• Gross revenue retention measures how well you maintain revenue from your current customers.
• Net revenue retention measures how well you retain customer revenue, and grow from your install base.
• NRR and GRR do not take revenue from new logo business into account.

To make it to the Super Bowl, a football team must have two things: a strong defense and a strategic offense. The defense maintains a good field position and prevents the opposing team from scoring points, while the offense orchestrates smart plays to gain additional yards and score points. Similarly, to be successful, a B2B enterprise organization needs to prevent churn and increase revenue. That’s why it is important to understand and track both gross retention and net retention. Measuring and analyzing how your company manages these two factors is critical to growth, and in an era where more companies are being recognized for efficient growth, GRR and NRR are two critical business metrics for CS organizations and executive teams focused on customer-led growth. Distinguishing between these two metrics can provide insight into the health and success of your company, so let’s take a deeper look into what each metric is, how to calculate them, and how to apply them.

What is gross revenue retention (GRR)?

Gross retention, or gross revenue retention (GRR), measures how much of your monthly recurring revenue (MRR) you retain after you’ve subtracted the effects of churn or downgrades to lower pricing tiers. It does not account for upgrades or expansion. Depending on your business model and subscription terms, GRR can be calculated in monthly, quarterly, or annual terms. It ensures your business maintains a strong position with your current customer base. 

How to calculate GRR

Gross Revenue Retention (GRR) measures how much revenue you retain from existing customers, excluding any expansion revenue.

Formula: 

GRR = [ (MRR from renewals – MRR lost from churn – MRR lost from downgrades) / MRR at the beginning of the month] x 100

GRR gives you a snapshot of how stable your revenue is when you only consider customers who renewed, decreased their monthly spend, or churned. However, it does not factor in any additional revenue from customers who increased their average spend.

Isolating your recurring revenue without considering these growth factors is useful because it tells you how well you maintain your revenue solely from your current customer base. GRR provides a long-term outlook on how much revenue you can expect to make without assuming your customers increase their spending. At the same time, it tells you how much revenue you’re losing because of customer churn or downgrades. 

This visibility can reveal early warning signs if you’re facing a long-term risk of losing revenue, and be a leading indicator of problems such as product issues, increased competition, or loss of product/market fit. Measuring GRR empowers you to start taking preventive measures like implementing a customer success adoption plan to discourage downgrades or ensuring you’ve adequately communicated the value delivered to champions and key decision-makers.

What is net revenue retention (NRR)?

Going back to our football example, net retention, or net revenue retention (NRR), takes on the role of the offense, orchestrating smart plays to score points by retaining existing customers — while making strategic moves to gain additional revenue. It’s like a well-executed offensive strategy, where upsells, cross-sells, and expansions are the tactical plays that advance your business down the field, yard by yard, securing revenue victories beyond the initial customer acquisition.

How to calculate NRR

Net Revenue Retention (NRR) measures how much revenue you retain, including expansion from upgrades and cross-sells.

Formula:

NRR = [(MRR from renewals + MRR from upgrades – MRR lost from churn – MRR lost from downgrades) / MRR at the beginning of the month] x 100

Step-by-step calculation:

1. Start with your Monthly Recurring Revenue (MRR) at the beginning of the month.
2. Add MRR from renewals (customers who renewed).
3. Add MRR from upgrades (customers who increased their spending).
4. Subtract MRR lost from churn (customers who canceled).
5. Subtract MRR lost from downgrades (customers who reduced their spending).
6. Divide by the starting MRR, then multiply by 100 to get a percentage.

Example calculation:

• Starting MRR: $100,000
• MRR from renewals: $95,000
• MRR from upgrades: $10,000
• MRR lost from churn: $2,500
• MRR lost from downgrades: $2,500

NRR = [($95,000 + $10,000 – $2,500 – $2,500) / $100,000] x 100 = 100%

This example illustrates how you can maintain a 100% NRR even if you’re losing revenue from churn and downgrades as long as upgrades offset your revenue loss. Your NRR can exceed 100% if you have high renewals combined with strong upgrades, low churn, and low downgrade. Ideally, this is what you should aim for to grow your revenue. Net retention can be impacted by several variables, such as your go-to-market motion, customer segment, or company stage.

Why GRR and NRR matter for growth

As GTM Partners shows, you could double revenue every five years — without adding any new customers — if you had a $35M business with 120% NRR. And that’s why GTM Partners says, “NRR is the single most important metric of efficient growth.” 

Though the metric has been on the decline for public companies since 2022, 110% NRR is the median for public cloud companies, according to OnlyCFO. As an example of customer-led growth, Github exceeded 130% NRR by driving tight alignment across its sales and customer success organizations.

NRR helps you focus on how quickly your revenue grows from upgrades, which can give you insight into how well your cross-sell and upsell strategies work. If your analysis indicates that you’re underperforming in these areas, it’s time to implement new offensive strategies, such as developing a customer expansion strategy to promote increased adoption and upgrades.

Optimizing customer retention to increase revenue

Just as a successful football team needs both a robust defense and a dynamic offense to secure victory, a thriving business needs to measure, analyze, and act on insights from both GRR and NRR metrics to prevent churn and increase revenue growth. When applied together, these metrics provide a complete picture of how well your retention and growth strategies work and where you need to make adjustments.

Recurring revenue is a rhythm — not one note. It’s a commitment to continuous improvement and innovation, led by the customers you’ve got. So, they meet their goals, and you meet yours.

Learn how Totango can help your business put revenue on repeat.

The post Gross retention vs. net retention: What’s the difference? appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

We aligned our visual identity with the company we’ve become and what we strive to deliver to our customers. In the last year, we merged two of the leading customer success players. Then, we accelerated our innovation by announcing Unison, our new AI-powered customer intelligence engine, made possible by an acquisition that augmented our team and tech stack. 

