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©2014 immixGroup, Inc. All rights reserved.

“The Art & Science of

Recurring Revenue”

Tina Peeples

November 20, 2014

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Customer For Life

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Customer Lifecycle Management

WHY

1. Beat Growth Targets

2. Existing Customer Base

Programs/Processes

3. Key to Viability/Profitability

4. Exceed Investor and Shareholder

Expectation

3

HOW

Integration and Collaboration of:

Sales

Customer Service (Success)

Technical Support

Operations

Marketing

WHY+HOW=Customer for Life

30-80%Growth expected from the

average investor.

3.1 YearsAverage amount of time to break even

for a new customer when you account for

acquisition and delivery costs. 1

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GROW

NURTURE

Customer Lifecycle Stages

4

DELIVER

UPSELL

CROSS-SELL

RETAIN

RENEW

ADVOCACY

ACQUIRE ONBOARD ADOPT

2

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ACQUIRING

Low Customer Acquisition Cost

1. Nurture early stage leads with low-touch, automated models

2. Utilize high-touch for larger, complex, high-value market segments showing optimal buying signals

5

SUCCESS MEASURES

Lead Conversion Rate

Free Trial Conversion Rate

Lead Close Ratio

Average Sales Cycle

Average Sales Value

6-7 Times less expensive to

acquire revenue from your existing

customers than new ones.3

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ONBOARDING

Monitor and Address Issues Quickly

1. Services tracks milestones such as deployment and training; proactiveprocess to address issues

2. Strong people skills are a MUST.

3. Sales collaborates with Customer Service (Success) to develop customer value plan

4. Develop incentive structure to incenton-time deployments

6

SUCCESS MEASURES

Planned deployment time vs actual

Customer satisfaction

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ADOPTING

Quickly Develop Champions

1. Monitor end user product usage

2. Identify “power” end users to champion adoption

3. Promote value capabilities and develop adoption plays

4. Incent for Customer Success

7

SUCCESS MEASURES

Active users at 30, 60 and 90 days

Usage frequency, especially value features

Breadth of usage

If a user is not loyal within the

first 90 days there is only a

10% chance he ever will be.4

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DELIVERING

Realize Value

1. Analyze customer usage pattern and proactively engage

2. Engage with the end user to quantifyproduct value

3. Business review cadence with customers

4. Revise product strategies to adjust to customers changing needs

5. Incent for customer satisfaction and service level agreement attainment

8

SUCCESS MEASURES

SLA (Service Level Agreement) Achievement

Customer Satisfaction

Quantify Customer ROI - ROM

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UPSELLING

SUCCESS FORMULA

1. Collaborate with marketing to incorporate customer ideas

2. Monitor and understand heavily adopted features and proactively identify upsell opportunities

3. Leverage value selling to meet/exceed upsell goals

4. Identify pricing strategy; annual price increases or rate plan changes

10

SUCCESS MEASURES

Customer Satisfaction

Conversion rate

Average customer (ASV)

Increase in average sales value (ASV)

Quota achievement

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CROSS-SELLING

SUCCESS FORMULA

1. Utilize buying behaviors to promote targeted offers

2. Strategy that promotes premium and value-add features

3. Track usage and purchase patterns to identify potential new product bundles

4. Develop proactive cross-sell strategies with Account Managers

11

SUCCESS MEASURES

Conversion Rate

Customer Satisfaction

Compliant Usage Percentage

Customer Average ASV

Quota Achievement

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RETAINING

At-Risk Customer Identification

1. Customer health scorecard (KPI’s)

2. Identify customers who are at the most risk for churn

3. Execute “save” plays

13

SUCCESS MEASURES

Utilization Rate

Discount Rate

Retention Rate

A 10% increase in customer

retention results in a 30%increase in company

valuation.5

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RENEWING

Renewal Event = Growth Opportunity

1. Quote >120 days in advance of expiration date

2. Develop and execute sales plays for customer

3. Standardize and ensure customer follow-up

4. Account Manager training on product’s value and cross-sell, up-sell opportunity identification

14

SUCCESS MEASURES

KPI Tracking

In-quarter Renewal Rate

Final Renewal Rate

Resolution Rate

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ADVOCATING

Creating Customer and Fan References

1. Identify power users

2. Identify and nurture customers receiving high value from products

3. Proactively cultivate high-profile customer advocates

4. Nurture with targets, automated customer touch base campaigns

5. Develop User Groups

6. Create customer loyalty programs to show appreciation

15

SUCCESS MEASURES

Customer references

Net Promoter Score (NPS)

Overall customer sentiment

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Summary

• Maximize customer lifetime value

– Majority of revenue is generated after the initial sale

– Key to achieving growth targets and increasing company’s valuation

• Business Drivers that Matter

– Expand revenue capacity by ensuring customer-facing sales teams are engaged at

the right time with the right customers

– Increase customer retention rate to gain as much value from customers while

creating a customer for life

– Maximize gross profit by growing business with customer base who only cost 15

cents for every dollar spent on acquiring new customers

16

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Success Formula

Protecting your install base + Growing your business =

Creating Customers for Life

17

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Sources

Sited Sources:

1. 3.1 years – average time it takes for a customer to become profitable and recoup

the initial cost to acquire the customer [multiple analysts including Bessemer

Venture Partners, Opexengine, and River Cities]

2. Customer Lifecycle Stages and explanations – ServiceSource (servicesource.com)

3. 6-7 times more expensive to acquire a new customer than to retain an existing one.

(Bain & Co)

4. Onboarding/Adoption – If a user is not loyal within the first 90 days there is only a

10% chance they ever will be (Scout research data, ServiceSource)

5. 10% increase in customer retention results in a 30% increase in value of the

company. (Bain & Co)

18