Your Existing Customers Are Your Growth Engine. So Why Are You Ignoring Them?

 

Here's a number that should keep every CEO up at night: 73% of revenue comes from existing customers. Not new logos. Not the deals your sales team is chasing right now. The customers who already trust you enough to write you a check.

And it gets worse. According to Ebsta's 2024 analysis, 52% of net new revenue also comes from existing customers. When you do the profit math, nearly 100% of profit — sometimes more than 100% — is generated post-sale. Companies routinely need to generate 130% of their profit from existing customers just to cover the cost of acquiring new ones.

So where does the investment go? Into new business sales. Every time.

I had a conversation with Alex Raymond on the Thoughts on Selling podcast recently that crystallized something I've been feeling for years. Alex is the founder of AMplify, host of the Account Manager Secrets podcast, and he just published a book called The Growth Department. He's spent the last decade studying how companies grow through their existing customers — and his conclusion is blunt: most companies are blowing it.

The Varsity Team and the JV Squad

Alex uses an analogy I can't stop thinking about. We treat the sales team like the varsity team. They get the best coaches, the best playbooks, fancier uniforms, a nicer bus, nicer changing rooms. The account management and customer success teams? They're the JV squad. An inexperienced coach. Ratty hand-me-down uniforms. A smelly locker room. And then leadership says, "How come they're not performing at the same level?"

It's a structural problem, not a talent problem. The people in post-sales roles are often the hardest workers and most customer-centric people in the entire company. They drive more revenue than the salespeople in many cases — they just don't talk about it. But without the playbooks, training, tools, and leadership investment that sales gets, they're left twisting themselves into pretzels to get renewals across the line and keep customers happy.

And here's the cruel irony: when they succeed through sheer heroics, leadership doesn't see valor. They see a bunch of people running around putting out fires. The respect for the team goes down, not up.

The Recurring Revenue Myth

One of the most dangerous ideas in business today is that recurring revenue is automatic. Alex calls it a myth, and he's right. Just because revenue is structured as a subscription doesn't mean it shows up without effort. But executives hear "recurring" and assume it's on autopilot — which gives them permission to hire less experienced people, invest less in their development, and treat the entire function as an afterthought.

In the early days of SaaS, we knew better. Even on a 24-month contract, we'd say we have to earn the customer's usage every month. That mindset has been replaced by complacency, and the results are showing up in churn rates everywhere.

Keep, Grow, No Surprises

Alex offers a framework that's simple enough to fit on a napkin and powerful enough to reorient an entire post-sales organization. The job of account management is to help your company win. You do that three ways: keep the customers that sales brought in the door, grow the ones with the most potential, and make sure there are no surprises.

That's it. Not NPS scores. Not CSAT dashboards. Not being a liaison with the product team. Those are trailing indicators. The real job is keeping, growing, and eliminating surprises — and delivering profit back to the business.

The $1 That Changes Everything

One of the most surprising data points Alex shared comes from Greg Daines, who has analyzed massive datasets on why customers stay or leave. The minimum threshold to get a customer excited about renewing isn't some blockbuster ROI number. It's basically $1 of measurable improvement.

Why? Because once a customer sees a dollar of progress, they can imagine the path to ten, a thousand, a million. They feel justified in their decision. They want to keep going. And here's the kicker: even customers who see negative results stay twice as long as customers where you don't report value at all. Showing up with the truth — even when it's ugly — beats silence every time.

The Path Forward

This conversation reminded me of Jane Scott, one of the best CSMs I've ever worked with. Jane was the glue that held the Xerox account together at Oracle. She knew the metrics, she knew the people, she knew what mattered. She's what happens when you invest in post-sales talent and let them do their job.

Every company deserves a Jane Scott. But you don't get one by treating post-sales like the JV team.

Alex's book The Growth Department lays out the blueprint for changing that — for building the scaffolding that account management and customer success teams have never had. If you're a CRO, a VP of sales, a founder trying to scale, or a CSM wondering why nobody seems to care about the work you're doing, go read it.

The path to long-term, durable, profitable growth doesn't run through your next cold outreach campaign. It runs through the customers who are already here.

Listen to the full conversation on the Thoughts on Selling podcast.

Selling is Dead

A good friend of mine, a senior sales executive at an enterprise software company, questions the need for field sales people. And he’s right, the outdated activities carried on by many field reps no longer have a place in this new economic environment.

The selling function has gone bipolar, but not in the sense first conjured by that word. What we’ve seen over the past few years is that the interactions that assist a prospect in completing a transaction have polarized in one of two camps – value or convenience. High touch or high efficiency. Human or automated. Face to face or the web. In person or in pajamas.

When was the last time you went to a bookstore? If you know what book you want, it takes fewer than 50 keystrokes and perhaps 2 minutes of your time to summon the book to your doorstep or inbox. On the other hand, if you want assistance in selecting a new bicycle, you’ll invest a couple of hours at your local bike shop talking with an expert about the relative merits of carbon fiber versus titanium, Campy versus Shimano, DuraAce versus Ultegra or Record versus Chorus.

