Decoding Profitable Enterprise Expansion

What’s the secret to decoding the value your product delivers to your customer? It’s understanding how to mine intelligence about the penetration into user groups within your existing account base.

You stand a better chance of converting profitable customers for your enterprise play when you truly understand the value already happening in your retention revenues. Then training it on your acquisition and expansion targets.

Think of it as doing research by selling and see what converts in the early stages, then using your knowledge of the value your customers get as the intelligence you use to find more and more profitable customers – and you double down on what the evidence tells you (Or, at least, flip it to 80% of your focus being on the installed customer base you already have, 20% on exciting new ideas for customers).

Optimising Internal Processes

To achieve exponential growth, it is crucial to optimise internal processes, but when treated in isolation, this runs the risk of creating silos and distancing from the customers…and ultimately leaking revenue from your installed base.

Prioritising New Business

Strategically targeting prospective customers aligned with your ideal customer profile opens doors to untapped markets and revenue streams. And avoids being hired by bad fit customers who will go on to fire you.

If you let your reps direct who you sell to, instead of strategic lists, then you are spraying and praying – that’s not the path to predictable revenues.

Nurturing Customer Success

Building lasting relationships with existing customers cultivates loyalty, enhances satisfaction, and bolsters your brand reputation. In B2B, a large portion of your CRM will churn as your customers move on to new ventures. That’s uncontrollable.

Your controllable is making your offering so enticing that they take you with them. Consider this element when you figure out your repeat revenue performance. And ensure your customer success team isn’t tasked with putting out the fires caused by a growth at all cost mentality when finding customers in the first place.

The Path to Sustainable Growth

Sustaining growth means avoiding common pitfalls.

Ensuring Sustainable Expansion Revenues

Balancing pricing and perceived value is crucial to sustain expansion revenues and meet customer expectations. This always surfaces as a “are we leaving money on the table, or selling the table?” discussions. You can’t reliably answer the question until you know the value from your customers perspective. Use the pricing lever, it is profitable, but keep an eye on checks and balances to make sure you don’t undermine your installed base.

Acquiring Ideal Customer Accounts

Acquiring accounts that fit your ideal customer profile optimises resources and maximises long-term success. When reps build their own lists, this pushes the strategy on to individuals who are motivated – typically – to find any money. The pitfall to avoid is to focus and be deliberate about finding the “long money” required for subscription revenues.

Iterating the Product for Enhanced User Groups

Continuously refining your product to cater to a broader set of user groups expands your market reach and meets diverse customer needs. But at each iteration, your core goal is to make sure the product creates results your customer cares to measure. No business KPI ever started with “we must download 1000 reports from an information provider.” The pitfall to avoid is to ensure the core offering is maintained – whilst balancing the need for new product to unlock future revenue. When reps are selling to almost anyone, the call for exciting new product to appeal to “edge cases” can destabilise the core offering for the majority of the installed base.

Seats Versus Enterprise Access

One of the methods of increasing average order value (AOV) is to sell seats. Done well, this is a reasonable first steps in B2B, but as a solution matures, it becomes a tell that the business doesn’t understand its customers.

Advanced companies like Relx create additional levers to influence price as their customers grow, then the price increases.

A driver of growth – with some risk associated – is to shift to enterprise selling. This removes the friction of transactional selling but creates even more pressure to understand the customer well.

At a time when the number of people involved in b2b decisions for buying, renewing and growing is increasing from about 7 to more than 10 people, there’s an argument for keeping it simple (seats, etc) and an argument for getting much closer to customers because the sales cycles are getting longer (enterprise).

Examplars are removing the barriers of transactional selling and installing their commercial and product teams alongside their customer teams, to discover fresh need and budgets – by offering enterprise agreements. The risk is that product teams need to pick up the commercial angles, and the commercial teams need to change their behaviour to find the “long money” – this requires radical rethinking of incentives for all.

Your coin operated sales dude “crushing” their numbers, does not fit this scenario if they can’t get with the new programme. Your long in the tooth editorial or content director who thinks of themselves as above the commercials, will block your growth too.

Think also about the movement to providing information where the customer teams are – specifically the building of MCP access. While you can set access controls in the MCP environment, limiting access to licensed seats is negating one of the reasons for deploying MCP in the first place. But the onus is on you to understand how your customers use information and get ever closer to their teams to keep in lock step with their needs and desires for better solutions.

In conclusion, unlocking growth potential requires a deep understanding of the value your product delivers to your ideal customer profile and expanding its reach within your existing account base. And aligning the attitudes and behaviours of all teams to influence and improve repeat revenues in exchange for delivering value to the customers.

By optimising internal processes, refining your acquisition and retention strategies, and fine-tuning your product offering, you can position your enterprise for sustainable expansion and profitability – but not in isolation.

Think of the whole subscription system – every change has a consequence. If you isolate what you optimise, the system will inevitably become unbalanced. Otherwise you light a fuse with a 2 year timer on your installed base.

If you want to see what this looks like in practise…Look for a PE backed b2b information business about 18-24 months after the deal and check what’s happening to their key personnel – have their chief revenue, marketing, or product leaders left the business? That means someone didn’t manage to sit down fast enough when the music stopped playing.

Ready to unlock your business’s growth potential…contact Substribe to discover how to decode value, target profitable customers, and drive sustainable expansion in today’s competitive landscape.

Don’t wait to drift into another annual cycle.