Companies love to boast about their “sales-driven culture.” What do they mean by “sales-driven culture?” Generally, it means focusing your company’s customer experience framework on sales. On the surface, that seems to make sense – especially if you see sales as the key revenue driver for your company.
But is that assumption even true? Does sales drive revenue for your company?
The answer is a surprising “not really.”
Too often, companies that embrace a “sales-driven culture” prioritize the act of selling. That means the sales team becomes the 800-pound gorilla in the company. They’re the “hunters” who are bringing in the money that keeps the company afloat. They get the glory. The boondoggles. Sometimes it means they even out-earn the company’s CEO.
Let’s be clear, of course companies need to prioritize sales. Every company needs new customers/clients to grow and thrive. At Alignmint, we are not anti-sales. In fact, we are definitely pro-revenue and are all about maximizing long-term customer value.
But sales is not a company’s only path to growth.
Your customer’s experience is more than their sales experience. We are tired of companies that invest in an amazing customer experience…right up to the moment the contract is signed or the credit card is swiped.
After the customer buys? Not so much.
The customer-facing team is treated as a cost center, with few resources and little internal support. In fact, customer-facing teams have the potential to be revenue engines for companies. Companies that design their customer experience for retention appreciate the value of every touchpoint a customer has with their company.
Companies with a retention-driven culture make it their mission to deliver an amazing customer experience consistently. That means those companies arm their teams with the tools they need to be successful.
Those companies articulate their expectations of employees clearly, and provide a step-by-step gameplan for team members to follow. Without a clear play, employees don’t have a path to success. You set up your team members for failure if you expect consistency without giving them what they need to deliver according to your expectations.
And yet, we understand that play design can be challenging. It’s one of the reasons we created CXology – to help companies create and deploy experiences that make customer renewals a no-brainer.
Retention-driven cultures design their CX framework cross-functionally. Think about it…a customer might begin their journey with your company via outreach from the Marketing department. Then they have a conversation with your Sales team, or even go directly into your Product for a trial. Once they purchase, their experience includes dealing with your customer-facing teams (customer success, onboarding, customer support/service or more). But don’t forget your billing processes, tech integrations and other points of contact.
Your customer’s experience is not driven by sales. By definition, setting up your culture to be “sales-driven” minimizes the impact of every other department’s role in your customer retention.
Think through your customer’s experience framework with the customer at the center of their journey with your company to get a sense of all the different departments and functions that are points of customer engagement.
An added bonus – companies with cross-functional customer experience frameworks, discover the consistency of Key #1 becomes a lot simpler to deploy.
To quote Hamilton, “Follow the money and see where it goes.” Customer experience is the same: companies must understand the true financial contribution of their customers.
Companies that prioritize a retention-driven culture know customer experience design must analyze the financial value of the entire relationship, not just front-end sales. When the focus in a company is on closing the sale and not retention it sets up dire consequences for the company.
Sales folks who are compensated on direct revenue alone might target the wrong customers just to close a deal. That means all of the teams tasked with keeping that customer are fighting a losing battle. When the cost of customer acquisition is high it also means the company might be “winning” deals at a loss. That’s bad for the company, and worse for the employees given the task of retaining a customer who shouldn’t have been closed in the first place.
In addition to serving that customer at a loss, the company also has to suffer the impact of negative word of mouth and other indirect costs of a bad customer experience.
Companies that don’t prioritize a retention-driven culture leave money on the table in terms of their cost of customer acquisition-to-revenue ratio, their revenue growth opportunities and their valuation at the point of exit or sale.
Those differences are stark, and can mean companies leaving millions – or hundreds of millions – of dollars on the table.
You don’t have to take my word for it. Run the numbers for yourself.
The Churn Virus is a white paper and calculator. Enter a few simple inputs and see your company’s financial picture emerge. Adjust the inputs and see the implications for your company’s financial future in real-time.
Your ability to retain and grow your customers’ lifetime contribution has a huge impact on your company’s value. And that value is driven by a cross-functional team working together to deliver a consistent customer experience.