Customer Value Realization = Market-Leading Net Dollar Retention
Achieving best-in-class Net Dollar Retention (NDR) is the goal of every leading B2B technology enterprise organization. In this quest, companies have tried to make the customer value journey a mission-critical priority in their businesses. But, the reality is that in most B2B organizations, customer value realization is:
- A company wide priority, but not a company wide mindset
- A single point on a customer journey map owned by one department, not an organization-wide strategy for the entire customer lifecycle
- An unclear or undefined notion of what measurable value for a customer actually is
In order to actually achieve best-in-class NDR, a new standard for your customer value journey is required, through which your entire organizational ecosystem can integrate and center on the creation of measurable value for customers.
So, how do you achieve customer value journey nirvana?
At Valuize, we’ve created a proven framework for B2B technology companies seeking a connected and collaborative customer lifecycle that maximizes the creation of measurable value for customers: ValueXperience.
In this article, we breakdown the 6 disciplines that make up the ValueXperience framework and give you the tools to master revenue retention and expansion in your organization.
The ValueXperience Framework
Customer Value Definition & Agreement
Mastery of Customer Value Definition & Agreement enables a vendor to ensure every customer has an agreed Success Plan that contains one or more target Value-based Outcomes (VBO) plus a clear Outcome Delivery Plan (ODP) for each VBO.
Ensuring there is a clear, measurable and agreed definition of value established with every customer is the foundation of driving best-in-class, efficient and scalable revenue retention and expansion.
Ambiguous, subjective, misaligned or, even worse, absent definitions of what value the customer can realize from adoption of your product(s) creates significant risk on your organization’s ability to ensure that the customer will make a decision in favor of renewing and expanding their investment in your product.
That same risk applies when ambiguity and misalignment exists on the definition of how the customer must adopt the product to realize the agreed value.
By mastering this discipline, your organization will remove these risks and create a rock-solid foundation of defined value from which to drive each customer’s lifecycle to success for them and you.
Customer Value Delivery Management
Mastery of Customer Value Delivery Management enables a vendor to execute and govern the Success Plans agreed with each customer.
Simply establishing access to your product for a customer will not enable them to realize the Value-based Outcomes agreed with them in their Success Plan.
In B2B technology, there are a multitude of roles, activities, processes, engagement models and triggers across your organizational ecosystem and the customer’s own organizational ecosystem that must be executed and governed in order to drive progress of the customer towards value realization.
By mastering this discipline, your organization will provide the management and governance required across each stage of the Adoption, Retention and Expansion phases of your customer lifecycle.
Customer Value Verification
Mastery of Customer Value Verification enables a vendor to measure and verify the achievement of every Value-based Outcome in each customer’s Success Plan.
While mastery of the Customer Value Definition and Agreement discipline provides the foundation for “we will achieve…”, mastery of the Customer Value Verification discipline provides the foundation for “we did achieve…”.
As stated earlier, any ambiguity, subjectivity or absence in the customer’s understanding of the value they have realized from their adoption of your product creates material risk to your ability to retain and expand revenue from each customer.
To further mitigate this risk, a vigorous and collaborative approach to measuring and agreeing the actual value realized by the customer from their adoption of your product is crucial.
By mastering this discipline, your organization will be able to execute every customer renewal and expansion opportunity with a verified statement of measurable value upon which the customer can base their investment decision.
Customer Intelligence
Mastery of Customer Intelligence enables a vendor to create a 360 degree view of every customer and produce leading, lagging, predictive and recommendation-based actionable customer insight that supports the achievement of Value-based Outcomes with customers.
The strategic value of data that provides actionable intelligence about your customers is, ironically, immeasurable. Safe to say, a customer lifecycle that is not driven by a cutting-edge approach to customer intelligence will increase risk and decrease opportunity for best-in-class NDR.
In B2B technology companies, this approach must consider multiple data types ranging from core account and contract data through to product telemetry and digital content engagement data.
Access to the right data is one half of the equation. The other half requires a deep understanding of what questions to ask of the data and what actions should be taken based on the possible scenarios highlighted by the insights produced from the questions.
By mastering this discipline, organizational-wide insight into each customer will be established and enable more effective and scalable actions to drive customer adoption towards Value-based Outcome achievement.
Digital Customer Adoption
Mastery of Digital Customer Adoption enables a vendor to design and operationalize
a digital adoption experience around each product that creates efficiency and
scale for the vendor and faster and easier achievement of Value-Based Outcomes
for the customer.
The economics and volumetrics of your customer base will mean a digital-led approach to driving customer value realization is an essential layer to your customer lifecycle strategy. A purely human-led approach will not sufficiently scale across the long-tail of your customer base or enable the profitability your business requires.
A digital adoption experience is also desired by your customers and provides a quicker path to Value-Based Outcome achievement.
A self-sufficient buying experience is now recognized as highly desirable for B2B technology buyers and has been enabled through recent innovations in the Product-led Growth (PLG) domain. That same self-sufficiency is also highly desired by B2B users seeking to be enabled on how to extract value from your product. Product-led Adoption (PLA) is the new frontier.
By mastering this discipline, your organization will be able to operationalize a data-driven orchestrated digital experience focused on enabling all customers to achieve Value-based Outcomes.
Customer Value Economics
Mastery of Customer Value Economics enables a vendor to measure the effectiveness and efficiency of investments made in driving both customer value realization and Net Dollar Retention.
A successful customer lifecycle that creates value for both the customer and the vendor requires financial investments from both sides. Naturally, the return from those investments must sufficiently outweigh the costs for the investments to be justified and continued.
Accurate measurement of the value that each customer realizes from their adoption of your product opens the door for that value to be reconciled with accurate modeling of the investments the customer has made to establish that adoption.
Similarly, accurate modeling of the investments that your organization is making in driving customer value realization opens the door for that cost to be reconciled with the revenue retention and expansion you’re realizing.
By mastering this discipline, your organization will be able to measure the efficiency of how your customer lifecycle is driving Net Dollar Retention and create a common language between your CFO and her peers seeking approval for investments in creating the customer value journey.
Your Guide To ValueXperience
In this whitepaper, discover a powerful framework to unite your organization around an interconnected customer lifecycle that accelerates NDR.
Net Dollar Retention & The Customer Value Journey Are Inextricably Linked
The NDR equation is made up of two vital components; retention and expansion. Therefore, the path to best-in-class Net Dollar Retention requires an unwavering commitment to delivering an optimal customer value journey.
Are your cross-functional teams truly united around your customer value journey? Create an end-to-end value framework with these 8 best practices from 4 industry experts about how to drive a successful lifecycle transformation and master your customer value journey.
Related posts:
How to Create a Prescriptive Customer Success Plan Template [4 Steps]
5 Expert Steps For Building Outcome-Based Customer Success Playbooks
Are Your Outcomes Delivering Value? 4 Steps To Establishing A Superior Value Verification Process
5 Proven Steps To Align Sales & Customer Success Around Value Selling & Success