How New Relic bumped its share price by 15%?

New Relic released its quarterly result last week and investors reacted by bumping the share price up by 15%. There was a lot of positive news in the earnings release, including a revenue beat and uplift in forecast earnings.

How has New Relic achieved this rapid turnaround?

The simple answer to this question is that New Relic started listening intently to customers.

Listening to customers lead to the redesign of the platform and introduction of a new pricing model.

New Relic also changed the compensation model for Account Teams so they are no longer rewarded for selling shelf-ware. Instead Account teams are compensated when customers use the platform.

The compensation model change was essential for driving the right behaviours and the customer first culture we needed to establish.

New Relic then trained the entire go to market organisation (all Account Executives, Sales Leadership, Solution Consultants and Technical Account Managers) on how to have value based conversations with customers.

Value based conversations meant moving conversations away from product and features and focussing on active listening, understanding customer objectives and aligning capabilities of the platform to customer needs.

Once account teams were armed with this skill set, a programmatic campaign of business reviews with customers got underway.

In a single quarter 70% of customers who spend over $25K met with their New Relic Account Team.

Business reviews focussed on aligning to customer objectives, agreeing a mutual 90 day success plan and identifying any gaps in expertise for achieving the desired outcomes.

What’s Next

By the end of this calendar year 100% of customers who spend $25K or more will have a mutual success plan. These plans will continue to evolve as our customers adjust their focus and mature their use of the platform. What will remain, is New Relic’s relentless focus on listening to customers. Customer centricity is definitely here to stay.

Chris Marshment is Director, Sales Strategy and Global Accounts at New Relic. The views and opinions expressed in this article are his own and do not necessarily reflect those of New Relic.