Why Customer Marketers Should Focus on NRR

Today, we're diving deep into a metric that often flies under the radar but now is all the rage. It plays a pivotal role in the growth and sustainability of your business.

What is Net Revenue Retention (NRR)?

NRR is a measure of your company's ability to expand its revenue from existing customers over time. Put simply, it tracks the upsells, expansions, and renewals from your existing customer base, while accounting for any losses due to churn. It's a valuable metric that reflects the health of your customer relationships and your ability to drive more value from them.

Why Should Customer Marketers Focus on NRR?

Wallets have snapped shut, and everyone starts squeezing their budgets like they're trying to fit into their old skinny jeans. —> That's when boosting NRR becomes your trusty sidekick.

Here's the deal: Think of it as your trusty umbrella in a financial shit storm. NRR helps shield you from the revenue downpour caused by customer churn. When you hold onto and even grow your existing customer relationships, you get to step up and say, "Hey, C-Level, I've got this!" Focusing on:

Sustainable Growth: NRR is a powerful indicator of sustainable growth. It highlights your ability to retain and grow your customer base, reducing the pressure to constantly acquire new customers, which we know is more expensive!

Revenue Optimization: Focusing on NRR encourages cross-selling and upselling opportunities, helping you maximize the lifetime value (LTV) of each customer.

Customer-Centric Approach: By nurturing existing customer relationships, you demonstrate a commitment to providing ongoing value, which enhances brand loyalty and customer satisfaction.

Before I jump into examples of campaigns I need you all to set this up at your company ??…Pre-Renewal Play

Desired Outcome: Set yourself up for success by enabling adjacent teams with an efficient renewal preparation workflow.

Tactics:

• Work with Customer Success to define the process and check if they have a comprehensive renewal plan that outlines the renewal timeline, and communication strategy.
• Add in budgeting cycle and timeline for renewal questions into onboarding
• Create the data fields you need to add that info into your CRM
• Set up alerts to go to CSM and Account Managers during budgeting cycle
• Create email templates in Outreach or Highspot
• Train your team on how to use the workflow effectively
• Communicate the renewal plan to your customers, providing them withsufficient time to budget for the renewal.
• Evaluate the renewal process after completion and capture feedback forfuture improvements

High level initiatives to boost your NRR:

1. Customer Success Workshops:

Host workshops, webinars, or training sessions to educate your customers about advanced features and functionalities of your product. Empower them to make the most of your solution, increasing the chances of upsells.

2. Customer Journey Mapping:

Enhance your customers experience with tailored recommendations based on each customer's usage and needs. A well-guided experience can lead to allll the good stuff…expanded product adoption, advocacy, retention, etc.

3. Quarterly Business Reviews (QBRs):

Suggest to your VP of Customer Success to schedule regular QBRs with key accounts. Discuss their goals, challenges, and how your product can help. This personal touch strengthens the relationship and can uncover upsell opportunities.

4. User-Based Pricing Models:

If you have a serious churn problem, consider switching to user-based pricing. Rather than giving customers the choice to churn or remain an active customer, usage-based pricing offers each customer greater control and flexibility over their spend. Giving the option to throttle back usage of a solution without stopping completely will improve churn compared to the subscription context.

Plus, tracking usage for user-based pricing gives you a better view of customer activity and account health, something that's harder to achieve with older business models. You can use this data to reach out and drive more growth through tailored outreach efforts.

6. Churn Analysis:

Investigate the reasons behind customer churn and take proactive measures to address them. Identify common pain points and create a program that helps reduce churn and protect your NRR.

Campaigns to boost NRR

Okay I was going to create a play here but my book on Account Based Customer Marketing (ABCM) has 50+ pages of plays for Retention, Upsell, Executive Outreach, and more. Download for $0 —> Unlock Growth with ABCM .

If you create a few stretch assignments around improving NRR, it helps the visibility of your role and sets your company up for success in long run. ????

Love your CMA Soulmate,

Leslie

More Digital Resources

1. Catch up on previous newsletters here .
2. Check out my video course Measuring the ROI of Customer Marketing & Advocacy if you want to showcase the ROI of your programs. Enjoy your 20% off!
3. A free resource to help you while you are interviewing or going through performance reviews and gunning for a promotion- CMA Career Framework .
4. My latest free book on Account Based Customer Marketing (ABCM) with 50+ pages of plays for Retention, Upsell, Executive Outreach, & Scrappy ABM. Unlock Growth with ABCM is available for download.
5. Take a look inside the most active online community to get access to exclusive resources, case studies, playbooks, and templates that are custom-tailored to elevate your Customer Marketing efforts. Join Club CX today!
6. Custom consulting packages. Visit cmasoulmate.com or DM me here.