Last year, Richard Edelman provoked a bit of controversy in the annual Edelman Trust Barometer Report when he recommended that the CEO should become the Chief Engagement Officer. Specifically, Edelman said, the CEO should be the person who takes “responsibility for establishment of the context in which change will occur. Instead of the usual inside game played by business, which relies on lobbying regulators or elected officials, the CEO will take the case to the broader publics to make the macro case for forward progress, not just the micro case for a given product or new factory… There should be the usual strong economic rationale, but there must be thoughtful consideration given to arguments that address emotion and risk, as well as societal benefit… And the CEO must have the courage to hear what is being said in the debate and be willing to change accordingly.”
Edelman was speaking about engagement with the public as a means of establishing trust, which he clearly sees as critical to business success. How effectively CEOs will respond to this call for an enhanced role has yet to be seen.
However, if you’re in sales, you might want to start practicing the concept Edelman is preaching. Engagement is increasingly critical for sales as we evolve into a subscription-based economy. Continuous engagement is critical for profitability, because it extends the customer’s lifespan.
At C3 2015, CallidusCloud Leslie Stretch pointed out in his keynote that it takes, on average, three years for a customer to become profitable in the subscription economy.
To get to that third year, customers must be engaged with your product. First, they’ve got to use it – in many SaaS companies, churn comes primarily from companies that bought a product but never fully implemented it or, if they succeeded in implementation, they failed to gain adoption within the organization. Second, their relationship with the product needs to be strong, since your competitors are certainly trying to get their attention and steal your deal.
If you don’t keep your customers engaged, you can’t help them with implementation or adoption. And a failure to engage will mean your competitors (themselves still energized in the customer acquisition stage) are talking to your customers more than you are.
You may thing ongoing engagement is marketing’s job – and it is. Marketing should run programs directed toward existing customers, just as it does toward prospective customers. But sales should realize how remarkably valuable continued engagement with existing customers can be.
First, keeping them is extremely lucrative for the company. Second, they’re more likely to buy from you than anyone else. Marketing Metrics estimated the probability of selling to an existing customer at 60-70 percent, vs. 5-20 percent for new customers. Being engaged means more revenues, and at a higher profit margin.
What does engagement mean? It means periodically checking in with all accounts and making that a programmatic part of the sales rep’s day. Let your technology remind you – schedule routine calls and stick to your schedule. It’s a great way to check in to make sure all is well with your customers – and it’s not all customer success’s job, either. According to a Harris Interactive study, only about 4 percent of dissatisfied customers complain, and 96 percent just go away. If you’re in touch with those customers, dissatisfaction can be detected earlier, you can steer resources in your company toward customers who need help, and when the situation is resolved you’re the hero. If the customer is satisfied, you can use your regular contact with the customer to check for upselling and cross-selling opportunities.
Marketing can provide part of the engagement program, but sales reps are the ones with direct relationships. They provide the direct engagement that puts a face on the business. And people don’t buy from brands or businesses, even ones they trust – they buy from people.
If the CEO is going to be the Chief Engagement Officer, sales reps must become the customer engagement foot soldiers whose work wins the battles.