You’ll still do your homework on the web prior to venturing out to your LBS. You need to show up prepared, to look smart, to avoid being bamboozled by a fast talking sales rep pushing a spiffed product on Saturday afternoon. But once you get there, you will find a rep that you like, someone you’ve decided that you trust (using the elaborate methodology outlined by Malcolm Gladwell in Blink) and you’ll count on her to guide you through the decision making and implementation (fitting) process.

Even smart, well-informed buyers can benefit from experienced, value-adding salespeople. As a cyclist with 35 years and countless thousands of miles under my belt, I once took a vintage cyclocross frame to a local shop (Hot Tubes) to be repainted. When I asked Toby, the shop owner and builder, about painting alternatives, he pointed out that the frame was two sizes too large for me. I had mistakenly assumed that cyclocross frames fit just like road bike frames. The frame went back up on ebay and Toby built me a beautiful custom cyclocross frame, fitting me perfectly and finished in my favorite shade of blue.

As a consumer, I knew what I wanted and I thought I knew what I needed. Toby, as an expert sales person, didn’t go the easy route and accept the frame for painting. Instead, he educated me about proper fit and helped me to conduct a cost benefit analysis of refinishing my (poorly fitting) current frame versus engaging him to build a (properly fitted) new frame.

Buyers selecting sophisticated technology products or services fare no better. Many technology initiatives fail not because of the inadequacies of the product, but of the lack of preparedness of the organization. Buyers think they know what they’re getting into, but simply put, they don’t.

And many sales reps will book the order without helping the organization to understand the processes required to ensure success of the implementation. Most sales people manage to get away with this once with a particular organization; a few manage to do it twice. However, it’s the reputation of the vendor rather than the sales person that is tarnished in the process. And today few vendors can afford to book individual sales at the expense of their reputation and standing in the user community.

So What’s a Savvy Vendor to Do?
You must act now. With the economic pressures easing a bit and budgets starting to loosen somewhat, the imperative to change is lessening. In my research on organizational dynamics, I’ve found that it takes a “big bang event” to ensure the success of a strategic cultural change initiative. (It also takes role and behavior clarity, but that’s a separate conversation.)

The Sales Productivity Framework I developed at IDC incorporates five key productivity levers – people, management, methodology, sales enablement and customer intelligence. How would you assess the capabilities of your sales organization for each of those levers? Are you sending your sales people out unprepared or ill-informed? Are you forcing high value sales engagements on customers looking for simple acquisition efficiency?

Andy Grove, former CEO of Intel, said that only the paranoid survive. In my experience it’s the world class sales organizations who focus most on improvement. In contrast, most of those stuck in the middle of the pack continue to hope that things will get better. We all know that hope is not a strategy, and we further know that if you’re in the middle of the pack, and not moving up, sooner or later (and probably sooner) you’ll find yourself spit out the back.

Don’t Let this Perfectly Good Crisis Go to Waste

When we come out the other end of this recession, we are not going back to what we wistfully have been referring to as “normal.” Sketchy is the new normal. Uncertain is the new normal. Tight budgets is the new normal. Discerning prospects is the new normal. CFO or CEOs signing off on small projects is the new normal.

Your customers will have less patience for game playing, for unprepared sales resources, for timewasters, for uncertain ROI, for projects that don’t deliver on their explicit promises. If your message is not crisp, if your sales teams are not professional and polished and consultative, “below quota” will be the new normal. And nobody wants to live there.

Thanks,

Lee

The Chief Sales Officer

Peter Drucker said that "the purpose of marketing is to create a customer."

But just as the title of Chief Marketing Officer grew from the ascendency of the marketing role in the 1990s, sales is now in its own ascendancy. As marketing becomes more complicated with customers informing themselves via the Internet and social media, selling as a function (finally) has risen to a high level of importance in most B2B organizations.

Today, the strategic purpose of selling is to create clarity for a customer, helping them to answer the question "what should we do?"

As a result, the selling function has risen to the other "C-level" functions. The title is only now catching up.

It's still an unusual title, almost non-existent a few years ago. Do a search on Google or any of the career sites and "VP Sales" dramatically outnumbers "CSO." I've run across this title only a few times:

• AMD and Intel have CSOs
• Don Grantham, recent addition to HP, uses the title
• Mary Delaney was CSO at CareerBuilder before she became president of Personify, a CareerBuilder subsidiary
• Paula Shannon has been CSO at Lionbridge for some time
• Scott Rudy, former VP of Sales at salesforce.com, is now CSO at Savo Group

I expect the title to become more common (and embarrassingly, I should have posted this particular blog entry before I assumed the title!). Sales is now a critical function of any B2B organization and the sales organization needs a seat at the executive table, with operations and finance and marketing and people (what had been called HR).
With sales at the executive table, customers have a direct pipeline into strategic decision making. Sure, marketing organizations are chartered with collecting and delivering the "voice of the customer" but there's nothing like the voice of someone who has voted with his or her budget and has substantive input.
As a newly minted Chief Sales Officer, I'm learning the responsibilities inherent in delivering this input from the field. As a simple cost center, sales was less accountable for the results of their demands. With this greater visibility comes the responsibility of making the best decisions for the company and the customers.
I expect that my fellow CSOs are finding similar responsibilities. At the table with the rest of the executive team we represent the view from the outside. At the same time we have visibility into other company activities in a way sales never had before.
Personally, I welcome that responsibility. Together we are stronger!
Thanks
 Lee