The revenue bowtie is a concept that describes the full revenue potential of an organization. It is based on the idea of breaking down silos between revenue-owning teams and looking at revenue generation as a company-wide goal, not just a sales activity. The bowtie also takes a holistic view of revenue from new and existing customers, with growth potential extending far beyond the sales pipeline.

One of the most important aspects of the revenue bowtie is its focus on customer retention for a large portion of revenue potential. Retention drives loyalty and expansion, and looking to the revenue bowtie provides a framework for driving both.

I recently learned of a company that found a very important product improvement that was based solely on data from customer complaints. By developing this improvement, not only did the company reduce churn from the at-risk segment, but it also improved the experience for its whole customer base. The new functionality introduced a new product path, which is allowing the company to grow beyond what it had originally expected.

Here are some specific ways that the revenue bowtie can be applied as a guide to improve customer retention.

• Think beyond the sale: Many companies spend disproportionate resources on getting a new logo, but do not focus enough time on nurturing their customers. Customer experience starts on day one, and adoption usually follows on a close timeline. Ensuring that you are set up for effective customer onboarding and experience is important, and proactively engaging and growing your customers long-term is key.
• Identify and prioritize at-risk customers: The revenue bowtie implies growth by existing customers, which requires assessing their health. By understanding the factors that influence customer churn, companies can develop targeted interventions to keep these customers from leaving. This may also allow companies to understand what is needed to grow, as risk can bring key trends to life.
• Define paths for further expansion: Growing a company and a product is about continued evolution. That evolution can come from customer insights or focus groups, and provide direct and positive customer impact. However, if it’s not thoughtfully implemented, it can also negatively impact margins and scale. Use the revenue bowtie to drive your direction, through initiatives that reach the highest potential with the lowest cost, as an example.
• Develop customer loyalty programs: The revenue bowtie implies advocates build businesses, and I agree. Loyalty programs can provide customers with valuable benefits, such as exclusive access to products and services for customers. In return, they can provide valuable insights, referrals, and more for the companies that serve them. Building an advocacy program can build external credibility and drive internal value.

The revenue bowtie is a valuable tool for companies to consider their full revenue potential, but to succeed in using it, you need to see customer retention and organic growth. By understanding where your risks are, where your resources can take you, and how to build advocates, you can start to see the revenue bowtie take shape in your business.