Calling all tech dinosaurs. You know who you are.
Or do you?
I was talking to some colleagues last week, and the topic of “tech dinosaurs” came up. The first thing most of the group thought of were examples of technology products that weren’t keeping up with the Jones’ (or Jetsons’ as it were.) Tech companies who find their products closer to the blunt end versus the bleeding edge of innovation. A Kodak moment, anyone?
And while an aging product certainly impacts tech business success, the particular dinosaur I’m thinking about isn’t threatened with extinction because of a lack of product innovation, but rather a lack of customer relationship innovation. Specifically, with respect to a company’s existing customer base.
We’ve all read the studies about the cost of acquiring new customers versus retaining the ones we have—that it’s anywhere from five to 25 times more expensive to acquire new accounts. Harvard Business Review talks about the value of keeping and growing the right customers, and the dreaded churn rate. While losing customers altogether to churn can cause a hit to revenue numbers, so can an idle customer with a complex—and potentially lucrative—relationship that you simply aren’t tapping into.
Large B2B technology business leaders know 80 percent of next year’s revenue will come from this existing customer base. Yet many haven’t addressed the significant gaps within their customer lifecycle that leak millions of dollars in profits every quarter.
Evolving your product is critical, but if you aren’t also harnessing and acting on the rich revenue value sitting within complex customer relationships, you could soon find yourself on the edge of extinction.