@Ed Powers provides great advice here, @Liam Dunne . I'd add that there are some things that "every" B2B CS organization should be focused on, which are entirely in the control of the CSM, and some of those things have dramatic impact on NRR, for example:A) Strengthening relationships with all the "right" contacts in an account, including key stakeholders (decision makers, budget holders, champion, key influencers, power users, etc). There are 3 parts to this: - (1) What percentage accounts in your CRM have the "buying committee" defined? I mean, if a typical sales and/or renewal cycle involves a Champion, a Program Manager, and a Decision Maker, then how many accounts have those 3 contacts identified by the CSM? - (2) The second part is to establish how you know if there's an "engaged relationship" with those contacts. The best method we've found for that is to engage those contacts via a request for feedback -- what is working and what needs improvement -- via a simple assessment/questionnaire (if you know me then you know I hate the word "survey" ...but I digress). It's not enough to look at usage (the stakeholder team often doesn't even use the product) because that's the bare minimum you'd expect. Asking those contacts to "help me help you" by providing the assessment not only shows you the level of engagement, but also provides very valuable insight for the CSM to course-correct). And with this motion you can measure if the contact responded to the request or not. BTW, we KNOW that silent accounts (those not willing to provide feedback) are far more likely to churn, often 7x-10x more likely. Also, stay away from begging for 10s and instead request feedback and watch the improvement from the follow-up actions.- (3) And speaking of follow-up actions from #2, what percentage of feedback submissions have been followed-up upon with a recorded root-cause? Especially if a contact is unhappy then you'll want to know what they experienced compared to what they expected (and where those expectations came from). Those root-causes are gold in order to drive improvements that prevent issues from ever happening in the first place. Another example is to utilize a KPI such as Customer Acquisition Cost (CAC) and/or Lifetime Value (LTV). If CSMs are doing there jobs well then you will see declining CAC because of the referral economics, and increasing LTV through better retention and expansion. That said, those KPIs lag so you'd need more time to get reliable data here.Hope this helps -- happy to provide more info.
Hi Liam,My last gig was 75% monthly renewals. We broke our quarterly targets out as follows:
I'd be happy to talk through some of the pros and cons of this approach. We felt it gave us good ownership and focus on the things we were accountable for and rewarded strong performance. Certainly wasn't perfect, but I'm a big fan of tying incentives to the ultimate end goal.I'd be happy to talk through on a call if helpful.Good luck to you!
Jay
Just spitballing here, but could you do a quarterly NRR target that uses ARR as of the start of each quarter as the base? That way, you don't have to separate out monthly vs annual contracts?
For example, let's say you have $10M ARR as of 01/01/22 and have an NRR target of 100%. On 03/31/22 you look at the ARR for only those accounts that were customers as of 01/01/22. If they still provide $10M ARR, you've met your goal. For then next quarter, let's say you added $2M in new business. You now have a base of $12M. Let's say you set a target of 105% NRR. Again, looking at only the accounts that were customers as of 04/01/22 you are looking to ensure you have $12.6M in ARR as of 06/30/22. Essentially, each quarter you re-calculate your base and set a new NRR target (or you could just keep the same NRR target throughout the year and just re-calculate the base). Would something like this work?