It’s with this expanded product portfolio, a unified company, and a doubled-down focus on customer-led growth (CLG) that we reintroduce you to Totango: now squarely positioned to empower businesses in achieving customer success and revenue growth.

Why now? The strategic vision behind the Totango rebrand

This rebrand was not just a change of style—it’s a signal of purpose. Here’s why the timing made sense.

A unified vision to reflect our unified company

The merger with Catalyst and the acquisition of Parative AI in 2024 gave Totango a fresh perspective on the evolution of customer success and the pivotal role AI plays in helping enterprise teams uncover and act on customer intelligence to fuel growth. With new team members, and advanced data and technology, we took the opportunity to reflect and refine our guiding principle: customer-led growth. That means we spent the last year deeply listening to our customers to ensure we deliver on the promise we made, while also focusing on the future to ensure our innovations keep up with their needs. 

Expanded product portfolio focused on revenue

As we wrapped up 2024, we gave customers a look at our refreshed, multi-product roadmap: Totango, our enterprise customer success platform, Unison, our AI-powered churn intelligence engine, and Catalyst all received updates to features and user experience, with the new brand design continuing to be updated across the product with successive product releases. Unifying under the Totango company name and brand gave us a framework to support our multi-product platform strategy. Our brand strategy was designed to showcase a sophisticated product suite and customer-led growth methodology for enterprise buyers. 

Belief in why customer-led growth is the answer

Shout out to the Catalyst founding team for beating the drum for customer-ked growth (CLG) and sparking that conversation across the CS community and GTM space a couple years ago. Leading CS leaders took note. Now it’s a focus of GTM teams across the board. The ZIRP days are no more — companies across industries have been hit with increased churn, layoffs, consolidation of tech stacks, expense management, and an all-out push to be profitable and grow — so there’s a greater need to turn up the volume on CLG. The good news is that today, more businesses and boards understand how business-critical it is to have a strategy and system for managing your customer base with the sole purpose of getting them to hit their goals. Value is success is revenue. (Start here if you want to learn about navigating the shift to customer-led growth, then stay tuned … we’re going to keep talking about this.)

What’s brand new? A closer look at the Totango visual identity

While a rebrand reflects all the strategic changes under the surface, most people gravitate to the new logo and visual design on a company website because it’s tangible. We were fortunate to work with Bill Kenney and the expert team at Focus Lab, an agency that specializes in building outstanding B2B brands. So, let’s dive in and break down the creative choices we made along the way.

A fresh design for a revitalized brand

Our new visual language embraces type, photography, color, and line work. For the first time in years, we’ve used photography: vivid images that capture everyday leaders, energetic workspaces, and “Modern Horizons” showcasing landmarks and city skylines where our employees and customers live and work. 

We chose Staff and Cambon (shout-out to the serif fans!) font families to add a touch of sophistication to the traditional sans-serif websites that have become so common in SaaS. And, for special cases, we use Staff Wide in dynamic layouts to add visual interest through typography alone.

Overall, we wanted to elevate the brand design to reflect the enterprise organizations and global businesses we serve today. That’s why we chose a rich color palette, with plum, evergreen, baseline, and echo blue. But, we also wanted to retain some shade of green, the signature color that had become associated with Totango since our founder wrote about the importance of farming your customer base. Enter, surge: a vibrant green for our bold next chapter. (In fact, when we previewed the new brand identity with our Customer Advisory Board, one executive said he was glad to see we kept some green!)

It takes two to tango

The updated logo reinforces innovation and momentum, while clarifying that we support enterprise businesses and revenue leaders. The logotype also gives us the opportunity to use a monogram “TT” in our favicon, social avatars, and stylized shorthand. Our Totango team gravitated toward the bold angles of our signature TT because of what it represents: customer success leaders being elevated to have a seat at the executive table; pre- and post-sale revenue leaders collaborating to provide a cohesive customer experience; the relationship between a business and its customers; our employees working together —  it takes two to tango.

What this means for customers and the CS community

This transformation isn’t just about us — it’s also about you, our customers and the broader CS and post-sale community. 

For our customers, this moment signifies Totango’s unwavering commitment to empowering every aspect of customer success and enabling the post-sale organization to deliver recurring value to your customers. Which, in turn, fuels growth for your business.

For the larger customer success community, the rebrand reinforces Totango’s leadership in the enterprise CS space. And our commitment to leading the conversation on the shifts we’ve all seen taking place: Customer-led growth is the most efficient, sustainable path to growth. Together, we are setting a new industry standard for CS and what’s possible in delivering exceptional results when you deliver on your promise of helping customers achieve their goals.

A peek at what’s ahead

This rebrand is just the first note of a rhythm we intend to move to for a long time. Over the next few months, Totango will be launching:

• Advanced AI-powered solutions: To deliver deeper insights and more targeted automation, revolutionizing how customer success teams approach retention and expansion. 
• Expanded integrations: Seamlessly connecting Totango products with even more tools in your tech stack for smoother workflows. 
• Customer-led growth playbooks: Actionable frameworks, templates, and guidance that make operationalizing CLG in your company faster and easier. 

We’ll also be hosting webinars, virtual meet-ups, and attending various events to ensure every customer success and revenue leader stays in tune on how critical customer-led growth is in today’s market. We hope you’ll join us along the way!

Cheers to a bold new chapter of embracing change and customer-led growth, so we can all deliver revenue on repeat. 

Learn how Totango can help your business put revenue on repeat.

The post Totango brand transformation: A new chapter in customer-led growth appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

This article illustrates how large enterprises can modernize customer health scores for growth. Learn how to: 

• Measure and act on health scores in dynamic environments.
• Optimize outcomes for diverse customer bases. 
• Use advanced platforms to simplify even the most complicated relationships.

