What have you done for me lately? Overlooked elements of account management
Feb 06 2018
Existing customers are the life’s blood of many business models. In the 2017 World-Class Sales Practices Study, sales organizations reported that, on average, 68% of their revenues came from existing customers, with 58.7% coming from just the top 20% of their customer base.
There are many benefits to having a strong book of existing customers, not just the obvious revenue numbers. Sales cycles for new opportunities within an existing customer are generally half as long as those for opportunities being pursued with new prospects, 8.0 vs 4.3 months, according to study participants. Not to mention that revenue from existing customers is more predictable and easier to forecast.
So it is not a surprise that sales organizations place a strong emphasis on renewals. And fortunately, most (70.4%) organizations feel fairly comfortable with their team’s abilities to renew existing business. However, to just focus on renewals misses an opportunity to leverage your existing account base as a catalyst for generating new business. In fact, over half of the organizations in the survey noted revenue expansion capabilities that fell short of expectations
- Generate referrals, 55% dissatisfied
- Ability to penetrate other business units in accounts, 56% dissatisfied
- Create and maintain case studies/references, 57% dissatisfied
(Percentages reflect those who said the practice “needs improvement” or “needs major redesign.”)
Sellers are well aware that existing customers are a great place to uncover new opportunities and to generate proof sources to assist in other sales cycles. Unfortunately they, and others with account management responsibilities, find themselves in reactive mode versus proactively growing a mutually-beneficial relationship.
Sales organizations should devote the same level of rigor to account management that they do for opportunity management. Yet, only 29.1% of organizations agreed or strongly agreed that they used a formal process for account engagement and developing their relationships with key account stakeholders.
Due to this lack of rigor, many buyers perceive a “relationship gap” in which the buyer, now fully committed to what they have purchased, feels less commitment and engagement from the salesperson who has passed off the relationship to an implementation counterpart or who has turned his/her attentions elsewhere out of the necessity to fill a funnel.
Before asking an account to act as a reference or make an introduction, a seller must first have earned the right to do so by fulfilling the promises made in the sales process. And for that 20% of strategic accounts making up over half the business? Clear strategies are required for relationship mapping, implementation support, internal sales and marketing programs, focused investments, etc.
Even if you are happy with your renewal percentage, you should take a closer look:
- How many accounts do you have that act as references for you?
- What is the state of your case study library? Do you have adequate coverage?
- What percentage of leads are sourced from referrals?
- How many fields of play/buying centers do you sell to in your main accounts?
That way you can make a better assessment of whether you are truly mining the power of your existing customer base. They can do more for you than just renew.
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