The American comedian Todd Barry did a great job of describing something as ridiculously easy: “that’s not as easy as shooting fish in a barrel,” he deadpanned. “It’s as easy as looking at fish in a barrel.”
CallidusCloud’s participation at DocuSign’s Momentum event (which began today) is one of those “looking at fish in a barrel” things. Everything CallidusCloud does is about accelerating the Lead to Money process, from the collection and evaluation of leads, to coaching sales people, to delivering the right content instantly, to generating quotes at lightning pace. It’s all about getting the deal done as rapidly and efficiently as possible while delivering a great customer experience that sets up the next sale.
Doesn’t that sound like the business DocuSign is in?
That’s why CallidusCloud’s participation is so exciting (and so easy to understand). All that effort devoted to moving the sales through the funnel doesn’t amount to anything if the deal hits a barrier during the last step of the process. If sales is all about getting signatures on contracts, it makes sense to use the same level of innovation at the signature step as you use across the rest of the deal.
But as exciting as new customer acquisition is – and if you’ve ever heard the whooping and bell-ringing coming out of your sales department, you know it can be exciting – it’s not necessarily the best route to growth and profitability. As we move toward more of a subscription economy, customer retention is becoming the bellwether of a successful business – if you base success on profitability, and not just on revenue.
In most industries, it takes about three years for a customer to become profitable. In some industries, it’s a lot longer (in insurance, for instance, it takes seven years). With even a 10 percent customer churn rate, your chances of enough customers reaching profitability to get your company into the black are not great. If your churn rate is 32 percent – the average for SaaS companies – you may never reach profitability, no matter how hard your sales team sells.
It’s also lot less expensive to retain customers than it is to attract new ones. Frederick Reichheld of Bain & Company put a number on it – it’s six or seven times more expensive to get a new customer than to keep one.
But keep those customers around, and the equation flip-flops. A business that retained all of its customers for just one additional month could achieve an additional 3 percent of annual growth, according to Karl Stark and Bill Stewart of research firm Avondale. Retaining its customer base for four additional months could create double-digit growth without the need to acquire a single new customer.
And that’s why DocuSign Momentum is exciting: the combination of DocuSign and CallidusCloud’s Lead to Money suite – particularly its Contract Lifecycle Management (CLM) solution – takes aim on cutting needless churn and ensuring profitability.
There’s nothing you can do about churn if your products and services don’t meet customer expectations, but you can certainly avoid churn caused by a failure to monitor renewal dates, to understand contract obligations or to maintain contact with customers around renewal contract language changes before it’s time for a new agreement. These seemingly innocuous failures open the door to customer churn. They happen most often not because of negligence but because many companies still manage their contracts in outdated ways – manually or through spreadsheets. But this is an easily automated set of tasks; the only part of it not easily automated is the final signature. CLM takes care of the automation, Docusign handles the signature – and quickly, easily and on-time, a customer continues to be a customer, and stays on the road to profitability.
Best of all, this happens with a lot less administrative overhead – once it’s in place, it’s like looking at fish in a barrel, so to speak. Your team can spend more time making sure customers are happy and less time poring over contract details. That, again, allows you to drive down those churn numbers and drive up your profits.
Stop by our booth at Momentum 2016 in San Francisco to understand how CLM – and the entire Lead to Money Suite – partners with Docusign to create an unbeatable team!