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Accelerating profitable growth: How to tip the scales in your favor

Accelerating profitable growth: How to tip the scales in your favor

I’m going to get a bit snarky.  Maybe I’m not entitled to, so let me know if there’s anything disagreeable here…

Seems to me that the shortest path to accelerating profitable growth is through customer loyalty.  We’ve seen so many examples where this is true and following below is why and how to make it happen in B2B.  Of course there are other ways to grow:  For example, we know that good Merger & Acquisition activity can accelerate top-line growth… but considering the investment, is it profitable (or at least “optimally efficient”) growth, and with a better ROI than true customer loyalty?  I’ve not seen good evidence (anyone have pointers?), so in general I don’t think m&a is “better,” yet such activity probably is easier than driving true customer loyalty (and I’ll elaborate below).  Plus, there is conventional wisdom that CxO tenure is only ~2 years so M&A is likely a better shorter term solution for the execs that want to cash out as fast as possible.  But then again, maybe average tenure is only ~2 years because those executives are failing to build sustainable and profitable growth (a.k.a loyalty)…?

So I challenge leadership to think bigger.  Here’s my logic to understand why an effective Voice-of-Customer program is critical to your B2B company’s growth.  Make it happen, and reap the rewards:

Statement

Rationale

B2B SaaS Companies need profitable growth.

Profitable growth increases shareholder value (critical even for private companies!).

Loyal customers buy more and advocate on your behalf.

• Loyal customers bring in more revenue while reducing cost of sales

• Therefore, loyal customers accelerate the rate of profitable growth.

• “Disloyal” customers buy less and tell friends and colleagues to stay away.

Accelerating profitable growth comes by growing the
ratio of loyal customers : not-loyal customers.

So how to improve this ratio?

Loyalty grows by strengthening relationships.

• Loyalty is defined as a strong feeling of support or allegiance.

• B2B customers feel loyal when your products and services are aligned to their objectives

•  Remember there is no customer, but there is a group of contacts within an account that either make / influence buying decisions or spread positive/negative word-of-mouth.  Are you hearing from the right people?

Relationships are strengthened by demonstrating that you are listening.

• The more you can demonstrate listening, the easier it is for a customer-contact to feel supported and be loyal.

• Demonstrated listening = Asking + Acting

• The less you demonstrate listening, the harder it is for a customer-contact to feel heard and supported.

Demonstrated listening comes from addressing what
“customers” are telling “you” (your company)

• Even though the “front line” CSMs / Account Teams hear from specific people in the account, the rest of the company doesn’t hear the feedback and therefore can’t address it. Just as there are multiple contacts in the account in different roles that have differing wants and needs, so too there are multiple roles within your company (“you”) that need to hear and act on the voice-of-the-customer.

• CSMs / Account Teams don’t always interact with all the people (roles/persona such as decision makers/execs/leaders, key influencers, project managers, IT personnel, end users, etc) that others in the company need to hear.  All of those people have “sentiment” that results from working with your company, and whether directly involved in purchase decisions or not they all have a word-of-mouth impact in the marketplace.  Be careful that you know which contacts and roles from which you are hearing.

• Although your company can’t necessarily do everything that customers want, you can address concerns with work-arounds, best practices, or managing expectations.

Therefore, setting up opportunities to hear your customers and address their feedback strengthens relationships and drives loyalty

When done right, Voice-of-customer (VoC) programs are an ideal way to enable everyone in the company to hear what’s working and what’s not working.

Waypoint Group provides a complementary Program Evaluation session — no selling! — for B2B companies that are looking to get more from their VoC efforts.

Q.E.D.

Either through consultative best practices, tools, and templates, or through
TopBox, your Customer Engagement Operating System,
Waypoint Group helps B2B companies build effective Voice-of-Customer programs that listen and act.

Waypoint Group certainly has a horse in this race because we think loyalty is the shortest path to build a thriving business.  But maybe I’m wrong… what am I missing?

 

Steve is the Founder of Waypoint Group and mastermind behind TopBox, the voice of customer engagement platform for B2B. As a customer success veteran, Steve has helped shift the Net Promoter® framework for SaaS and B2B companies, highlighting the need for account-based KPI's and measuring ROI for CX. Beware of those silent accounts! Contact him at steveb@waypointgroup.org.

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