Why customer health is vital for enterprise growth

Enterprise B2B organizations often face a daunting challenge — how to maintain strong relationships when managing thousands of customers across multiple verticals, regions, and use cases. Whether it’s a global Fortune 500 company or an established powerhouse with niche offerings, the stakes for customer retention are high. Even a slight uptick in churn can result in significant revenue loss.

A robust customer health model offers a solution. It provides a consolidated view of where customer relationships stand, helping enterprises address risks, empower account teams, and uncover new opportunities to drive value. But for enterprises with complex customer networks, a basic health score won’t suffice. To succeed, they need a sophisticated, multidimensional approach.

The enterprise solution

Large customer accounts often have layered needs. One team might be fully engaged while another struggles with adoption. A single product champion might push for renewal, while executive decision-makers require additional proof of ROI. Enterprise customer health scores must capture these nuances and deliver actionable insights.

For enterprises, improving customer health requires balancing three core priorities:

1. Address regional or departmental variations in customer engagement.
2. Navigate complex purchase decisions influenced by multiple stakeholders.
3. Maintain predictable retention metrics while identifying cross-sell or upsell opportunities.

Building a health model tailored for complex customer ecosystems

An enterprise customer health score goes beyond tracking a single data point. It integrates various metrics and dimensions into a unified framework that reflects the intricacies of your enterprise clients. Here are five key areas enterprises should focus on to build an effective, multidimensional customer health model:

1. Account-level segmentation

Enterprise customers rarely behave as a single entity. Different business units may have distinct levels of engagement, adoption, or satisfaction. Segment your health tracking at the account level, so you can evaluate performance across different units individually, while keeping an overall view of the account in sight.

For instance, one subsidiary may meet 90% of its usage targets, while another struggles to adopt the product. Segmenting ensures you can focus resources where they’re most needed, without risking the larger relationship.

2. Stakeholder mapping

Enterprises have numerous or complex hierarchies. Your health model should account for the perspectives of various stakeholders: end users, department leads, and executive sponsors. Analyze factors such as:

• Executive satisfaction gauged through metrics like executive business reviews (EBRs)
• User engagement trends, drawn from platform utilization or feedback
• Decision-maker alignment, which ensures the voices that drive purchasing decisions advocate for your product

Communicate the right metrics to the right stakeholders, so you can maintain alignment and long-term trust.

3. Advanced usage tracking

For complex customers, aggregate usage data won’t cut it. Enterprises need granular visibility into:

• Feature-level adoption to understand what’s driving results
• License utilization tracking, pinpointing areas of underuse or over-provisioning
• Regional and departmental consumption, identifying teams that need further onboarding or support

Advanced analytics platforms allow you to customize dashboards for specific customer segments, ensuring these insights are easily accessible and actionable.

4. Dynamic, multidimensional health scores

A dynamic health score accounts for multiple inputs: adoption patterns, financial health, sentiment data, and ROI realization. For enterprise organizations, moving beyond a linear model to a multidimensional system enables improved forecasting and risk analysis.

Imagine a global client scored across four key pillars, weighted by their relevance:

• Engagement metrics, reflecting day-to-day activity
• Business outcomes, tying their achievements directly to your solutions
• Relationship risk, incorporating payment statuses and executive sentiment
• Strategic alignment, analyzing future growth potential and product fit

Multidimensional scores provide the flexibility and depth needed to manage customers with varied requirements. It enables you to tailor the weighting of health dimensions based on factors such as your business priorities, customer segments, journey stages, support packages, and more, delivering more accurate and reliable health scores.

5. AI-powered insights and early warning systems

A core advantage of health scores is their ability to function as an early warning system. For enterprises, where the loss of a single high-value client can be devastating, this is essential. Monitor red flags that could signify trouble, such as sharp declines in engagement, overdue renewals, or stalled onboarding processes. 

Today, rapid innovation in AI means that large companies can augment, or even replace, their health scores with AI-powered churn intelligence that provides real-time insights based on changes across customer engagement data. Multidimensional health scores depend on human judgment on inputs and weighting, where AI scoring models can rapidly sift through vast amounts of engagement data and sentiment, or your historical customer data, to identify risks months ahead of renewal. 

The role of automation and customer success platforms

Managing customer health at an enterprise scale is nearly impossible without automated tools. Sophisticated customer success platforms, like Totango, are designed to simplify the nuances of enterprise relationships with features such as:

• Customizable health scores to suit individual customers across diverse regions or industries
• Automated workflows that trigger alerts when health scores dip below critical thresholds
• Comprehensive dashboards for executives, consolidating account health across verticals into one actionable view

Given heavy enterprise requirements for actionable insights, a customer success platform is a critical part of the tech stack to optimize cross-functional collaboration, ensuring that sales, support, and customer success teams are aligned on priorities.

Actionable steps to improve enterprise customer health

To manage complex customer relationships, prioritize these actionable strategies:

1. Map out diverse journeys: Understand how different departments or regions engage with your product and tailor your outreach accordingly.
2. Invest in stakeholder alignment: Regular meetings with key decision-makers ensure mutual understanding of goals and expectations.
3. Leverage predictive analytics: Use technology to forecast risks before they escalate.
4. Focus on value realization: Track how you deliver measurable success for individual customers, addressing gaps in real time.
5. Automate to accelerate: Free up your resources by relying on automated action triggers, health scoring, and performance tracking.

Set your company on a path to success

Enterprise customer health is too complex to depend on static data points or reactive responses. To drive long-term retention and growth, invest in a future-ready customer success strategy that simplifies complexity, energizes client engagement, and unlocks opportunities for deeper collaboration.

Now is the moment to empower your team with the tools needed to centralize data, uncover actionable insights, and set new expectations. Start using customer health scores with the clarity and precision only a purpose-built and AI-powered success platform can provide.

Recurring revenue is a rhythm — not one note. It’s a commitment to continuous improvement and innovation, led by the customers you’ve got. So, they meet their goals, and you meet yours.

