In the subscription economy, cost of delivery matters in setting prices, but the factor that’s quickly becoming dominant is value delivered. As described in the book B4B: How Technology and Big Data Are Reinventing the Customer-Supplier Relationship, customers increasingly want to pay for outcomes, or “realized value.”
User nurturing can have a big positive impact on both adoption and customer success, as we’ve discussed in earlier research alerts. But user nurturing can also be critical to retention. Like so many customer dynamics, churn starts gradually—and if left unnoticed, it can develop into issues that are impossible to resolve. Assuming you’ve been able to achieve your implementation and adoption milestones, any customer and revenue churn usually starts with user churn. User churn (i.e., loss of users) is when individuals start to drift away from using your solution. At renewal time, this drop in usage results in seat churn (i.e., loss of quantity on renewal), which is the first loss of revenue. Ultimately, further usage drops can result in […]
You might not normally consider customer success when you’re thinking about marketing—but in the subscription economy, customer success can be critical to making marketing campaigns more effective. Why? The short answer is that customer success data can help you lower your cost per lead and increase your number of opportunities—and we’ve watched as one company has used customer success data to grow its closed opportunities by 2,400%. More on that example shortly, but first let’s examine the theory behind the data: In the subscription economy, sustained growth is not based on customer acquisition—it’s based on maximizing customer lifetime value. This means that to grow, you must effectively market up-sells and cross-sells to the right customers at the right time. This is where customer […]
In the last research alert, we talked about the “90/10 Rule of Adoption.” That was an observation based on our own real-world data which shows that after 90 days, a non-loyal user has only a ten percent chance of becoming a loyal user. Like the time-honored 80/20 rule, our 90/10 rule is meant as a guide for setting priorities—and the key takeaway is that adoption is critical to the customer journey. The 90/10 rule of adoption encourages companies to better understand the dynamics of customer adoption, because adoption is often highly correlated with customer retention and renewal revenue. This correlation between adoption and retention makes intuitive sense: Customers only want to pay for what they actually use, so if adoption […]
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