Why Hyper-Growth Starts With Your Existing Clients

Why is it so hard to see that real sustainable growth starts with keeping and expanding relationships with the clients you already have?

Do we need to rewire our brains to focus as much on client retention as we do on landing new logos?

The answer is yes.

And which AI tools can the AI Knowhow team not live without?

Find out on this year’s Snake Draft.

Hi, I’m Courtney Baker and this is AI Knowhow from Knownwell, helping you reimagine your business in the AI era.

As always, I’m joined by Knownwell CEO, David DeWolf, Chief Product and Technology Officer, Mohan Rao, and NordLite CEO, Pete Buer.

But first, is Meta’s push towards AGI something we should all be keeping an eye on or just Metaverse 2.0?

Let’s find out with Pete Buer.

Pete Buer joins us once again to break down the business impact of the latest in AI.

Pete, it looks like Meta is swinging big again.

The company just announced a new research lab focused on developing super intelligence and they’ve tapped Scale AI’s Alexander Wang to lead the charge.

What’s the takeaway here for business leaders?

So just to recap on the news, Meta’s reportedly committing billions in resources to pursue artificial general intelligence, AGI.

So that’s not a familiar term of arts.

It’s the next wave of super intelligent AI capable of performing at least as well as if not better than humans at many tasks.

It’s super ambitious and I guarantee you it’s sort of a north star on the vision board of every company that’s working on AI right now.

There’s kind of a first fast, maybe a little bit lazy takeaway right out of the gates.

So here we have Meta investing heavily in AI leadership.

We’ve got OpenAI building out social networks.

Elon Musk still chasing both with all his free time.

It’s to me starting to look like big tech is, big tech companies are kind of looking more like one another than different.

Maybe there’s some strategy there that they have to cover all the bases on behalf of customers or there are questions about the product S-curves for each of the different individual components of the business and they need to round things out with the next biggest and growing thing.

There’s pressure from investors to be involved in the right stuff.

Anyway, for whatever reason, it feels like a small set of really big companies that are looking more and more like is starting to dominate this space.

There’s something sort of uniquely interesting about the Meta investment in this article.

However, this fellow, Alexander Wang, founder of Scale AI, leading infrastructure player in the AI boom.

And so, interesting to Meta to bring him and the company on to help Meta build out its AI.

But also, maybe there’s a capability that Meta can develop in helping customers build out their AI from an infrastructure perspective.

I think takeaways for leaders are just that there’s a broadening array of companies that can help you with whatever your AI needs are.

It wasn’t that long ago, we started having these conversations and the scatterplot of companies focused on different things felt quite spread, a lot of different one-off applications and now you can kind of turn to some companies who can handle a lot of your needs soup to nuts.

So, know who they are, know what’s different to the extent that it is different about their offerings, know how they price.

Just spoke to a fellow who reminded us that AI offerings are changing daily and pricing is changing daily and so you really have to keep track of where things stand.

Then especially on this artificial general intelligence, AGI question, try to get a sense for what’s real and what’s not real about it so that if there is meant to be application for you going forward, you’re really super clear on what it is, what the risks are and what the possibilities are.

Pete, I think at the end of this, we only have to look to Facebook’s Metaverse, which is how they got their new name, to know that not all big tech news plays out like they think.

But as always, thank you for keeping us up to date on the latest in AI news.

Thank you, Courtney.

I sat down with David and Mohan recently to talk about why the key to hypergrowth actually lies in keeping the clients you’re already working with.

David, Mohan, welcome back.

So, here’s the question.

I think more executives should be asking, what if growth isn’t about chasing more?

What if it actually starts with the clients you already have?

I don’t know how you two, how that lands for you, but I kind of get the sense we’ve been sold a story that growth means net new logos and pouring more and more fuel on the sales engine.

And listen, I’m a marketer saying this, okay?

But that story doesn’t really hold up so much in today’s market.

So today, I wanna dig into that more with the two of you and really talk about the real growth driver that I sense most companies are under utilizing and what it takes to turn retention and expansion into your fastest path to scale.

