The Principles

The traditional B2B customer journey, ending with the selection phase, inadequately represents the ongoing relationship critical in recurring revenue models, where the real journey begins post-selection. This oversight necessitates a shift towards a bowtie model, emphasizing continuous engagement and value delivery beyond the initial sale, with the customer commitment at the center, expanding to include onboarding, utilization, and growth. Adopting a closed-loop, customer-centric approach that focuses on delivering recurring emotional and rational impact ensures sustainable growth in recurring revenue businesses, fostering long-term customer relationships and loyalty.

The typical buyer’s journey for B2B customers encompasses the stages of awareness, education, and selection, serving as the cornerstone of the sales process for B2B Revenue teams. This traditional approach, however, tends to conclude once a customer makes their selection, mistakenly treated as the end point of the customer journey. In reality, this selection marks the commencement of a much more extended and impactful relationship between the customer and the company, particularly in the context of recurring revenue models.

Recurring revenue teams often fall into the trap of concentrating solely on their sales process, striving to secure a commitment from the customer but overlooking the subsequent stages where the real value for the customer is realized. This oversight neglects the essence of the customer journey, which extends far beyond the initial sale, especially in the SaaS industry where relationships can span several years. This ongoing relationship is critical for sustaining and growing recurring revenue.

The journey of the customer and the sales process in a recurring revenue model is more accurately depicted by a bowtie model rather than a traditional narrowing funnel. This model positions the customer commitment at its center, expanding outward to emphasize the importance of nurturing and expanding the customer relationship post-commitment. This approach highlights that the customer journey doesn’t end at the sale but rather enters into new phases of onboarding, utilization, and growth.

The modern Data Model for recurring revenue operates on the principle of a closed-loop system, ensuring a continuous cycle of improvement and refinement. This system allows for the identification of high-value customers in the later stages of the bowtie and then leverages this insight to inform and optimize the earlier stages. By identifying characteristics of successful customer engagements, Marketing teams can target similar prospects, creating a feedback loop that enhances targeting and acquisition strategies.

Central to the success of recurring revenue businesses is the recognition that sustainable growth is driven by delivering recurring impact to customers. This impact can be categorized into two types: emotional, such as simplifying processes or enhancing visibility for managers, and rational, such as increasing revenue or reducing costs. Understanding and focusing on the specific impacts sought by customers is fundamental to fostering long-term relationships and generating recurring revenue.

Adopting a customer-centric mindset is essential, shifting the focus from a company’s internal sales milestones to the customer’s journey and desired outcomes. This perspective reimagines the sales process as a series of stages defined by the customer's engagement and progress towards achieving their goals, ranging from initial interest through to achieving and expanding the impact of the solution.

Incorporating this customer-centric approach into the sales process involves redefining traditional sales terminology and milestones to align with the customer’s journey towards achieving recurring impact. By focusing on the customer’s perspective and needs at each stage, businesses can better support their customers in realizing the value of their investment, thereby enhancing satisfaction and loyalty.

Acting in the best interest of customers by helping them achieve their desired impact is the cornerstone of generating recurring revenue. This approach not only aligns with the financial goals of the company but also builds a strong foundation for a lasting and mutually beneficial relationship with customers.

In conclusion, the shift towards a bowtie model and a closed-loop, customer-centric approach in managing recurring revenue reflects a deeper understanding of the customer journey. It emphasizes the continuous cycle of engagement, value delivery, and growth beyond the initial sale, underscoring the importance of delivering recurring impact as the key to sustainable growth in recurring revenue models.

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