Unless your business is transactional, nurturing your existing customers should be just as important as acquiring new logos.
The way I see it, closing a deal is just the first step. It’s what comes after – onboarding, upselling and cross-selling, renewal – that determines your customers’ ability to grow with your product and, consequently, the fate of your own growth.
The cost of selling SaaS can be pretty high. The median SaaS startup takes 11 months to make back the money spent acquiring a customer. In other words, you need your customers to be satisfied and willing to pay you for nearly a year. Otherwise, you’re losing money on every customer you acquire, which will cause your company to flame out.
“If you want to achieve sustainable growth, you have to keep your customers around for as long as possible”
That’s why I think it’s so important to have account or relationship managers on your sales team dedicated to building relationships with customers. It’s a difficult job, but an important one. By being a trusted partner to your customers, a good account manager supports your business in three ways:
- Expansion: Growing accounts that are spending a low amount but have high potential.
- Retention: Maintaining accounts that are spending a lot and are at the top for growth.
- Contraction, i.e. monthly spend stability: Fighting to keep customer spend at the same level.
If you want to achieve sustainable growth, you have to keep your customers around for as long as possible. The plain truth of the matter is that companies built on recurring revenue can’t afford to treat customers like they’re disposable.
This post was excerpted from “The Sales Handbook”.