So, David, Mohan, how does that, just like out of the gate, how does that land?

Do you, does that sentiment resonate with you and the professional service firms you’re talking with?

Well, Courtney, let’s just start with the data, right?

The data says that organizations are spending between five and seven times as much on new business development as they are on client expansion and growth and retention, right?

I mean, just that blows my mind because if you think about the professional services playbook, the playbook is the vast majority of professional services firms have relationship driven land and expand strategies where, get this, 80 to 90 percent of your revenue comes from existing accounts, right?

That is just flat out how you run a professional services business.

Yet, the data says not only is that where we’re spending our money in the 10 percent, but it also shows that it’s that 10 percent that we have operationalized, right?

That we’re driving by data, that we are driving with rigor, we have whole systems and machines around, right?

The old saying, you manage what you measure.

We measure the pipeline and we measure that, but we don’t measure commercial health.

We don’t measure what is the strength of our existing portfolio.

And because of that, you can see clear as day as we’re out talking to organizations, they don’t manage it either, right?

There is not rigor and discipline around how you manage those existing relationships.

Can I ask you a clarifying question right now?

Because I think everybody listening, when you say we don’t measure our client health, our portfolio health, I think they may be saying, well, we do.

We have a red, yellow, green, we have CSAT.

We just note on what you mean by kind of-

Well, I think each and every one of those, there’s no doubt, right?

There’s three fundamental band-aids.

That’s what I’ll call them.

Three fundamental band-aids people use because they can’t measure their portfolio health, their commercial health, their client health, right?

They use what you just said, anecdotally reporting red, yellow, green on a spreadsheet, and they typically ask their team to do that on a monthly or a quarterly basis.

Okay?

Number two is a net promoter score.

And again, typically at most, we see organizations putting out an NPS survey once a quarter, maybe at the end of a project in between, right?

Those types of things.

And then number three, you see customer satisfaction scores.

Sometimes people do those monthly, but rarely.

At best in all three of those, what do you have?

You have quasi-measurements.

They’re not really measurements of what’s actually going on, right?

But they are a way we quantify qualitative information to make us feel like we’re measuring.

They’re anecdotal and they’re episodic, right?

It is reporting from somebody, it’s inherently subjective.

And on top of that, we only get the data once a month at best.

And in the vast majority of situations, once every three months, that is not an operational metric.

That is not a metric that I have execution from.

That’s what I mean by if you’re not measuring it, you’re not managing it.

Those aren’t real measures of actual portfolio health.

Yeah, it makes no sense that we don’t look at existing clients as your growth lever, right?

Because there are so many advantages when you look at your current clients as opposed to new logos.

One is there’s a lower acquisition cost, right?

So they’re already a customer.

You can offer more tech-enabled service, data-driven personalization.

You can use more loyalty to promote your brand advocacy.

There are so many things that are built in, but yet gets ignored.

Hey Mohan, just to add a data point, again, going back to the research, you talk about just the efficiency of gaining new revenue in your client base.

I think the stat is that a new client costs between five to 25 times more than just keeping one.

Forget growing an existing one, right?

Then just keeping one, right?

So, I mean, think about this math, right?

If I need $1 of revenue at the beginning of the year, and I lose an account in January, that is doing $1 of revenue, all of a sudden I double what I need in new sales, right?

And it’s guaranteed that that is lost.

Whereas I book a new client, if I have the same success to offset my downturn and my luck, well, I have the chance of having $1 for the remainder of the year, and it’s only offset it, right?

So, even though it costs more, it’s so much more efficient, it’s just the math doesn’t work out.

And if you are trying to fill a leaky bucket, and that leak is even the exact same size as the hose pouring water in, you are not growing, you’re actually going backwards.

And so, to have hyper growth, to have consistent growth, to have predictable growth, to have any sort of growth, we’ve got to do it.

And what I fear is, I think a lot of professional services leaders have just become complacent.

They’re just, you know what, industry churns clients about 16%, right?

I’m doing great because I’ve got 12% attrition and churn amongst my client base.

