Hey, Toni from Growblocks here! Welcome to another Revenue Letter!
This weekly email is my way to share knowledge and build a community of people who love to learn more about growing revenue in a data-driven and scientific way.
Anything in particular you want to hear my thoughts on? Drop me an email, and I might use it in my next article.
There’s a good chance your customer might be flirting with someone else.
Maybe it’s not so serious.
It could be that a competitor’s new feature has them attending live demos to see what’s up.
Or they’re checking out free trials to see what life could be like on the other side.
Or maybe it is serious.
Maybe their renewal is around the corner, and they’re questioning the value of their current agreement.
The point is, there are 1000 legitimate reasons they’re doing it, but everyone flirts behind the backs of their current vendors.
You’ve probably done it. I definitely have.
And with companies cutting costs and taking a second look at their tech stack, everyone is at risk of hurting that NRR number.
So what can you do about it?
The churn detector
The good news is that there are ways you can tell if someone is flirting.
When I worked at Falcon (a social media suite company, acquired by Brandwatch), we indexed all of our customers' social media posts.
And we set up an alert when customers published from a competing app.
That would then trigger a series of events to mitigate it, and prepare our CS team with any material they need.
It didn’t always work to save the churn, but we were at least usually aware it was coming.
That was something we built internally, and you will need to get creative to do the same.
There are a few technologies out there that might help you. Software that looks for fingerprints of specific vendors. They usually call it “technographic information”.
You should use this to have nerdy discussions with your product and RevOps folks.
Figure out what customer fingerprints are out there.
And create signals you can at least react to.
Kick off the renewal early
What do some of the best teams save churns? They start their renewal process early.
And I’m not talking about a few weeks before the end of the contract.
I mean EARLY.
One tactic I like a lot is basically not stopping the new biz process.
You win a customer, you onboard them, and while they’re still in the honeymoon phase, offer them a small upgrade.
More seats. More usage. More anything.
But tie that increase to an early renewal.
And renew that customer basically 9 months early.
Now the customer is still happy from their current deal, and with the added value and lock-in, they have no reason to flirt with other vendors.
Land and maintain
Let’s face it, everyone on the planet wants to increase NRR.
But the fact is, very few people know how to do it.
And thanks to benchmarks from OpenView, we know it’s harder than ever.
While we historically have seen 120% or more be the benchmark. OpenView and a couple of others now put it in the range of 105%.
This means land and expand isn’t a realistic strategy for most of us anymore. We have to focus on land and at least maintain.
And sure, to get there I can always say that you need to customer-centric culture, empower your CS teams and create feedback loops, etc.
But that’s all generic advice that we all know.
The most powerful and simple thing to do in my mind is this:
Ask your customers what to build next.
And build it.
Yes, many product managers are flaring up in rage right now and they have a point.
But listening to what your customers saying will help you to renew them.
And keep in mind, that could also mean non-product things.
I had a situation once where our customers told me our support sucked and only covered EMEA hours.
It was expensive, but the right move to upgrade that team.
P.S. If your new year’s resolution is to keep on top of important metrics across your GTM, like NRR, then check out what we’ve been cooking up at Growblocks. If you want to know more, email me and I can give you a demo personally.