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Lincoln Murphy
I focus on Customer Success-driven Growth

Thriving in a Tightening Economy

Not to be a downer, but word from Silicon Valley soothsayers is the economy is tightening.

This “tightening” was a key theme at two separate events I spoke at recently; one put on by an earlier stage VC and the other put on by a later-stage Private Equity firm for their portfolio companies. Specifically, they were interested in how their portfolio companies can continue to grow (rapidly), but in a more efficient way.

This is also why VC firms in UK and Brazil are bringing me in to talk to their portfolio companies in March and is the main theme of my completely, 100% SOLD OUT “Building an Engine of Growth” workshop in London on March 18.

The key things to remember in a tightening economy are:

  • Customers are going to be less likely to upgrade or otherwise buy more from you if they aren’t actually achieving their Desired Outcome
  • However, expansion sales to existing customers will become even more critical to a company’s growth
  • Land and Expand is no longer just for companies with internal network effects (like Slack or Box), but is an important strategy for even “enterprise” companies; lower barriers to entry, solve for initial value, and optimize for long-term growth. One CEO I talked to said he had a customer that signed up with a low 5-figure ACV that has expanded — within a year of being a customer — to a low 7-figure ACV! That’s not ad-spend or pass-through revenue, either… that’s ARR. Land-and-Expand FTW!
  • Companies that build systems and processes to ensure their customers quickly, consistently, and predictably achieve their Desired Outcome are the ones that will thrive and grow
  • Growth in existing accounts (expansion of capacity/seats, add-ons, upsells, cross-sells) does not happen in a repeatable, scalable, and predictable way without operationalizing the customer journey
  • Customer Success, in its various permutations (from an operating philosophy to an organizational function), is critical to this process, but creating a logical ascension model that works at scale is a strategy that requires cross-functional cooperation and proper instrumentation to fully operationalize

Of course, those things also make sense in a loosening economy, whether your company is funded or bootstrapped, etc.

Now go thrive!

And follow me on Twitter @lincolnmurphy