No, no, no, no.

Every single point that you save of churn that doesn’t happen, is helping you become a more predictable machine, a hyper grower.

And I think organizations, remember, it’s 80 to 90% of your revenue.

Organizations that invest sufficiently there, create a machine out of their commercial management system, and really drive the discipline and the rigor that we apply to sales, to serving our clients and growing those accounts, and keeping those accounts and delighting accounts.

Those are the organizations that in this soft economy right now, where services firms are struggling, they’re the ones that are growing.

I know firms that are growing 27%, 34%, 46% in one case, a company at scale.

Why are they doing it?

Because they crush it in this regard, and their net revenue retention is over 120%.

That is the key to growth, and we ignore it.

We don’t measure it, we don’t manage it.

So David, I think those are, everybody listening, I think would be like, I want that.

I mean, I don’t think we would talk to any professional service firm leader that wasn’t like, I want that.

But for whatever reason, it seems really hard to change the mindset.

So what do you two think needs to happen to really make that?

Is it just like, this is the way it’s always been done, it’s hard to break that cycle?

What is it that makes it so hard?

Now, I think there are three reasons why this is the case, where leaders look to new logos as opposed to making NRR as a growth metric great again, right?

So that’s what this episode is about.

It’s NRR as a growth metric.

I think the three reasons are, first of all, that is, when you think about the phrase, pressure to demonstrate growth, you automatically think, whether it’s from investors or leadership or markets, that it’s about acquiring new logos.

So it’s really a cultural expectation about what growth means.

I think that’s reason number one.

Reason number two is you see this especially in SaaS companies, but you also see this in services companies where the way you’ve organized yourself into sales and customer success, they have distinct goals, very distinct incentives.

Sales is rewarded for new business, customer success is rewarded for retention and satisfaction, and disproportionately, I must add.

So you already set an organizational incentive towards new logos versus NRL.

So it’s an organizational silo and how the incentive structures are in place.

I think the third and really important point is there is an underestimation of the potential with existing clients.

Because you’re dealing with problems every day, you automatically say the grass is greener on the other side, so let’s go to the new logos as opposed to dealing with the problems you have, solving those, and also educating that these are real problems that happen in any service relationship and you’re on top of it, right?

So just sort of underestimating the potential of your current clients.

I’d say those are the three reasons why we don’t focus on this as much.

And I want to double down on that last one and maybe add a fourth that stems out of it.

Because of that reactive nature, where we’re in firefighting mode all the time, where we’re managing by gut, not by data, where we just have this reactive culture that is doing the best to keep up, right?

How many leaders do I talk to that just feel like they have no ability to get ahead and proactively manage it?

They’re exhausted, they’re tired, they feel like…

You hear all the time about professional service organizations aren’t scalable.

Well, that’s shorthand for outsiders that are looking at these CEOs and CEOs and saying, these guys are exhausted all the time, right?

They’re trying to push a wet noodle and it’s not working.

And we blame it on people, but the reality is the people, part of that is these things are hard to manage because they’re hard to measure, right?

And so in that world, we don’t know the right things to do.

So we just do things and react to the clearest signals that we have instead of getting ahead.

And I would argue that instilling this management system into your organization and saying, we are going to figure out how do we measure, how do we manage, how do we instill the same amount of discipline and rigor that we do to our sales organization into how we manage our accounts and our clients.

That is hard work that is strategic and proactive.

And unfortunately, professional services firms just don’t get very proactive very often because they’re always just serving their clients.

And that’s not bad.

I like that they’re client-centric.

But let’s be a little bit more client-centric by inverting that and being proactive and doing the hard work to call time out and say, we’ve got to get out of this downward spiral.

I think it was the great Spurs coach Popovich who, wasn’t he the one that basically said, I don’t care how many points you score.

He had figured out for each player, if they just did like Mohan, if you are one of my star basketball players, you need 20 rebounds.

I want you 20 rebounds.

He basically had figured out how to measure the right things to result in a win, but it wasn’t that, it’s not sexy.

