How to Design Everlasting Value Propositions in B2B Marketing, Part 2

Increasing customer LTV with a Customer Success strategy

In the first part of this article I addressed how to accelerate the sales closing process with B2B customers. Using return on investment (ROI) as a justification, it is possible to shorten the sales cycle and ensure decisions come faster from within the buying organization.

What is Customer Lifetime Value 🌱

Customer Lifetime Value is the total amount of revenue that a customer can bring during the whole history of the company. It is often shortened as CLV, CLTV or just LTV. It is extremely important to know how much money a customer will generate to the company, in order to plan your customer acquisition strategy. This will help you calculate how much investment you can put into customer acquisition and customer retention.

Customer Lifetime Value distribution — Neil Patel
  1. the customer satisfaction is very low

It’s All About Customer Success 😍

Although Wikipedia often has a very traditional way of defining things, I personally think the one for Customer Success is quite spot on:

“Customer Success is the function at a company responsible for managing the relationship between the vendor and its customers. The goal of customer success is to make the customer as successful as possible, which in turn, improves customer lifetime value (LTV) for the company.”

In other words, Customer Success’ purpose is to make sure your customers will get the necessary help from you to grow their own business. The assumption here is that, if your customers succeed and grow their business, they will have more reasons to keep investing in your solutions. That is, if you help your customers grow, they’ll help you grow with them. Sounds easy, right? However..

How many times have you heard this when calling customer support? 😠

1 — Have a team dedicated to Customer Success 👥

First and foremost, you must have a dedicated team to help your customer. This implies you will have to separate customer support from customer success, preferably into different teams.

2 — Build a feedback loop 💬

Feedback loops are simply bi-directional communication channels to ensure mutual understanding:

  • Establish a 2-way feedback loop: don’t use the channel to push news to your customer. Instead, use it for asking questions and listening to their problems.
  • Document every message, request or complaint your customer is communicating over the feedback loop. Bring this information to product planning meetings.
  • Periodically check that the feedback loop is still working and being used by the customer. If not, then rebuild it so that the communication keeps flowing.
  • Remember this: no news is bad news. — A silent customer could be a customer looking for an alternative solution.

3 — Understand their business 💸

In order to have a deeper understanding of your customers’ business and what makes them grow, it is vital to understand the entire value chain, all the way down to the end consumer. This will help you design a plan for your product to empower your customer to deliver higher value and, in turn, make more money and grow. Here’s an oversimplified example:

Customer value chain — How does your company deliver value beyond your customers

4— Make product management embrace Customer Success 🤗

Now it’s time to improve your product or service to make sure you can support your customers’ business growth. It is the product manager’s job to make sure the product roadmap is built to enable and support your customers’ growth (= success).

Real Life Example: How we almost lost our biggest B2B customer 😕

In order for you to better understand the potential impact of Customer Success in Customer LTV, I want to tell you a story that happened to me two years ago. Our company’s biggest customer is one of the largest smartphone manufacturers in the world. This customer manufactures and sells directly to consumers. We provide them with software enhancements for their products that are used by millions of consumers every day.

Conclusion

When it comes to B2B markets, there is only one thing that sells: money. Either you make your customers make more money or save costs (ROI). However, it is not only about closing the deal. If you want to keep your customers around and increase their life-time value (LTV), you’ll need to design your value proposition around Customer Success.

Chief Growth Officer @ Fidelix 🚀 Executive Board Advisor | Leadership | Strategic Marketing Management | Digital Transformation ➡️ www.claudiocamacho.com

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