to boost business growth. 

What is NRR?

Net Retention Rate (NRR) is a key metric for any B2B software as a service (SaaS) company, but it becomes particularly important in times of economic recession. NRR measures the percentage of a company’s existing customers that continue to use and pay for its services from one period to the next.

Industry leaders describe NRR as “net dollar retention.” 

Net dollar, or net revenue retention, the company considers upgrades, downgrades, and customer churn to analyze the business customer base.  

NRR breaks down into monthly segments called monthly revenue retention, or MRR. MRR is a rough estimate of the revenue that comes from your user base each month. 

Why is NRR important?

Experts believe NRR is now more important than ever before. 

With the current economic slump, it is now more important than ever before to retain customer bases. 

Estimates state that a business can deliver 20 percent growth yearly with the existing customer base. 

Growth happens without adding a single new user. Why? Because a stable customer base has expansion opportunities. We’ll talk about that in a minute. First, we’ll define the logic and the math that backs NRR. 

Know what churn looks like 

When factoring NRR, you will also want to look at churn cases. Churn is the rate at which customers end relationships with your brand. 

If a customer cancels a subscription, this may not be the same thing. They may still access your free version of the product, and yet not be paying for a subscription for whatever reason. 

Churn distinguishes between these cases and cases where a customer has broken a connection with your brand forever. 

The math of NRR 

Net Revenue Retention requires some simple math. Use the NRR equation:

 (Contraction MRR – (Churn MRR + Expansion MRR)) / Starting MRR

Alright, so math sucks. Let’s break this down. 

To find your NRR, you will add your growth to your starting MRR. Subtract downgrades and churn from this new MRR. Now divide the new MRR by your starting MRR. Last, multiply the MRR you got from the division by 100%. This final result is your NRR. 

How to use your NRR 

You might be wondering why we put you through the math. Trust us, it’s worth it.

Simmering it down, NRR is the tool we use to gauge business growth potential from our existing user base. These are more than just fancy calculations. We’re solving for where our growth potential is so we can strategize the best ways to influence that growth to happen.

Industry leaders say that a good NRR is going to show growth of over 100%. 

When the NRR passes the 100% mark, we see growth instead of a static revenue retention rate. An NRR of 100% shows that our annual revenue retention, or ARR, has either grown or remained the same.

Ideally, we want the NRR number to be 109%. This shows that we are retaining a good revenue income and also growing by roughly 9%. 

Recognize the room to grow 

While 9% is ideal, we have found that a business can grow by 20% per year by keeping a healthy net revenue retention. 

Using NRR gives us insights into how to upsell our subscription base. 

Because NRR can show us who is already engaging with a paid version of the product, we can use these metrics to estimate who will be open to an upsell. Upselling happens when your current customer base is open to the value offer for a higher-cost subscription. 

Invest time in expansion opportunities 

Remember a little while ago when we said NRR was good for expansion opportunities? We’ll bring it full circle now. Upselling is one of the expansion opportunities we can explore through NRR math. 

KPIs for the upsell 

We need a little bit from our data rather than solving for growth rates. KPIs take over here. Informed KPIs give us the data groups and tools for seeing the value our users are looking for in an upgrade. We sell from there. 

Building the upsell 

Setting data priorities straight empowers the upsell process. As we explore upselling, we work towards expansion revenue goals. Expansion revenue is any revenue that expands from initial customer contact. We call it expansion revenue because we’re exploring an expanding relationship with our customers. 

Upselling is one of two primary expansion catalysts. The second catalyst is cross-selling. Cross-selling introduces customers to new features or add-ons within their existing plans.  

Prevent churn 

Remember that data can alert you to positive growth opportunities, but it can also show you areas where improvement is key. To avoid churns and “drop off,” you need to know your data and streamline the upsell and cross-sell to work naturally with where the customer is in their relationship with you.

 Marketing leaders remind us that no one likes to be “sold to.” A customer with an issue is more likely to have a negative reaction to expansion measures if they feel that their current needs are not being met. However, addressing this is relatively simple. When in doubt, return to your user data flows.    

Know your data 

We talked about KPIs a little while ago. Here is where they get all-important. Without a clear use for data, teams fumble around product management funnels in the dark. 

This is why actionable, AI-led product growth modeling is important. Here we point a laser to the KPI and hone in on data that is essential for reaching those KPI-based goals. 

Make your data work for the customer 

Whether you upsell or cross-sell, make data work for the customer. Boost your pipeline to understand the customer user-experience flow. Then, use this information to work in natural upsell and cross-sell opportunities.  

