How to Drive More Growth from Customer Expansion Conversations

The post How to Drive More Growth from Customer Expansion Conversations by Anton Rius appeared first on Corporate Visions.

If you’re like most companies, you focus the lion’s share of your growth budget on demand generation and customer acquisition.

But the sale isn’t over just because your prospect becomes a customer. There’s still ample opportunity to grow revenue from customer expansion—nurturing your existing customer relationships, helping them see the value of expanding with your solution, and continuing to build loyalty over time.

Consider these stats:

Analysts estimate that 70-80 percent of the average company’s annual revenue comes from existing customers in the form of renewals and upsells. Yet, the majority of companies allot only 10-20 percent of their sales and marketing budgets toward customer expansion.

In other words, the majority of sales and marketing spend goes
to customer acquisition, which only amounts to 20-30 percent of your customer
lifecycle. Clearly, there’s a significant, yet overlooked opportunity for
businesses to tap into customer expansion as a growth engine.

Here are three ways to capitalize on the opportunity and
effectively keep and grow revenue with your existing customers.

1. Train Customer Success for Sales Opportunities

It’s easy for Customer Success to become so focused on the
idea of helping and supporting that they overlook everyday selling
opportunities. We recently had one such experience while cancelling a SaaS product.

We reached out to the account executive who helped us with
onboarding last year. Here’s how the conversation went:

Our email:

Not sure who to contact but we will not be renewing [product]. It’s a great tool in theory but just doesn’t fit our needs at this time.

Please let me know who to contact on your side if it’s
set up as an auto-renew.

Their response:

Sorry to hear. No auto-renew in the contract, so no
action needed on your end.  Hope you’re doing well!

What happened? The rep made no attempt to ask why the
product didn’t fit our needs. Nor did they make any effort to help us see more
value in their solution. Instead, they let a $24,000 annual contract walk out
the door. They practically held the door open for us in the process!

How often does this happen in your organization? How do your
Customer Success reps identify and manage situations like this?

Whether it’s to win a renewal, upsell a customer, convince
them to pay more, or apologize after a service failure, your Customer Success
team is on the front lines of conversations that directly impact your revenue.
And they need to learn how to identify sales opportunities, engage your customers,
and skillfully win them over.

2. Know When (Not) to Challenge the Status Quo

The biggest threat to your competitive success isn’t the
other players in your industry—it’s your prospect’s Status Quo Bias—their
preference for not doing something different from what they’re doing today.

To create the urgency to change and overcome Status Quo Bias,
you need to introduce your prospects to “unconsidered needs”—problems or missed
opportunities they’ve underappreciated or don’t yet know about.

When you’re talking to a new prospect, it makes sense to
challenge their status quo and persuade them to switch to your solution. In
fact, research
conducted by Corporate Visions found that a provocative messaging approach
that begins by introducing an unconsidered need enhances your persuasive impact
by 10 percent.

But to your existing customers, you are the status
quo. And research
shows that using a provocative, challenging message when you’re trying
to renew or expand business with them will increase the likelihood that they’ll
shop around by at least 10-16 percent.

Bottom line? Whether you’re talking to a prospect or an
existing customer, you’ll win more business if you tailor your messaging to
match the psychological drivers behind each unique buying conversation.

3. Tailor Your Sales and Marketing Messaging for Customer Expansion

The majority
of companies (58 percent, according to a Corporate Visions survey) see no need
to differentiate their messaging between customer acquisition and customer
retention/expansion.

Why? It’s mostly due to a lack of budget or resources. In an
effort to save costs, these companies recycle the same messages and content,
regardless of where the customer is in their lifecycle. However, our research
has proven that the psychology of an existing customer is 180 degrees different
than a potential prospect. And messaging approaches used to acquire a new
customer will backfire when used to renew or expand an existing relationship.

To be effective, you need to take a tailored approach to messaging
for customer expansion.

Tailoring your sales and marketing messages for existing
customers is a two-step process. First, you identify what questions your
customers are asking in key buying moments. Then, you create messages that are
most likely to boost their loyalty and persuade them to take action in each of
those moments.

Corporate Visions research has identified four critical decisions
your existing customers need to answer to renew or expand business with you:

Why Stay? Why should I renew with you? Why Pay More? Why should I pay more for
your solutions?Why Evolve? Why should I buy even more
from you?Why Forgive? Why should I trust you after
a service failure?

So, how do you build the messages and skills needed to
effectively respond to each of these questions?

We’ve built several resources to help.

Customer Expansion Resources

The First Annual Customer Expansion Marketing and Sales
Conference

Join us in London on September 25th for a
full-day event dedicated to helping you improve your customer expansion efforts.
This event will be packed with original research, scientifically-backed
messaging approaches, tips for delivery skills, and stories from real-life
practitioners. Learn more at https://cvi.to/LondonExpand2019.

The Expansion Sale, a new book by Erik Peterson and
Tim Riesterer, authors of The Three Value Conversations and Conversations
That Win the Complex Sale.

Backed by years of research into what motivates your
existing customers to buy, this book reveals a tested and proven approach to messaging
that will fundamentally change how your organization approaches customer
conversations. Learn more at http://expansionsale.com.

eBooks for Marketing and Sales Enablement

Check out our Customer Expansion eBooks to learn specific,
scientifically-proven messaging frameworks for renewing your customers, communicating
price increases, convincing your customers to expand, and regaining trust after
a service failure.

The Sales Enablement Guide
to Customer Expansion

The
Marketer’s Guide to Customer Expansion

Don’t let your renewal and upsell opportunities walk out the door. Armed with these resources from Corporate Visions, you’ll learn the messaging techniques and skills you need to keep and grow more revenue with existing customers.

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