In our last article we talked about what high renewal rates mean for your business, but how do you set your business up to achieve those renewal rates? As we said, it comes down to customer success with your product and stickiness in the face of market changes and competitive pressures.
Let’s talk about stickiness (a term everyone seems to talk about) – just what does it really mean? A quick definition is the nature of your customers to continue to use your products or services, to “stick” with you.
The traditional (and now outdated) approach to keeping your customers sticky was to sign them up to long-term contracts or be a black box in one of their main business processes. Such an attitude could not be further from the spirit of adding value and customer success.
As we look at the stickiness of businesses today, we focus on a few key areas that drive value and make a customer successful – which leads to them to renew, upgrade, and never leave.
Integration: Often described as “hooks”, being integrated with your customers’ core systems such as accounting, CRM, or support, provides value and makes it harder to rip out your product. Integration also can be approached externally. Software that can grab data and process transactions with myriad third parties commonly used by your customers and their customers are of great value.
Data: Collecting, storing, retrieving, and analyzing data is essential to improving business processes. The more you can aid your customers here, the stickier you become. From a customer acquisition standpoint, it helps to be able to extract data from your competitor’s systems and quickly load them into yours.
Usage: Obviously, if your product is frequently used by your customers it is stickier. The more critical the business process, the better. Be wary if you provide your customers solutions to non-critical business problems – they could bolt at any time and not miss a beat.
Users: Akin to usage above, stickier products and services are used across organizations, from those knee deep in a certain workflow to the CFO looking at dashboards and seeing results.
Other areas that help with stickiness include: how much customization and training has been done, how helpful the vendor is when it comes to support, and how visible the product/service ROI is at the C-Level. The key to thinking about stickiness is that if they get rid of you, will they miss you?
What other aspects of your product or service drive stickiness for your business? We would enjoy starting a dialogue to share our ideas with you.