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The concept of customer centricity is having a moment in the spotlight, but the idea isn’t new. For decades, consumer companies have treated current customers as their most efficient source of additional revenue. B2B companies are starting to understand that the same concept makes sense even when “buying more things” looks like a contract renewal rather than a quick purchase of, say, shoelaces.
Of course, buying software is more complicated than buying shoelaces. “Customer” doesn’t mean only one person. You have committees. You have an economic buyer and at least one end user. They have different goals and needs. They use your product differently, and the buyer may not even use it at all. For example, the Falkon economic buyer is typically a Chief Revenue Officer, but the CRO doesn’t usually log into the product. Our end users are various leaders in the sales organization.
Both economic buyers and end users are important, but the only way to drive high net dollar retention is to build a product users love. If your product feels necessary to them, they create the momentum for purchase and renewal. They explain exactly why they need it and what their company would lose without it.
Revenue leaders need a deep understanding of users, their pain, and the real value your product delivers (not only what it was built to do). That understanding translates to revenue protection. To get it, explore both qualitative and quantitative feedback: what users say and what they do.
Avoid the temptation to over-bias on quantitative analysis. Data can’t tell you everything you need to know about product value. You need to talk with users, even though they may say things you don’t want to hear. In fact, you need to talk with them because they may give you difficult feedback. Remember they’re a proxy for thousands of other users with similar experiences.
Qualitative end-user feedback
When you talk with users, they’re going to want to please you. It’s human nature. If you ask them open-ended questions, they’ll give pleasant responses. These tactics help you go deeper to ensure your product offers necessary solutions that drive renewals and increase revenue protection.
- Form a product advisory council with about 20 members. If you’re a brand-new company, incentivize a group of early users. If you have a user base to choose from, select people who use the product frequently. Their usage indicates that the product has helped them be successful in their career, so they are invested in your success.
- Host product roadmap reviews with your council. Get their feedback on what you’re planning to build before your team spends time developing it. Ask at least three follow up questions after every initial response. What do you like about this feature? When in your day/week/month would you use it? What results would it help you drive? What would it enable you to stop doing?
- Build a fake demo before new features are built. Create high-fidelity mocks and walk your end users through the experience. Look for aha moments from them. Showing the evolved product “in action” is a cheap, relatively easy and low-investment way to glean early signals on value before doubling down on the actual build.
- Create feature flags once new capabilities are built. The flags give you the ability to turn features on and off to test adoption among your council and roll out high-adoption features to every user. Doing that will help you avoid upsetting the entire base if a new feature breaks.
- Check in every week with your council. Ask them how they’re using the product and what they get out of it, again going at least three questions deep. Ask them to show you how they use the product to accomplish a specific task.
This level of qualitative research is how to get meaningful insights from the only people who can truly validate or invalidate your product value, and use it to drive revenue predictability and protection. You gain efficiency toward new business, minimize lost revenue, and reduce wasted spend.
Do people use your product how you think they do? Do they use the features you expect them to? Have they developed surprising habits? These are questions that a quantitative assessment can answer.
Watching your product usage data roll in through a tool like Amplitude is easy, but it’s only meaningful if you know what you’re looking for. Which actions mean a user is getting value? Here’s how to find out.
- Make your value hypothesis (or a few). This hypothesis is your assertion of the value you think your product provides to your end user. You should have one per end user persona. At Falkon, one of our end users is a BDR manager. Our value hypothesis could be: Falkon helps a BDR manager coach their team more efficiently by spending much less time preparing for weekly 1:1s.
- Come up with value metrics, the 2-10 trackable in-product activities that represent your value hypothesis. In our example, we would want to see if our BDR users visit the coaching platform every week. Do they look at each rep’s data? Do they share reports with everyone? We would track logins to the coaching platform, clicks and time spent there, and the number and frequency of report sharing.
- Compare the value metrics to what your end users tell you. If your council or other customers are reporting that they love the product but their value metrics don’t reflect what you expect, it means one of two things: they’re being nice and you need to create the psychological safety for them to tell you how they really feel, or your value metrics are wrong and you need to dig into what the users actually do as a step toward new metrics.
- Learn from renewal and expansion accounts if you have a large user base. See what they have in common with each other. If 80% of renewal customers use feature X and feature X was less frequently used in lost customers, it’s one that reinforces your value hypothesis or spurs you to make a new hypothesis.
Value metrics are likely to change as your product evolves, so expect to revisit your hypotheses. The brilliant thing about these metrics is that they’re useful throughout the entire revenue lifecycle. They are the earliest predictors of cross-sell and upsell readiness, and the first signals of revenue risk. Drive more expansion dollars with alerts around your value metrics that tell the sales team which accounts and contacts to prioritize. Increase revenue retention by catching meaningful decreases well ahead of loss.
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