Learn how Totango can help your business put revenue on repeat.

The post Mastering customer health for complex enterprise relationships appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

Keith Frankel’s hot takes:

• Address the elephants: Don’t shy away from uncomfortable conversations and tackle culture divides head-on to foster healing and alignment.
• Enforce new behaviors: Implement consistent processes across teams, and remember, that behavior becomes personality over time.
• Lead with conviction: Don’t be afraid to ruffle feathers, and focus on driving measurable outcomes to earn your stripes.

Calling all leaders working through the challenges, realities, and emotions of bringing teams, products, and cultures together. Totango’s Chief Product Officer, Keith Frankel, shared his unfiltered and real-world insights on how he and the Totango leadership team tackled these challenges. They created an organization built on a shared vision and culture while acknowledging and progressing through existing challenges. 

Acknowledge the divides

Every person knows when there’s an elephant in the room, and everyone is allergic to it. To advance cultural divides and address them openly and timely is crucial to moving everyone forward together. If you think divides aren’t going to happen, then you’re probably out of tune with your team and the cultural vibes in your organization. Here are three actions leaders can take to draw the elephants out of the room:

• Blend teams across regions: This encourages teams to cross-pollinate ideas, fostering unity and common ground.
• Eliminate team names: Remove old team names and create new names that create consolidated and shared identities.
• Establish a new operational cadence: Now is the time to set a new precedent, and new operations unify the combined organization and help ensure everyone moves in sync.

Create new norms

Behavior becomes personality over time; now is the time to set the tune that you, the leadership team, and the organization want to sing to in the future. In Keith’s first weeks, he had the meeting with the now-combined product and engineering teams, which was the “we’re not leaving this until you’ve all hashed out your problems with each other,” meeting. Yes, it was stark, but it was also cathartic. And, it set the precedent for the team moving forward that this was an organization where each individual was responsible for identifying, sharing, and working to resolve conflict. Totango, as an organization, is more than a category leader in customer success software, it’s a place where conflict is appreciated but resolved openly with purpose and in action. Being candid is one of the 5 company values, which means team members are supported to speak openly, truthfully and kindly even when it’s a touch conversation.

Speaking from experience, Keith shared that he does not come by “change” naturally. Growing up, he was actually adverse to change and conflict. But, personal experiences and willingness to take change head on overtime, built a resilience that he is committed to engrain in his team and the Totango culture.

Make decisions with convictions

Focus on outcomes and driving genuine results. It’s vital for earning credibility with employees and with customers. For leaders in general, but specifically leading in M&A situations, it’s essential to prioritize result-driven strategies that demonstrate tangible benefits and progress.

“I’m here to put this [ product ] on the path to get an outcome. That’s what I care about,” said Keith. Not everyone in the organization is going to like every decision that comes with that responsibility. It will involve trade-offs, it will require re-tooling, it will prescribe new precedent. But, if you orient changes and behaviors to outcomes, then the what and the why are clear.  

“I care about outcomes. I’m happy to have no process if our outcomes are incredible. It’s all about outcomes.” said Keith. And, that’s when you know if the process is in service or in hindrance of your team’s goal.

Master, don’t just move, through change

The reality is that any successful merger or acquisition lies in outcomes. Addressing cultural divides head-on, implementing strategic integration techniques, and focusing on the defined goal are non-negotiable. It’s not done by making easy decisions. Leaders are responsible for shaping a shared vision, one that restates the combined organization’s purpose and accepts nothing less than unified commitment in terms of values, norms and results.

Totango believes that recurring revenue is a rhythm — not one note. It’s a commitment to continuous improvement and innovation, led by the customers you’ve got. So, they meet their goals, and you meet yours.

Learn how Totango can help your business put revenue on repeat.

The post 3 Effective strategies for leaders to achieve clarity and unity during a merger appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

• It’s time to take action. Big or small, it’s time to put AI-enabled actions into workflows and empower individuals to learn with these new tools.
• Measure outcomes from AI-driven enhancements. To gain traction, leaders must translate how improvements or efficiencies gained from implementing AI solutions result in either more revenue in the door or less costs out the door. 
• Make it about customer value. It may not be right now, but it’s time to start the discovery process on how AI-powered tools can help you better understand the entire customer relationship so optimizations translate to long-term value and business growth.

Our team recently attended Technology Services Industry Association (TSIA) World ENVISION conference in Las Vegas, and without surprise, AI was the hot topic throughout the event. However, a major theme from the event was somewhat unexpected.

While there’s overwhelming agreement that AI will increase operational efficiency and accelerate time-to-value in the customer lifecycle, to get there, companies are realizing that they have to start from a stable foundation, making sure the basics of the customer journey and go-to-market (GTM) motion are solid. This could mean: simplifying the customer journey; clarifying roles to reduce complexity in cross-functional handoffs; aligning team incentives to business goals, and, most importantly, measuring business value at key moments through the customer lifecycle.

Easier said than done, sure. But, with simplicity and increased precision in the basics, companies are recognizing that it’s easier to take action and learn with AI and ultimately reap the gains and spot the areas for improvement. 

Here are three simple ways we learned GTM leaders and teams are taking a step forward with AI today:

• Taking action where there’s opportunity
• Drawing the line to financial outcomes
• Creating space for experimentation

#1: Take action where you can

“AI needs to have action.” A sentiment that was heard over and over again on the conference floor.

The irony (that many of us have forgotten) is for AI to make an impact, we have to do something with it; we have to experiment, train models, spot inconsistencies, and continually tweak it to fit our business needs.

Unfortunately, we, as an industry, have made AI feel like a mountain to climb versus a path to navigate. There are ample ways teams and organizations can get started on their AI journey today, but it begins with taking action; that uncomfortable first step forward to learning and experimenting with something new. 

