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Retention, Growth and CX Expectations

by Hank Barnes  |  July 25, 2017  |  3 Comments

In today’s tech markets, with more and more offerings delivered as a service, the focus is increasingly on retention and growth within existing accounts.   And, they are usually used in the same sentence and the responsibility of the same account representative.   Unfortunately, findings from Gartner’s Sales and Service Group, led by Nick Toman, from CEB (Now Gartner), show that we have some problems.

First, while growth is desirable, retention is required.  In the recent #CEBInfluencers day, Brent Adamson (also of CEB (Now Gartner) described it this way, saying sales management’s message is typically, for example, “We’d like you to grow that 11M account to 15M, BUT WHATEVER YOU DO, don’t let it go below 11M.”   Comp plans are often split between retention and growth, with the majority of comp based around retention metrics.

To drive retention and growth, the vast majority of sellers believe that the answer is to go above and beyond in efforts to exceed customer expectations.  They see exceptional service as the key stepping stone toward growth.

And, based on this new data from Nick’s team, they are wrong.  

The data shows that, while great service does support retention, it has no statistically relevant impact on growth.  None.

Source: CEB (Now Gartner)

Source: CEB (Now Gartner)

As I learned this information, it harkened back to discussions that have been going on for years in the Customer Experience community around expectations.  Some believe that exceeding expectations is the key to great customer experience.  Others, and I’m in this camp, believe that delivering on your commitments, while providing an expected level of service, and focusing on the value that customers acheive is sufficient.   This data, I believe, reinforces that view.    Going way above and beyond might be appreciated, but it is not going to return more value to you than just doing what customers expect (and want).

As a note, The whole idea of a different approach to service than exceeding expectations has been explored in a great book that Nick, Rick Delisi and Matt Dixon authored a few years ago, “The Effortless Experience: Conquering the New Battleground for Customer Loyalty.”  The ideas in it still apply and continue to attack conventional wisdom.

But is there an answer–something that you can do with accounts to drive growth without sacrificing retention.  There is.  It is helping customers improve.  How do you do that?   You provide unique perspectives that can help their business be ore efficient or effective.  You provide depth to those perspectives by outlining how those actions can be taken.   And you focus on the impact, the ROI, of those efforts.

The data shows that this improvement focus has the biggest impact on growth in comparison to product success and service, aggressive sales tactics, and confidence in the sales team.   But there is a kicker.  It also has a huge impact on retention, almost the same level of impact as a success and service focus.     So, rather than training teams to focus on exceeding expectations with basic services, reorient them to focus on helping customers improve.  While that my also exceed their expectations, it will do so in a different way–a way that an contribute to both retention and growth.

For more information and their top tips to drive account growth, go here (registration required).

 

Category: future-of-sales  go-to-market  

Tags: customer-experience  customer-improvement  cx  growth  retention  sales  

Hank Barnes
VP Distinguished Analyst
4+ years at Gartner
29 years IT Industry

Hank Barnes provides research and advisory services on go-to-market strategies for technology providers. He focuses on issues related to positioning, storytelling, the technology customer life cycle, and customer experience. Read Full Bio


Thoughts on Retention, Growth and CX Expectations


  1. Chris says:

    Hank–I agree…customer service is a key factor in renewing subscriptions, and is a nice foundation to encourage growth. The key to renew subscriptions AND grow revenues is regularly adding new services/features to the subscription. Adding more value to the deliverable increases business value and can lead to growing revenues in the account.

    • Hank Barnes says:

      Thanks Chris. But I’d posit that it is not about adding new services/features —customers may not care about them. It is about whether those features and services help them improve their business in new ways that they had not been thinking about. Everyone expects subscription based products to improve–that is a given. Its new ideas beyond the expected for improvement that matter.

  2. Great post! But a great service plan that has sales enablement part of it can field great results. I remember a program that Xerox ran many years ago that also gave incentives to service teams, lead to good growth.



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