Suppose your small team sells a proposal tool. Independent consultants sign up and pay on their own, with little need for support. Agency customers take longer to close, but bring in more renewal revenue.
Growth has stalled. You're thinking of building more features for agencies and finding more customers like them. That's where next month's time and budget would go.
Forget the Funnel described research on Invoice Simple, an invoicing tool with plenty of signups and ongoing experiments, but too few signups becoming long-term customers. Their research found two needs. Some users simply wanted an invoicing tool. Others wanted to replace documents and spreadsheets and invoice from their phones on a job site.
According to Forget the Funnel, that second group had the highest lifetime value (LTV), even though it wasn't the easiest to convert.
Back to your proposal tool. Who accounts for that higher agency revenue?
If it mostly comes from one long-standing customer, look at what happened to the other agencies. Compare those that started paying around the same time. Include the ones that left, and give newer customers time to reach their renewal date. Then you can see whether several agencies keep renewing.
Similar renewal revenue can require very different workloads.
You might spend time connecting the tool to the first agency's existing workflow, then reuse much of that work for the next few. Or each agency might need a fresh setup and regular help from you. The setup and support records show how much work another customer adds.
Reusable work still costs money to build and maintain. Doing fresh work for each customer can be worthwhile too, if the fees cover it and your team can handle it. Look at the extra revenue alongside the extra work.
Where will the next agencies come from? The last few came through friends. Your sales records can show who else you can reach, and how much time and money it took to win a customer. That affects how much you can afford to spend next.
If several similar agencies keep renewing, you can handle their setup and support, and you have an affordable way to reach more, there's a case for putting more time and budget into that group. Weigh the longer sales process against what those customers bring in later.
If one old customer drives most of the revenue, and you're still unsure how much work the next one needs or where to find them, that case is weaker. Continuing the existing relationship and funding more development and sales for that customer group deserve separate decisions.
In a direction review, I compare payment, renewal, sales and support records for the same customer group. A high revenue total might come from several customers renewing at a service cost you can carry. Or one long-standing customer might account for most of it. Those records give you very different reasons to invest again.
That higher revenue is a reason to look more closely. To decide whether to find more customers like them, look at what it takes to win and serve more of them, and what you'd have left.