Here are a few ways we learned organizations are taking a step forward with AI to start turning action into learnings: 

1. Leveraging content and creative tools to create assets more quickly and effectively. A great example of this is using content and creative tools to help build and version sales materials, from emails to presentations, in order to save valuable time and shift priorities to human relationships and outreach. At Totango, we’ve experimented with content generators like Jasper to take existing content like event abstracts and webinar summaries and turn them into social posts or follow-up emails. We agree that this is an approachable way to start getting comfortable and gain learnings with AI. 
2. Integrate AI tools into current platforms to streamline existing workflows. It can be daunting to reimagine entire workflows with AI in the mainstream of day-to-day operations. On the flip side, it might be quite easy to identify individual activities where significant manual processes could be reduced. A great example we heard involves leveraging AI integration to summarize customer support case notes and automatically document them in a servicing platform. This approach has resulted in significant time savings for customer support agents, reducing the need to re-explain or take additional notes.
3. Take an individual approach to experimenting. If company, function, or even team-wide initiatives are out-of-scope, taking an individualized approach can still put ideation into action. This might be popular language models like ChatGPT or Anthropic’s Claude, or it might be a niche tool for a workflow based on function specifics. Either way, creating space for individuals to experiment (and here’s the real win) to share their learnings with a wider group within the organization will start to build learnings faster than you might think. Leaders can even get creative and work AI-focused experimentation into individual learning plans or goals. 

#2: Draw the line to financial outcomes

Studies show AI can lead to 25% faster output and 40% higher quality. But those are just the inputs to helping team members, like account managers and customer success managers (CSMs), work more quickly and save time. 

The next part of the equation is showing what happens next. 

• Did AMs or CSMs use the time saved to have more strategic conversations with customers?
• Did the time saved transfer to more time sharing feedback and insights with product teams?
• Did the faster communications translate to earlier identification of expansion or growth opportunities? 

Executives are expecting AI to improve bottom-line efficiencies and increase top-line profitability. Even if it’s not perfect or if you’re using estimates, start to show the trade-offs that are paving that path to new outcomes and new growth. 

#3: Create space to experiment

More likely than not, individuals in our organizations are experimenting with AI within their roles, even if it’s not regularly adopted into greater workflows. Rather than fighting against the tide, leaders can make the call to bring it out of the shadows and learn from it. 

One company shared the precedent of being “customer zero,” meaning before they take anything AI-related to market, they focus on driving adoption and results internally. 

Even if it isn’t company-wide, think about internal clubs or learning groups that people could self-select to participate in to share and be curious about AI and new tools. This not only creates a sense of ownability and responsibility, but it can act as a tight feedback loop to make the product or feature better. It also helps surface use cases and workflows across the organization where new tools can add value.

Start setting your team up for AI success

While talking about the potential of AI is important, since we are all just beginning to understand and navigate opportunities we don’t have the luxury of just “talk.” At some point (we argue now), we also have to “walk.”

Even if it’s individual steps with trials and errors, it’s imperative that we, as leaders and innovative businesses, start using AI. We need to start making the connections between the impact of efficiency on new outcomes and overall business goals. One foot in front of the other, and that mountain quickly becomes a hill, which becomes a path.

Learn more about how Totango is building an AI-powered engine to help improve churn and growth intelligence for growing enterprises.

The post 3 tips for revenue leaders to take the next step with AI: Insights from TSIA World ENVISION appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

The Evolution of Customer Success and Post-Sales

Gone are the days when customer success was merely about putting out fires. Today, it’s about lighting the path to growth. As digital transformation redefines traditional roles, customer success has become a pivotal player in revenue generation. Despite their critical roles, customer success teams face the daunting task of managing vast data from customer interactions. Extracting actionable insights from this sea of information is often cumbersome. 

Introducing the Game-Changer: Totango Unison

Meet Unison, a groundbreaking AI-driven solution designed to revolutionize data management while empowering teams to anticipate customer needs and cultivate deeper relationships. Whether integrated with existing customer success platforms or used independently, Unison excels in Churn Intelligence, unifying customer data to accurately predict churn and uncover expansion opportunities. This enables customer success and revenue leaders to make informed, strategic decisions that safeguard and enhance revenue streams.

The Unique Advantage of Unison

Unison offers a standard AI model for quick deployment and a custom model for enterprises seeking precise risk predictions built on their historical data. These models, tailored to each business’s unique data, distinguish Unison by providing unparalleled accuracy in identifying customer risks well ahead of renewal times. This foresight transforms customer success strategies from reactive to proactive, ensuring sustainable business growth.

Real-World Impact

Imagine a customer success team using Unison to analyze engagement metrics and identify dissatisfied customers early. With targeted interventions, they significantly reduce churn. Now, consider a global enterprise leveraging Unison’s custom model to get well ahead of churn risk, and discover new growth opportunities within their customer base, driving upsells and cross-sells while achieving measurable growth. Executives can forecast revenue with more confidence than ever, thanks to these insights.

“The ability to look at all actions through the lens of revenue is paramount. If my team is able to stay ahead of churn pitfalls that were previously unpredictable, that’s a win and puts a clearer lens on the opportunities to protect and grow customer revenue,” said Conor Nolen, Chief Customer Officer at Drata.

The Future of Customer Success with AI

As AI becomes essential to customer success, businesses can shift their focus from manual data analysis to strategic initiatives. To explore the transformative impact of AI, watch our recent webinar featuring Totango’s Chief Product Officer, Keith Frankel, and co-CEO, Alistair Rennie. They delve into AI’s future in customer success, highlighting how leveraging customer data and AI can help enterprises more accurately predict churn, identify growth opportunities, and swiftly optimize for ideal customer outcomes.

Conclusion

Totango Unison represents a significant leap in customer success and post-sales roles. It not only addresses the challenges of data management and churn prediction, but also provides a roadmap to sustainable growth. For those ready to embrace AI, Unison offers a clear path to redefine success in the digital era. Join the movement and see how Unison can transform your business.

