Poor account management may be costing more than you realize.
Some of the critical effects may go unnoticed until it is too late, costing you in many ways, including:
- Missing important opportunities in strategic accounts or, even worse
- Losing important accounts.
“55% of organizations feel that they’re not maximizing the potential of their existing accounts,” according to a TAS Group (now Altify) survey. So, many sales organizations are leaving tons of money on the table every year!
Many opportunities are being missed because new projects are not identified early enough in the process of account management. Research shows that when your sales teams take the process seriously right from the beginning, they’ll have a much better chance of building sales growth because they can identify the client’s needs, begin working with key players in the decision process and have some influence upon their decision criteria.
Here are a couple of the stats- according to TARP (Technical Assistance Research Programs) of the Office of the Special Advisor to the President of the United States for Consumer Affairs:
- When customers leave, 68% of them do so because they felt poorly treated.
- You’ll spend up to 5 times more to win a new customer than it will cost to retain an existing one.
Actively focusing on retaining customers is essential to successful account management.
In most marketplaces, there are multiple solutions for your customers, so it’s not unusual for them to move to a different provider without telling you why. Losing a customer not only affects your revenue stream, but it can also have a negative impact on your reputation, which can cause new prospects to pass you by. When customers defect, it strengthens your competitors and emboldens their marketing messages. Whether you are losing a one-time large sale or a recurring revenue stream, it hurts!
What might cause your sales team to fall prey to this kind of loss?
- Complacency – feeling that their current success is sufficient and will continue.
- Lack of insight – failing to conduct win/loss reviews to understand underlying causes of lost sales.
- Lack of focus on account management – management is busy with other things.
- Poor planning – ignoring account and opportunity management processes.
- Poor use of resources – expending efforts that don’t yield strong enough returns.
As a sales manager, what can you do about it?
Conduct win/loss reviews for all significant opportunities (i.e. having strategic impact on your business or over a certain dollar value). Identify the underlying causes of losses.
- Did your team miss critical changes in the account’s strategic direction?
- Did you miss a change in the key players?
- Did the competition influence the account’s decision criteria or process?
- Did your executive team provide sufficient support?
Assess the strengths and weaknesses of your account management approach. Review how your team does on each of the key elements of account management and identify areas that need improvement.
Analyze the effectiveness of your organization’s efforts in 6 critical categories with our Strategic Account Management Scorecard:
- Market focus – How well do you identify and respond to emerging opportunities and threats in your marketplace?
- Target accounts – How well do you apply key resources and what is the return on your efforts?
- Account strategy – How successful are your strategies for servicing and retaining key accounts?
- Account planning – Do your account plans effectively align your team on critical action items?
- Sales execution – How well do you execute plans and monitor progress to prevent bad surprises?
- Customer perspective – Do customers feel that you’re helping them be more successful?
Take advantage of account planning and management tools to better support your team in these areas:
- Strategic planning – prioritize accounts and opportunities, leverage insights into the marketplace, and allocate resources more effectively.
- Common approach to process – every team member participates in the same ongoing process for planning, implementation and sharing critical information.
- CRM modules – explore cost-effective tools that are built in (or can be added to) your CRM system (i.e. Salesforce.com) with minimal training time required.
- Customizable apps – look for user-friendly apps that are easy to learn and work with your sales approach so the team gets up to speed and reaps the benefits quickly.
- Visibility and access – make it easy for your team to respond quickly to customers and provide instant guidance.
By focusing on more effective account management, you can dramatically increase your ability to achieve sales goals and improve ROI while doing so.
Click here to learn more about our Account Planning app that works in Salesforce.com.
Click here to try our Strategic Account Management scorecard.