How Business Maturity Plays Into Your Expansion Strategy

April 18, 2016 Kia Puhm

How Business Maturity Plays Into Your Expansion Strategy

Anyone who runs knows how it takes time to build up your practice.

At first, your goals may be to simply get some exercise. The more you run, however, the easier it becomes. In time, running may become so enjoyable that you may want to start doing short races. When those races go well, perhaps you’ll run farther distances...and so it goes.

Many customers who use SaaS products follow the same path. As they start to learn a product, their progress will be incremental starting from the beginning. In time, they become more comfortable and extract more value from the product.

This concept of continual development is described as “business model maturity” because the customer evolves or matures as they use your product. When a customer success team encourages, influences and supports a customer’s journey, the customer continues to see value, uses more of the product through upsells and cross-sells, and becomes more loyal (aka sticky).

So how do customer success teams expand a customer’s use of a product?

It involves the following ingredients:

Vision

In an earlier blog post about how to be a strategic partner and retain revenue [link], we talked about the concept of being a strategic partner to your customers. It means you need to listen and understand what your customers want to achieve and then create opportunities for them to be successful.

As important, you need to provide a long-term view of the customer for revenue generation. Having a long-term view or roadmap for success should include more adoption of your product within their business operations. If this happens, it sets the stage to solidify their use of the product and increase their usage of it.

Motivation

When we talked about using benchmarking to demonstrate value and reduce churn, it put the spotlight on using benchmarking data so that customers have the ability to see how they’re doing against their relevant peer group. This sets the stage to motivate the customer to do more with your product.

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Pacing

By knowing what can be accomplished with your product and the motivation to do more by seeing their success, the stage has been set for product expansion.  

There is one risk, however, that can sabotage everything: pacing.

You could have a motivated customer who sees the big picture but if you try to get the customer to do everything at once, your expansion plans could be ruined and, even worse, you could lose the customer. It is like asking someone to complete a marathon the first time they go running. It would be painful and they would quickly lose their interest in running.

Pacing the journey is therefore a critical part of your expansion strategy, the pace should be aligned with your customer’s maturity in their use of the product.

A customer’s journey with your product within their business environment is never linear.  In the first year, they may use your product in a rudimentary manner or only part of the feature set to achieve their objectives.  

As you customer continues to evolve their business, their use of your product will evolve. They will naturally mature their adoption of your product within their business operations as they see the value it delivers and what more that can be done with it.

This adoption, or customer maturity, will happen over time as they continue to become more proficient with your product, although not all at once. This means the following:

  • Customers will continue to advance what they’ve already done or look for new ways that your product will support their business growth at that stage in their evolution and

  • Customers will not be able to do everything with your product at once to be successful. In many cases, it could be detrimental to their adoption.

As a result, customer success has to keep these points front and center, and support the customer journey accordingly.

Think of the customer journey as iterated many times over the lifetime of the customer. It repeats at every stage of evolution. Customers will follow the journey in their first stage of development to reach their objectives. As they evolve further with their business and your product, they will follow the journey again, using more advanced features to achieve their next set of objectives.

This is an opportunity for SaaS companies because it lets them “land & expand” customer accounts as customers use more of your product to support their evolving business and corresponding objectives.  

At the same time, customer success teams need to facilitate this evolution with the correct pacing to align with the customer’s maturity with your product so they continue to see value and enjoy using the product.

Summary

It goes without saying that understanding how the concept of business maturity plays into your expansion strategy is important. It provides SaaS companies with the opportunity to evolve a customer’s success roadmap as they continue to change and expand the use of your product within their business.

To do it successfully, customer success teams need to provide:

  • Vision for how the product will continue to make the customer successful and evolve their business

  • Motivation to the customer by demonstrating the success they are having

  • Correct pacing that is aligned to the customer’s maturity with your product so it is enjoyable and easy to use your product.

The post How Business Maturity Plays Into Your Expansion Strategy first appeared on KIA CX Consulting.

Accelerating Customer Expansion by Managing the Customer Journey

About the Author

Kia Puhm

Kia Puhm is an entrepreneurial executive with 21 years of experience leading strategic corporate initiatives. She has held executive positions in account management, customer success, services, and support at companies such as: Oracle, Eloqua, Adobe (Day Software), Intelex Technologies, and Blueprint Software Systems. Kia has pioneered the art of Customer Experience by leading businesses through the transition to customer-centric organizations. Her methodology provides clients with a disciplined and sustainable approach to increasing customer lifetime value & loyalty.

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