The post Driving customer success forward with Unison appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

• 97% of corporate leaders believe customer expansion is the key to driving revenue growth in their organization. 
• But many organizations focus too inward—on internal operational tactics, rather than prioritizing the customer outcomes that drive customer-led growth.
• To drive customer-led growth, organizations need to assign ownership for expansion, align tactics to value drivers, measure post-sales funnels precisely, streamline communication post-sale, and use automation to create more clarity for teams.

For years, attainment was the sexiest word in SaaS. 

With seemingly never-ending growth capital, organizational leaders focused almost exclusively on getting new customers—retention, upsell, and expansion would be handled by Customer Success.

But then the ground shifted from underneath. 

The once endless capital dried up and more scrutiny came into deals; CFOs began asking why, for what value and how quickly, at the same time putting more accountability on CTOs for the efficacy of the tech stack. According to GTM Partners, 72% of companies experienced longer sales cycles in 2023.

Thus a new mantra came through: how can we be consolidated into, rather than away from? 

The answer is customer-led growth.

We are living in a customer-led world

When we spoke to industry leaders, a whopping 97% of them believed expansion is critical to driving revenue growth in their organization. 

We wholeheartedly agree.

The problem arises when you get to the “how” of customer expansion: 63% want a more strategic approach to expansion targeting, 40% are adding uplift into contracts at renewal, 32% are adding more SKUs, and 18% are collecting usage-based overages more frequently. 

Notice a trend? All of these tactics are about the company versus the customer. 

Pro tip: 72% of revenue comes from retention, expansion, upsell, and cross sell

To truly take advantage of the 72% of revenue that sits on the other side of a signed contract, we need to shift this mindset to make our expansion motion about our customer. 

5 actions to become a leader in customer-led growth

1. Assign ownership for expansion success

You need someone who is accountable (and compensated) for expansion success. They need to go to bed at night and wake up in the morning thinking about it. 

This person should also collaborate cross-functionally, building what I call a “Tiger Team”: 

• Partner with marketing to plan customer campaigns and proactively marketing the value your platform offers to new prospects. 
• Partner with sales and CS to include customer outcomes and desires as part of qualification and closing, to ensure a smooth handoff that enables great onboarding. 
• Partner with product to understand how customer usage tracks to valued outcomes and how customer needs impact roadmap decisions and commercialization strategy. 

2. Align expansion tactics to customer value drivers

News flash: usage is not value. 

It is not uncommon that in many instances people are using products and not seeing value from it. They could absolutely love the product, but still churn because they cannot measure or demonstrate the value it brings to them. 

When you plan for expansion, all levers need to be aligned to what the customer deems value: 

• Are customer outcomes clear and documented in onboarding? 
• How do platform metrics help tell the outcome and value story?
• Are you starting quarterly milestones with outcome stories? 
• Do you keep a “regular pulse” on the business to ensure the goals at purchase are still relevant?

The good news is that you can have this motion ready, if you’re building business cases as part of the sales motion and carrying them through as guideposts from onboarding to post-sale. 

When you take this outcomes approach, you’re naturally nudging a customer toward expansion through helping them achieve their goals.

3. Measure post-sales funnels with pre-sales precision

In sales, we measure lead volumes, segments, per rep attainment, and more. But who is applying that same level of measurement to the post-sale funnel? Do you know the percent of customers that make it successfully through onboarding? What customers are deploying additional use cases on their own? What is the expected definition for successful implementation? We should use this same level of precision with post-sale funnels. 

Why? Because it helps you avoid wasted effort and find opportunities to improve your conversion at each step of the post-sale funnel. 

For example, our data found that almost 10% of customers don’t even make it through onboarding and 30% cumulatively don’t make it past implementation into regular usage. If that’s the case in your company, you should be working to improve those processes before you spend any effort trying to upsell those customers.

At the bottom of the funnel—representing around half of your customer base, on average—are the people who love your platform and are getting value from it. 

If you can measure every step in the funnel, you can figure out what these proportions are for your company, giving you a guide to the segments that are ready for expansion.

4. Tighten feedback loops on post-sale teams 

The post-sale world is filled with multiple users, stakeholders, and goals. 

To avoid this complexity becoming unruly, tighten feedback loops on post-sale teams—make sure documentation is concise and everyone coalesces around customer outcome. When you have that focus (and the data to back it up), you can have more informed conversations about actions and problem solving.

You have to build more of a journey, not just a set of tactics or initiatives. This is also where automation helps—see the next tip.

5. Automate to drive value

Your team is already asked to do more than they possibly could. Automate to save time and increase their capacity—so they can focus on all the other tasks that are getting pushed aside currently. 

Things we think are great for automation: 

• Data capture
• Ruting right tasks to right people
• Enabling CS teams to have value-driven conversations
• Customer sentiment analysis and activity capture
• Usage reporting
• Billing and account admin 

All of these tasks need to be done, but are either routine or low-value. Let technology handle them so your post-sales team can focus on the hard stuff. 

Go with your customer on the journey

Becoming customer-led doesn’t mean you forgo your core mission or product vision in favor of every custom request.

After all, your customer isn’t just buying your solution; they are buying your expertise with other customers in similar situations, as my colleague Karen Budell, CMO, eloquently explained on the Pipeline Visionaries podcast.

The key is to collaborate with your customer.

Talk about their overall needs and the reason they sought your solution. For things your product can do today, mutually come up with a plan—including the required inputs on the customer side—to make it happen. For anything your product can’t do, think about how it might fit either into the roadmap or how you can solve the problem via content, partnerships, or strategic referrals.

When you have this collaboration at the core, you unlock the sustainable growth that not only CFOs are after, but that drive sticky customer behavior—and revenue attainment.