You know what I mean?

Like it’s much more fun to just think about baskets and celebrating the baskets.

And that’s what I feel like we have here.

It is fun when you get new logos.

Like there’s no denying that.

There’s a lot of excitement, but it’s actually measuring that Mohan gets 20 rebounds.

That actually matters and produces the win, the thing that you actually want at the end of the day.

That was not the perfect analogy ever, since I don’t know if that’s the right basketball team even, but I think it is.

I’m looking for this quote.

The closest quote that I found is, now you look at a stat sheet after a game, and the first thing you look at is the threes.

If you made threes and the other team didn’t, you win.

You don’t even look at the rebounds or the turnovers or how much transition D was involved.

You don’t even care.

That was Greg Popovich’s comment on the status of the game today.

Totally right.

I mean, ultimately, it is complex instrumentation, as the great Greg Popovich said through you.

No, but seriously, it’s a great one because, you know, this is complex instrumentation.

You kind of sometimes, we all know, you manage what you measure, but you also sometimes measure what you can just measure easily.

And you don’t kind of think about what actually you should be measuring.

David, Mohan, thank you as always.

Thanks.

It was a lot of fun.

I feel like you got me on a soapbox.

I did.

It was great.

One of my favorite things about summer is being outside with a good book.

And if you’re anything like me, even when you’re on vacation, sometimes you like a little something or really to really sink your teeth into.

So we have developed the playbook for scaling and growing your services company in this AI era.

You can download our brand new playbook for AI-powered strategies for scaling professional services.

You can get it right now at knownwell.com/scalingwhitepaper.

If you’re a long time listener, you may recall the AI snake draft we aired many moons ago.

It’s a new year.

So I wanted to re-visit the draft to see which players we’d consider ready for prime time here in the summer of 2025.

David, Mohan, we’re going to do something different here today.

Usually, we are talking about the practical application of AI and professional service firms.

But today, there’s lots of drafts happening out in the world, but we’re going to have our own draft.

We are going to be drafting our favorite general use platforms that we love and can’t live without.

Full disclosure, you can not pick our AI platform.

Knownwell is off the table, everybody.

It is already won all the awards.

So today, we can’t pick that, David and Mohan.

I’m going to kick us off.

Again, Snake Draft, I will, y’all know how a Snake Draft goes, right?

It’s one, two, three, you know, then three gets to go twice and okay.

So I’m going to go first because I picked the roles and I will say for me, the tool I can’t live without, and I don’t think anybody’s really going to be surprised about this, but I’m going to go ahead and take ChatGBT off the table with the first pick.

And I will say at one point, I thought there’s going to be so many options.

It’s like all the models were competing.

I really thought some of these other ones were probably just as good.

I actually feel like now ChatGBT has won my heart here, and both personally and professionally.

Listen, I played Mahjong last night.

I took a picture of the tiles I had and the rows or the hands to find out which one I should pursue.

Gave me a great, I learned a ton last night.

So just one example of the many ways I’m using it all day, every day.

Okay, so ChatGBT is off the board.

Mohan, you get to go next.

You know, these days I’m really loving Claude by Anthropic.

You know, it’s got so strong when it comes to summarization, reasoning, code generation and being human-like, because when you, not to trash your pick, but you know, sometimes reading the ChatGBT, ChatGBT output is reading like a car manual, right?

Where is the car manual with M dashes in there?

And I love Claude.

Oh, that is so interesting.

Okay, so…

The only reason Courtney loves it is because it has so many M dashes.

Courtney is actually the only person I know that uses as many M dashes as ChatGBT.

I’m having to stop now so people don’t think I am ChatGBT.

Okay, David, what’s your pick?

I guess I get two picks in a row, right?

Because you are the sneak chat fan.

So, okay, you guys are in trouble.

I’m going to take the good ones off the board.

You’re going to be mad at me.

I’m going custom GPTs with deep research.

Okay, are we going to allow that, Mohan?

You have to allow it.

It’s…

I don’t know if you don’t remember the beginning of this game, but I did say I made the role, so…

I mean, he’s under the second apron, so he can do that.

