By Martin Schneider

In my last piece for DM Magazine I outlined “Why CRM matters more than ever” (July/August 2018 issue). And if anything, the need for modern and intelligent customer relationship management (CRM) solutions for all types of businesses has only grown more necessary.

This is because the technical drivers I mentioned, such as the Internet of Things (IoT), artificial intelligence (AI) and changing customer expectations have merged, in a way. Today, we are in what we at SugarCRM are calling the age of the “recurring customer.”

Beyond the subscription economy
When we use the term “recurring customer,” we are talking about a concept that goes beyond the core tenets of what is becoming known as the subscription economy, but is very much linked to it. The subscription economy, in a nutshell, is the idea that consumers are now “joining” rather than “buying” items and services. Think Netflix versus buying a DVD or food delivery services versus isolated trips to the local market. In short, we are paying fixed monthly or annual fees for goods and services that we can consume anytime and without friction and the suppliers, in return, get more predictable revenue and cash flow.

But this new economic model means we must change how we market to, and service, the customer. For example, business-to-consumer (B2C) models typically focus on the earliest stages of customer acquisition, e.g. advertising, marketing, conversion and purchase. But when the ongoing relationships become the most critical metric—keeping the customer for life— a new set of technology is needed.

This is where CRM comes in. After all, it has “relationship” right in the center of its name.

Key elements of recurring customer CRM
For both B2C and business-to-business (B2B) companies, focusing on recurring customer relationships may be major transformations. Most technologies in their IT stacks simply do not account for repeat billing, nor do they consume and manage the kinds of data or perform the types of analysis needed to better understand the health of recurring customer lifecycles. They also fail to provide the reminders and actions needed to insure sales and that other customer-facing employees reach out and properly manage and nurture recurring customer relationships.

So, how can companies best transform from traditional customer models to a recurring one?

First, investment must be made in advanced workflow or business process management (BPM). New BPM technologies inside modern CRM tools allows for more efficient management and automation of recurring revenue and customer models.

Second, data is king; no surprises here. Modern CRM tools are enabling businesses of all types to consume more data about their customers and about their use of the products and services to which they subscribe. This dovetails with the connected devices, smart machines and the general trend towards IoT we are seeing across all industries. By consuming this data inside the customer management system (and not in some data warehouse far away from the points of interaction), businesses can drive more timely reminders and offers and can prevent issues that may cause customers to churn. We have talked about this kind of customer data nirvana for years; as an industry we are finally making it easier for businesses to achieve.

The platform is key
None of this is possible with the right modern, extensible and flexible CRM platform. The first generation of software-as-a-service (SaaS) products are proving to be limited in scope, performance and the ability to manage the complex processes and data requirements of a recurring customer model.

You will need to deeply evaluate if your current CRM cuts the mustard. And if you’re new to CRM, make sure the CRM system you choose is a true platform and has the following attributes:
Clear and open application programming interface (API) set. Integration is everything, so make sure your CRM system has well documented and open API sets that are 100% free to access and are not limited in usage or scope;
Ease of configuration. Some systems require you to “break into code” to make a simple change

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. But in today’s world of cloud-based systems, you should find a platform that leverages configuration models, where you can drag, drop and make significant changes with clicks, not code. Beware of CRM solutions with proprietary configuration languages. Instead select one that offers simple and easy to understand methods for making most system changes so that non-IT resources can be administrators; and
Extension ecosystem. It is important to discover just how easy is it to integrate third party and legacy tools into the CRM systems. Make sure the provider has a marketplace where you can discover, test and consume new tools to further your customer experience initiatives.

Don’t forget about culture
While we have outlined a lot of technical aspects of creating a recurring customer management model, to ensure that it happens productively requires addressing the “change management” aspect of this fundamental shift.

Moving to a predominantly business acquisition model to a recurring customer model involves many behavioural and cultural changes. Like from “mining” customers, which drives extracting all their worth and, once depleted, finding the next seam or vein, to “farming” them, which focuses on nurturing. In the recurring model service drives sales; customers will buy based on their experiences, and that of other customers.

It is critical, then, to communicate how and why the business is making these shifts. Employees typically resist change, especially when it isn’t communicated as a net benefit to them. Also, to reward behaviours that support the change. Businesses that alter compensation or recognition of employees aligned with recurring customer goals tend to see greater outcomes. For example, compensating marketers on renewals rather than acquisition conversions gets them focused on retention/recurring concepts by design.

The benefits are worth the effort
At the end of the day, recurring customer models make sense. All studies show it can be up to five times more expensive to land a new customer than to retain an existing one. And loyal customers are more profitable and provide predictable revenue.

Of course, new business is still important, but a recurring customer model done right allows your business to trade on a reputation of customer success and exceptional experiences: which in and of itself is one of the most valued forms of marketing out there today.

Martin Schneider is head of corporate strategy, SugarCRM (

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