The post The 5 actions for revenue leaders to embrace customer-led growth appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

• Sales leaders should ask potential customers about the outcome they need to achieve to be successful.
• Starting with an outcome focus makes it easier for sales leads to kick off an entire customer lifecycle, rather than just a quick handoff. 
• An outcome-first approach is the foundation of a customer-led growth motion, where new logos are seeded with the potential for retention, upsell, and expansion.

After 15+ years as a marketing leader with revenue ownership, Karen Budell understands how marketing and sales work together.

But as Chief Marketing Officer of Totango, she’s also focused on driving revenue from existing customers, not just new logos—something sales leaders haven’t been tasked with before.

In a recent episode of the Pipeline Visionaries podcast, Karen shared her one wish for sales leaders as every business aims toward sustainable, repeatable growth motions.

This blog shares a few key takeaways. Listen to the entire episode for all of Karen’s comments and tips.

Begin with the customer’s outcome in mind

Sales teams are great at identifying needs and pains—then turning that into a conversation about why your solution is great for them. 

Keep doing this, said Karen, but also remember to clarify the customer’s desired outcomes. 

“[Start] those conversations with your prospect about, ‘What is the outcome that they’re trying to achieve?’” said Karen.

This stems from the fact that companies succeed long-term when they continually deliver value to customers, rather than continually chase new logos and ignore existing customers. And the way to do that is to figure out what they actually want to achieve, then help them do it with your platform or solution. 

Kick off a lifecycle, not just a hand-off

When the whole company is aligned around customer outcomes and ROI, another element changes: the sales-to-customer success handoff. 

“As you close the deal and make that handoff to your customer success and post-sale team, everyone’s goal should be making sure you’re delivering value to your customers on a recurring basis,” said Karen. 

When customer success (CS) has a customer’s core goal in mind, they can act as strategic advisors and champions for the outcome, rather than booking meetings to talk about inputs or if someone is “happy” with the platform. 

This data in aggregate also provides valuable insights to marketing and sales alike—marketing can use it for both customer campaigns and new lead campaigns. Similarly, sales leaders are able to pre-qualify customers more quickly by understanding the outcomes they need and what your platform is able to deliver. 

When that machine starts humming along, you can more easily identify upsell, cross-sell, and expansion opportunities. That’s the core of building a customer-led growth engine that really begins to drive recurring/ongoing revenue.

“You want them to win—having your customers achieve success is your success,” said Karen. 

It’s all relationships

The thought of asking sales for a favor might send chills down your spine.

As the team responsible for new-logo revenue, many don’t want to get in their way.

But first, it’s important to realize that CS is directly responsible for an increasing amount of revenue. Not only do 83% of CS teams have retention quotas, but 68% have expansion quotas as well. Your team is a revenue team.

And second, Karen’s advice is to prioritize the human in the room. Their title might be VP of Sales (or similar), but they are also a person—talk to them as a peer, get to know them as a human, and then think about any ask you have of them. 

Listen to Karen’s full interview on Pipeline Visionaries here.

The post The one question sales leaders should ask every prospect appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

• The buying cycle is more complex than ever, with increased scrutiny from finance.
• Every business needs a customer-led growth motion to stay in business for the long term.
• Go-to-market teams need to prioritize customer ROI as the driver of decision-making, metrics tracking, and relationship management. 

Account executives can’t sell like it’s 2017 anymore. 

Buyers are more educated, and the buying process is more complex than it once was. 

In the past, you might be able to convince a single decision-maker and sell a relatively large deal. Now, you have to win over a lot more stakeholders to get the next logo, and it’s not unlikely that you might lose for reasons outside your control.

So, what’s a go-to-market (GTM) team to do? 

In a recent episode of The Jasons take on, Totango co-CEO Edward Chiu explained more about what GTM teams get wrong—and what they can do to fix it.

A dated focus

For years, getting to “product-market fit” was the holy grail. Hit that, and you aren’t even really selling, you’re simply fielding contracts. 

But then changes in the economy and competitive landscape ended with a decree from finance: cut software spend. 

“[Software] is the first line item for CFOs and finance executives to trim costs, because the next one is layoffs or human capital costs,” Edward said. 

Now, the buying cycle is a lot more complex:

• The decision maker and core users need to be bought in.
• The primary users’ day-to-day counterparts (e.g. Marketing if selling to sales, or vice versa) want to be prepped and demo’ed to see if the solution can help them as well.
• CFOs need to see how the tool reports on the value it creates, in order to justify the budget line item. 

The complexity means that quota attainment is getting harder. And that’s if sales reps are even still able to do it—over 60% of account executives are not hitting quota. The reality is companies need customer-led growth, not new-logo-led growth, to ride out economic ebbs and flows successfully and stay in business for the long term.

“This is a crazy world we live in where everything is viewed in a very, very tiny microscope before anything gets purchased,” said Edward. “This is where customer-led growth comes in.”

The customer-led growth ROI paradigm

Is your solution getting your customer champion promoted? 

That’s the new paradigm question, because answering it requires three elements that directly tie to the ROI a customer gets from your platform.

This includes: 

• Understanding the customer’s desired outcomes. 
• Delivering those desired outcomes directly or via proxy with your platform or software. 
• Illustrating and communicating value in a way that clearly shows how your tool helps drive those desired outcomes. 

“Your job as a CSM is to help your customers leverage your tool to the maximum capabilities to create ROI for them, to get them promoted,” said Edward. 

Internally, this also requires collaboration between sales, marketing, customer success, and product teams to understand what outcomes customers want to achieve, what solutions can be offered, and how to position the product value to reach customers in your ICP. 

This is also where automation can be valuable, since handling dozens of customers—each with multiple internal stakeholders—creates an almost impossible task when done manually. 