Coho’s AI-enhanced product-led growth insight tool will notify the team when a customer reaches a milestone. 

Notification helps teams to optimize the flow of selling prompts in a way that flows with the customer journey and needs. Is a customer outgrowing their current subscription? It’s time for an upsell. Is the customer running into a few roadblocks based on the need for one additional feature? Cross-sell to them. 

Coho AI enables personalized selling based on usage insights. 

Takeaways 

Customers are people. Data helps us relate to them in ways that are as diverse as they are. With better insights into the flow of their needs and wants, we can use the NRR to optimal advantage. 

Coho AI believes that product-led revenue growth is people-led revenue growth. AI empowers human interaction in mass numbers in ways that other growth models never could. 

Bottom line: the NRR is vital to underlying our core community of users. By building on this, you will invest in the life and future of not only your product but also your brand community.  In an economy driven by uncertainty and a deep need for connection, this makes daylight to dark difference between you and your competition. 

5 Importance of KPI tracking

Why Seamless KPI Tracking Matters

Key performance indicators, or KPIs, are the metrics that businesses use to see how they are doing and where they are going. Without KPIs, teams struggle to find ways to move forward. That’s why tracking KPIs—the right ones—is mission critical. 

Forbes points out that businesses can waste precious focus on the wrong data. In a list of 16 signs that a team may be tracking KPIs incorrectly, the Forbes Council explained what “wrong data” looks like. The wrong focus happens when the revenue impact or goal for tracking a data set is unclear. The team might start with data they already have on hand, and fail to gather new info relevant to a new direction. 

This is why seamless KPI tracking is essential to growth. With tools that comb through data and hone KPIs, teams can track data sets that make sense for goal-oriented tracking. 

What KPI Tracking Means For Product-Led Growth

Building a “product-led” growth model means building a product that sells itself over time. The Product-led Growth Collective calls “product-led growth” the future of business growth. 

Product-led models focus on the buyer, why they buy your product and the factors that make your product trustworthy and ready to solve the user’s pain points. Boiled down, a product-led growth model focuses on designing a product that is so well made its value speaks for itself in user experience scenarios such as free trials.  

With the product-led market model, seamless KPIs are essential because they give actionable insights into what makes your product relevant to your ideal buyer. 

The right KPIs put product designers on the same path as the buyer’s journey and help you understand where improvement can meet the pain points best. Product-led growth is a design-led commitment to making a product function with ease and efficiency, according to the Product-led Growth Collective. 

How Seamless KPI Tracking Helps Steer Growth Opportunities 

KPIs highlight “key performance indicators”. That information can show the things that make for a positive impact, but it can also show negative things that need improvement, according to Indeed.com. 

Sometimes key performance indicators show problem areas rather than expected outcomes. This data helps teams crack down on areas that need work. 

Seamless KPI tracking that shows the right data in real-time is an asset for steering opportunities. When a team leader sees from the mission-real KPI what areas should be highlighted, they can hone in on opportunities. 

Seamless, Timely, and Relevant KPI Tracking 

Tracking KPIs should include time frame factoring. The KPI information may be interesting, but irrelevant to the near future goal. A seamless KPI tracking system will allow for goals to adjust to their order of current relevance. This means that information that is most important now is ready for the task at hand, while information that will be important for a later target goal is queued according to its need to appear. 

Why Tracking User Behavior Is Key 

When your product is your leading point, focusing on user behavior data is the key point to kickstart customer success. This data lets you walk a mile in your user’s shoes, follow their journey, and understand their needs and wants. With this understanding, a team can orchestrate user journey paths to drive more meaningful product engagement. This self-service path translates into conversions and can reduce churn. 

User Journey Data and Targeting Ideal Customers 

Rather than taking on a bunch of new tools, teams can focus on data and use their toolkit in informed and efficient ways. This is why Coho.ai helps teams optimize their existing tech stack. The Coho system seamlessly integrates existing tools to cut down the time between product insights and Go-To-Market actions. 

Using your current tools data in a timely way, you can reduce the time-to-value of a user’s experience with your product. Analyze how consumers are engaging with and using your product. 

Watching these interactions, you can create workflows in your existing toolkit that target the roadblocks to user paths. By doing this, you are cutting down the work your users have to do to understand the user experience or UX flow. 

Earlier we talked about six steps to optimize your user’s journey. Once user journey paths are identified through data, you’ll need to target your ideal customer. Focus special attention on building client relationships by upselling services to highly engaged users. 

Want to seamlessly track your KPIs? Contact us!