In my last blog post, I talked about the crucial role leveraging revenue moments plays in the future health of any recurring revenue business. Revenue moments occur whenever a customer interacts with your company through product, website, email, billing, servicing, provisioning, or other similar activity. Each of these interstitial points of connection with the consumer gives your business the opportunity to build customer lifetime value (CLV)—a key metric in measuring the health of your company. Over time, this method of growing the relationship—which can be as significant and long-lasting as a marriage—with your customer base not only increases the financial health of your business, but also cements customer loyalty to your brand.
Most business leaders now seem to have a firm grasp on this strategy and its importance. Furthermore, they can see how to apply it in many of the common situations mentioned above. The billing anniversary (an example given in the previous post) is a clear case of a revenue moment that you can cash in on by sending a special upgrade offer or a discount on an additional service. Even the customer bill itself offers a significant platform for delivering value and connection to the customer.
However, there is a whole host of other possible opportunities to leverage revenue moments that are missed simply because they don’t conform to the traditional concept of a revenue moment. Most people think revenue moments are only transactional (add-ons, new service purchase, etc.) but they’re also relational. Like any good marriage, you want to make sure that your partner (in this case, the customer) has excellent experiences with you to remember over the years. Such experiences grow the health of both the customer relationship and your business, as a better customer experience will increase CLV and revenue in the long run.
Focus on the revenue moments, both the expected and the unexpected. Here are a few unexpected revenue moments that you should be aware of.
Pre-defined milestones. When customers reach some pre-defined milestone in their interaction with your business—let’s say they make their 50th purchase of your products—you can offer them something of value such as a coupon, discounted/free product, or some other bonus. It’s this sort of small-but-meaningful gesture that people remember and value over time. That’s how good relationships are cultivated and maintained.
Reaching/nearing a threshold. If your company offers a usage-based model and the customer nears or reaches the limit of their plan (in terms of units used or percentage of total allotment), typically your system automatically sends some sort of warning message. When handled strategically this seemingly mundane moment for the user can be turned into CLV gold. How? By bundling the warning message together with suggestions to cross-sell or up-sell to a higher-volume plan. When done with a helpful tone, you will not only experience a lot of users upgrading their plans, but you’ll also be perceived as thoughtful and caring.
Declining usage. A similar opportunity arises at the opposite end of the spectrum, when users consistently fall far below their usage quota or experience a sudden and dramatic drop in usage. Your company can respond by shooting a note asking if the customer is on vacation and needs to pause the account or change the plan to accommodate usage. Sensing the users wants and needs increases your perceived caring and value, which in turn boost CLV.
Account changes. When a customer account changes, you can turn it into a revenue moment. For example, if a new member is added to an account you can offer a family discount. Something as simple as an address change is your chance to ask if the customer needs new or additional services in the new area.
These are just a handful of the possible unexpected revenue moments you can use in your customer satisfaction and retention strategy. If your billing system is flexible and powerful enough to handle this type of high-level analysis and implementation, it can radically increase your CLV and bottom line. By predicting and responding to customer’s wants and needs, especially during these unexpected revenue moments, you will build a healthy relationship with your customer, while enjoying the long-term benefit of revenue growth.