“The idea of creating automatic touch points that look at sentiment, product adoption, different attributes of your customers, a customer lifecycle, and knowing how to proactively reach out to those customers—that’s where tooling really, really helps,” said Edward.

Everyone impacts revenue

Adopting an ROI focus versus a health score focus is not just about making CS’ lives easier—it’s also a rallying cry for the organization.

When the company is focused on customer ROI, Marketing can develop campaigns around that ROI, and sales can qualify prospects based on their need for that return. Similarly, products can rally efforts and innovation around features that will drive ROI rather than solely weighing roadmaps based on internal or custom requests.

A focus on ROI is also the only way to scale customer-led growth—customers grow with you when you provide their desired outcomes. Anything else is just trying to measure sentiment along the way.

“For revenue leaders… I bet there’s a little bit of fear in you and going on the company stage and just being bold, calling people out and saying, ‘Hey, you have an equity stake in this organization. You have an opportunity to help this entire business create that revenue opportunity.’” said Edward.

Listen to the entire Jason’s Take On episode with Edward here.

The post The one thing SaaS go-to-market teams keep getting wrong (and how to fix it) appeared first on Best Customer Success Blog: Articles for Enterprise Growth.

Customer success operations (CS Ops) can be the “wizard” behind the scenes of your customer-centric strategy. 

But making it work demands a balancing act of two core things: supporting customer outcomes and empowering the internal CS team with business-critical insights. In particular, you need to arm your customer success team with razor-sharp processes and cutting-edge tools that optimize long-term customer value  throughout the post-sales journey.

Customer success operations can also be a secret weapon for fine-tuning a variety of customer success and GTM needs such as: sharpening the ideal customer profile (ICP), crafting unique marketing messages, and injecting the customer’s voice into every interaction. 

To pull this triple-win maneuver off, you need actionable customer data and a robust customer success platform (CSP).

As a leader in customer success operations and a CSP implementation veteran, I was thrilled to join Matthew Lind and Jean Nairon on a recent episode of their Spotlight on Customer Success Operations webinar series to share the many tips, tricks, and wand-like strategies I’ve picked up throughout my CS career. We dove into:

• The essential ingredients needed for an effective CS operations framework
• How to build a data-driven CS operations motion from the ground up
• The exciting advancements on the horizon to advance customer success value as a whole  

Check out the highlights below and be sure to watch our full discussion for a quick masterclass on creating a sharp customer success operations discipline. 

The secret potion: Key ingredients for an effective customer success operations function 

Driving customer success isn’t about grand gestures – it’s about helping customers achieve valuable outcomes. While there are many moving parts, these four elements are non-negotiable ways a CS operations motion can amplify the total customer success program:

1. Customer segmentation: Providing ancillary data to understand who your customers are and confirming, realigning, or challenging the segmentation to craft tailored strategies for different customer types.
2. Risk management: Developing a risk program to identify and mitigate potential churn.
3. Voice of the customer: Supporting or implementing a program to gather and act on customer feedback.
4. Stakeholder engagement: Being a congruent partner to engage with stakeholders to align on goals and progress.

“There are so many pieces to the pie when you look at the evolution of the customer journey from the first year and beyond that you want to make sure you’re putting all of those things in place to lead to the overall success of the customer.”

Segment, analyze, conquer: Building your operations magic box

The foundation of any effective customer success operations program is understanding your customers, so I recommend beginning with customer segmentation. This isn’t the sole responsibility of the CS operations leader, but it is a significant place where an operations program can augment or amplify the total customer success program. 

Here are a few questions, for example, that you should be able to answer:

• Do you have segments?
• Can you segment customers by contract value?
• Is there likeness between industries?
• What data is available for each segment?

The most important first step is to start gathering this data—if you don’t have it, you can’t fix it. 

Once you’re able to segment customers with value, then you can focus on gathering churn data. This information is the first step toward addressing retention challenges, and an opportunity for the CS operations function to support long-term customer value. Ask these critical questions:

• Is value realization an issue?
• Are business changes driving churn?
• Is our product meeting expectations?

For most companies I’ve worked with, building a customer success operations motion from the ground up is a reality. While this may feel daunting, a collection of sharp tools and processes built around a data-driven architecture can help you create a robust program with two key goals: first, help customers achieve their outcomes. And second, empower internal partners to be the best they can be in supporting your customers. 

Or, simply put, the CS Ops is to CSMs as your CSMs are to customers.

“Just start gathering information so that you can leverage it to take the next step to fixing the problems.”  

The future of customer success: Cost of goods to revenue generation

As companies continue to realize that maintaining and expanding existing customer relationships is more durable than constantly acquiring new ones, we can expect to see more resources and greater strategic focus directed toward post-sale customer experiences. 

Here’s what I predict is on the horizon:  

The evolution of customer success platforms (CSPs): Go-to-market and CS teams are using upwards of 30+ different tools across the business to drive outcomes. Advanced platforms will excel in the technical ability to track and accelerate customers to their desired outcomes and metrics. At the same time, they will integrate with functional-specific tools to make use of that data most efficiently. 

The growing influence of CS in defining business strategy: As more companies recognize the value and need to drive expansion to thrive, CS operations will play a major role in both the architecture and on-going efficiency of the customer success practice to execute a customer-led growth motion. Operations will be the ‘magic behind the curtain’ in supporting CSMs and CS leaders with the optimal processes and insights. 

“My prediction is that customer success is going to continue to be more and more important. More companies are going to put time and effort into understanding the value of expansion and maintaining the business.”

Check out the Spotlight on Customer Success Operations webinar for more of my tips for building an effective customer success operations program. Ready to sharpen your CS Ops game? Learn how Totango + Catalyst can help optimize your processes, unlock data-driven insights, and drive more revenue from your customer base.  

The post Spotlight on CS Ops: Supercharging Customer Success with Data-Driven Strategies appeared first on Best Customer Success Blog: Articles for Enterprise Growth.