Recent research from Gainsight, a customer success software company, paints a gloomy picture for technology companies when it comes to customer renewals and upsells.
Of the survey respondents, consisting of top-performing private cloud and SaaS companies:
- 77.5 percent believe their net retention rate will decrease between 3-20 percent compared to their original business plans.
- Of those companies, 40 percent believe it will drop by 11 percent or more.
According to Nick Mehta, Gainsight’s CEO, much of the anticipated decrease can be attributed to down-sells, when customers decrease capacity and eliminate forward-looking demand. This is especially true for firms that serve the hardest-hit vertical markets like hospitality and travel. Not surprisingly, most firms expect upsells and cross-sells to decline versus plan as well.
What Can You Do Differently?
When we released our new book, The Expansion Sale, on February 14th, we had no idea how prescient the topic and content would be. Almost in an instant, new business acquisition has slowed to a crawl, and companies are turning nearly all their focus toward keeping and growing their existing customers.
I’ve been having LinkedIn conversations with people who have read our book and are asking for advice on specific situations. They want to know how to best use the frameworks we provide for renewals (Why Stay) and upsells (Why Evolve). They’re testing their messages with me, and I’m humbled to provide them with some tips and feedback.
We’re grateful that these concepts, which seemed important as we researched them, tested them, and wrote about them, have found such instant and practical application.
Companies are now going all-in with initiatives around retention and revenue protection. If you’ve read our book and have questions (or a little free advice) during these extraordinary times, I encourage you to reach out to me on LinkedIn at https://www.linkedin.com/in/tim-riesterer/.
I will do my best to answer as many of your questions as I can to help you make positive and productive use out of these concepts. And if the response is overwhelming, we’ll put together a webinar on the topic and reach out to all of you who are interested.
If you haven’t already, check out our e-book, Four Must-Win Commercial Moments in Customer Success, to discover research-backed messaging frameworks for winning more revenue from your existing customers.