Okay, so custom GPTs.

But custom GPTs with deep research, like so super powerful.

Oh my gosh, the deep research that they do and the ability to package that up in a custom GPT that repeats pretty robust instructions and I can prompt quickly for new things is just like rock my world.

It’s super helpful and increased my productivity a lot, so I love it.

I’m going to go number two.

I’m going to surprise both of you.

You’re going to be mad at me once I take this, because you can’t use it anymore, because it’s mine.

No, don’t do that.

Grammarly.

That is lies.

That’s lies.

Mohan, do you believe this?

No, no, absolutely.

I think it is just a pick to block our team’s progress.

I know.

We should have known this.

He was going to be really competitive with them.

David DeWolf, do you have an active subscription to Grammarly?

I do.

Wow.

Did you know that, Mohan?

Because I get his documents lately, and my Grammarly is going off the charts.

Someone without Grammarly sent it to me.

It’s actually the one thing about Grammarly that drives me absolutely nuts is it doesn’t know what it’s recommended, and it often recommends on top of what it recommended.

So you’ll see that actually a lot.

You can have a clean document and then come in later, and it will change.

It’s the predictive nature of AI versus the deterministic nature.

So one of the reasons I hate Grammarly, even though I really value it, is because for those of us that can’t stand red dots on our phone and our icons, I always have squiggly lines and my OCD goes crazy.

Yeah.

Okay, Grammarly, I can’t believe you stabbed is in the heart there with that one.

Okay, Mohan, you are up.

You know, with the next pick, I’m gonna take Perplexity.

You know, I love Perplexity for multiple reasons.

It’s deep research, it’s source verification, and clear and concise.

I can read through Perplexity very quickly.

I love that user-friendly interface.

Also like their content summarization.

So I’m gonna go with Perplexity and write this into the championship.

Mel Kuiper just called and said that was next on his draft board, so good pick.

Highest value there, Mohan.

Okay, this is gonna be a strange one and probably just kind of a sign of the times in marketing right now with our team, but we just upgraded our Asana, because we are a startup here at Knowwell, but we’re really, how long do we get to say we’re a startup, guys?

Is that indefinitely?

It’s a mindset.

It’s a mindset, it’s a mindset.

But we have been making some new operational upgrades over on the marketing side, and we’ve upgraded to Asana AI, kind of the next level up.

And so, we’ve been exploring more of those capabilities with just helping us with the kind of operations in that department and kind of moving a task forward.

So, I’m really interested in exploring that more.

And so, I’m going to take that one, even though I know you two wouldn’t take it, but also I’m the last pick anyways.

You can have it.

Milk Kuiper just called.

It wasn’t even on his draft board.

You don’t even know, do you know how to spell Asana?

I don’t, I don’t want to.

Okay, I would like to remind you, David, that you took one of our favorite picks and then just sent it to the D-League by bashing it the whole time.

That’s right, it’s locked up under contract and you can’t use it.

Okay, well, thank you two for having a little fun today.

Hopefully, maybe there’s a few things out there that we talked about that if you’re curious about trying out for yourself, like Grammarly, not sponsored, but should be.

Okay, David, Mohan, thank you as always.

Bye.

Bye.

Thanks as always for listening and watching.

Don’t forget to give us a rating on your podcast player of choice.

And we’d really appreciate it if you can leave a review on this episode.

At the end of each episode, we like to ask one of our AI friends to wait in on the topic at hand.

So, hey, Claude, sorry for not choosing you today, maybe next year.

How you been?

Today, we’re talking about why hypergrowth actually starts with your existing clients.

So, what do you think?

I think that makes total sense.

Your current clients already trust you and know your value.

So, they’re way more likely to expand their business with you or refer others than cold prospects are.

It’s probably much more cost-effective to grow revenue from people who already believe in what you’re doing, rather than constantly chasing new leads.

And now, you’re in the know.

Thanks as always for listening.

We’ll see you next week with more AI applications, discussions, and experts.