The Top 10 Requirements for an Effective Client Lifecycle

This January is ServiceVantage’s 10^th anniversary and in the 10 weeks leading up to our anniversary, we will be posting top ten lists of things we have learned and experienced over the years working with more than 30 technology firms across many industries.

The first topic in this series is:  The Top 10 Requirements for an Effective Client Lifecycle.

Before talking about the top 10 requirements, it is important to understand that a Client Lifecycle Program is a proactive client engagement approach, that is unique to your specific business and industry that has these prime objectives:

a)      Revenue Protection – Also known as Client Retention.

• Business Driver Attainment – Your ability to meet or exceed the original and evolving business needs of your clients.  This is the cornerstone of how you should measure your success.
• Consistent and Pervasive Adoption & Usage – Over the course of the contract term and with personnel changes and additions.
• Interacting with Client – Client must understand that you are highly professional experts in your space who strive to add value with each interaction

b)      Expand Usage & Facilitate Revenue Growth – All items above make it far easier for sales to expand your presence within any given client.  And your client will be happy to do so.

c)       Market Reference Ability – Can you leverage your clients to promote your brand and solution to prospects?

The Top 10 Requirements for an Effective Client Lifecycle:

1.  Must be a corporate wide initiative – not just a client services initiative.

Without Board and CEO level visibility, buy-in and sponsorship this type of corporate-wide initiative can be challenging to have all key stakeholders involved and invested.  Although it is often lead by the client services team, a multi-departmental approach is necessary for it to be highly effective.

2.  Each Department Leader has a key role to play

 In a successful Client Lifecycle program, the leaders in departments such of Sales, Marketing, Product Management and Client Services all have a role to play at some point.  Their contributions provide the pieces to the puzzle for a client when they are decided whether or not to renew.

 3.  Market and Promote your client lifecycle program

When you develop and execute on a truly unique approach to client engagement that will absolutely be a differentiator from your competitors, brand it.  Market it.  Don’t be afraid to let people know that your whole company has an approach that will make your clients successful with your product & service over the long haul.  This added visibility also provides the appropriate amount of pressure to make sure your organization sticks with it.

4.  Have a designated owner who acts as a “quarterback” of Client Lifecycle program.

Coordinating multiple stakeholders does require ownership for a client lifecycle program.  The Executive owner is often the most senior client-facing (post-sale) executive.  Depending on the size of firm, this would be the CEO, COO or VP of Client Services.    This executive owner should be responsible for client retention.  From a client to client perspective the owner should be a post-sales account manager, often referred to as a Client Advocate, Client Account Manager or Client Success Manager who is measured on retention, and not new sales revenue.

5.  The Client Lifecycle activities should support the three main criteria that a client will use when deciding to renew: 

Although this is a potential point of debate, from our experience there are 3 key factors that your client assesses when deciding to renew business with you:

1. Is your organization meeting or exceeding their current business needs / business drivers;
2. Does your client have confidence that you will continue to meet their current, future and evolving business needs  business drivers, and;
3. The client is confident that they picked a market “winner” not a market “loser”.   For example, even though RIM continues to be quite strong on meeting the business needs of the corporate user community, they will still lose many clients because they are now perceived , wrongly so,  as a market “loser”.  No one will want to be the one that made the decision to go with a market “loser”.

Each of these three areas must be proven, measure, re-evaluated over and over again throughout the client lifecycle to ensure that the elements your can control or influence are in your favor when they are making a renewal decision.  There are other factors outside of your control, but they are just that, outside of your control.

6.  Should leverage, and take advantage of, your ability to use client driven referrals to generate new business.

This should be an obvious, but many companies stop at having a logo on a website, or perhaps a case study, as a method to use an existing client as a reference.   The reality is, that if you are doing a great job for your client, many of them would take a call from a prospect, or even better, refer you to a peer from another organization who would also benefit from your solution.  As a former colleague of mine used to say, “Don’t ask, don’t get”.   Understand, per client, what type of reference they are willing to be, and leverage it – but don’t take it for granted either.  You need to continue to earn their reference.

7.  Should concentrate on user adoption and overall usage rates

The user community within your client’s organization can change frequently due to layoffs, new hires, mergers, and other business events.  You client lifecycle approach must have a deep understanding of the user community and adapt to a changing and evolving user base within the client’s organization.  A strong client lifecycle approach is highly proactive in tracking usage & adoption and stays on top of the shifts in user community and reacts accordingly.   A fantastic product that could help you get great detail on usage is www.totango.com .  It gives a level of usage intelligence that is invaluable.

8.  Should provide client intelligence on the renewal health of each client

As per our previous blog, http://servicevantage.com/2011/07/the-equation-for-customer-retention-predictability/, having a client lifecycle program that measures, among other possible things, business driver attainment, Vendor-Client interactions, client’s willingness to be a market reference and usage rates provides an ongoing scoring ability to gain a solid understanding of the likelihood of renewal.  Doing this in regular intervals gives you plenty of time to change the course for any client who is on the path of not renewing.

9.  Measurable with centralized access for all stakeholders

A successful client lifecycle program is like a hub on a wheel with information “spokes” going to and from all key stakeholders in the your organization.  Each group will benefit significantly from the knowledge/intelligence gained about client activities, successes, failures etc.   In our experience, it can have a profound effect on who you market to, how your market to them, what the actual development priorities should be, etc.   With one of my clients, it provided great clarity into a market segment that just wasn’t right for their solution.  They pulled all Leads, Opportunities with prospects from this segment, and they exited gracefully from existing contracts that we knew were doomed to fail.

10.  Proactive in nature,

If your sole interaction with your clients is reactive by definition it’s a failure.  Getting ahead of a train, is far better than being run over by it.

Tagged client referrals, client retention, saas, subscription lifecycle