The amount of recurring revenue a company receives may increase, stay the same, or decline for a given period. Recurring Revenue Rate indicates the percent change in the amount of recurring revenue at the end of a specified period compared to the recurring revenue at the beginning of the same period. Measuring recurring revenue rate is essential to help identify the factors that lead to revenue retention and attrition and provides an indicator of the overall state of customer relationship health.
Less NPS and More High-Touch Understanding
We have become too dependent on electronic surveys and NPS/CSat scores to tell us that our customers are okay. These are fine indicators but do not always tell us why we lose customers.
Less NPS / More High-Touch Understanding
To mitigate churn, we need to dig deeper to understand why a customer stops (or never starts) using a product or why they do not perceive value from the services they pay for.
The best way to do this – pick up the phone or visit your customers and listen to their concerns! Don’t wait for customers to cancel before engaging them.
How We Keep Customers
Not every relationship can (or should) be retained, but if you listen carefully enough you will find that you can address many top churn factors. Onboarding, adoption, success planning and account management are all powerful tools to mitigate risk factors.
Principles and practices of customer success are taking us in the right direction with an emphasis on retaining existing relationships. We need to make certain that we avoid the temptations to rely too much on tech-touch and keep personal channels of communication open with customers – especially the ones we do not hear from on a regular basis.
The Bottom Line
Retention of both relationships and revenue are critical indicators of business health. Understand retention levels and underlying factors that influence them. Retention is paramount – make it a strategic priority!
How effectively do you engage new customers? Do have a formal onboarding process? Do you help customers plan for success with your products? Do you monitor customer health? Take this assessment to see where your practices stand and learn how to maximize customer success management.
Check out ServiceXRG’s Customer Success Management Assessment. You will get immediate feedback with recommendations.
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