Every Business Needs a Second Growth Engine…

I often meet leaders looking to build a second growth engine for their business. They want to see their firms thriving for decades to come, and are acutely aware of the need to diversify and continue innovating.

Seeking the next big thing, executives analyse areas where they have unique knowledge and competitive advantage. They hire external firms to help them understand future markets. Go into brand new territories to expand their potential revenue. Overall… these executives invest a lot of resources into building that next cash cow…

Creating innovative strategies like this is extremely important for longevity.

But what’s sometimes forgotten is how the current customer base can be a gold mine of growth opportunities.

I don’t mean forgotten, as in, leaders don’t think of their current customers as potential future customers. What I mean is that they don’t always invest in nurturing and truly partnering with their customer base to co-create the future.

The solution to unlock this growth engine? Customer Success.

Customer Success Level 1: You As A Vendor

While many companies invest in customer success, a lot of them are still at “level 1”. 

They are concerned with building transactional relationships. The customer buys the product, you deliver it and try your best to enable the expected outcome. 

This model is the one with the least skin in the game. 

Why?

Because whether the customer gets results or not, they are paying for the product and are tied to a contract. You won’t get future business if you don’t deliver.

But, that’s next year’s problem. 

It doesn’t mean companies at Level 1 will always have a churn problem. You can have very little churn and satisfied customers. However, your customer see you as a vendor, not a partner.

That means you are fighting for retention and your customer base isn’t powering your growth.

Customer Success Level 2: You As A Partner

Some companies have reached “level 2” where the customer’s outcome is directly tied to the pricing model. As the customer achieve their objectives, the company captures more revenue.

This model of Customer Success is one where the service provider truly has skin in the game. Their contract might include a software fee, but it’s usage and results that generates the bulk of the revenue. 

If you get this right, you have a really healthy revenue retention number and your current installbase is meaningfully contributing to the growth of your business.

Because your growth is connected to your customer’s, they see you as a partner.

In both levels, your customer success team is of vital importance.

When you invest in building a world class customer success program, you are multiplying the lifetime value of your customers. A healthy Revenue Retention will fuel growth exponentially. 

Think about it… If you have a 120% Revenue Retention, your business is growing by 20% every year without you ever having to get new customers through the door.

This type of result is what makes growth sustainable, and future proofs your organisation against the “bad times”.

Customer Success Level 3: You As A Growth Accelerator

So how do you get to “level 3”? 

Firstly, you will need to stop thinking about success as a department and a team, and start thinking about it as part of your continuity strategy. 

You might already have programmes that connect clients and the product teams. But those programmes focus on immediate development opportunities. 

To move to the next tier, you will need to build solutions that will solve adjacent problems for your customer. The strategic areas you are not necessarily involved in today. The problems of tomorrow.

And to do that, you’ll need better feedback loops from the customer to your senior leadership team.  Because you will have to get into your customer’s minds and hearts and learn about the future of their industries, their niche challenges, how they might be disrupted, emerging technologies in their fields.

Ask customers what’s keeping them up at night when they think about the future.

Your customers will be able to tell you things that consultants only dream of. They have information on the problems they are willing to pay real money to solve.

When you understand these problems, it’s time to leverage your visionaries.

They are the people in your team closest to your customers. People who can connect dots and think creatively. Entrepreneurial spirits that when given time and space, will have fantastic ideas on how your business can seize hidden opportunities. Not only from success, but from sales, product, engineering, marketing, finance etc. 

Get those 2 groups together. Run hackaton-type events where those two groups get to mingle and to come up with their own challenges, opportunities and solutions. 

Give your team time to work on those projects on paid company time.

Let them get scrappy and test those ideas with real customers, in fact, the customers that were in that room and have helped those ideas come to life.

It can feel counterintuitive to take your team’s focus from driving today’s success. It can be scary to involve customers in actively building the future, because it might frustrate them if they don’t have today’s pieces of the puzzle sorted. But if you get it right, innovating from the frontlines can pay enormous dividends. 

Not convinced?  Gmail, Twitter, Buffer, Todoist, and Dwolla all started as a side projects. What was once something being built on spare time by a few people, while the “real work” was still being done, are main offerings generating great value for businesses and their customers.  

When you get to Level 3 you are co-creating your future offers with your customers and securing future business in a more cost-efficient way, while also building a legion of raving fans. People that will champion your business wherever they go.

And the benefits to employee engagement and retention can be meaningful.

Give people have a project they are passionate about, instead of just doing the mundane and following a process.

Customer Success CAN be your second growth engine, you just need to take it up a notch by delivering on outcomes, having skin in the game by creating a model where you win when your customer wins and co-creating the future of your business in partnership with your customers.