It was a grueling sales process. After hundreds of hours of planning and research, preparing a complex solutions proposal, and multiple presentations at different levels, we were awarded a new contract that dwarfed our existing business. The entire company celebrated the win. We were excited that this single new client would allow us to exceed our revenue budget for the year!
This was a prior company I worked with, but what happened next is all too common. For the first year, that business was a majority of our revenue and profit. Fast forward another year later and while we had managed to retain the account, the revenue was less than half of what it was in the first year. We had expected at least 15% growth in the account revenue, but orders were slowing and we were going in the wrong direction.
Here are the 4 critical mistakes (and many smaller ones) we made:
Mistake #1: Reasons for selection not known
The primary sales rep handed over the account (more like ‘threw it over the wall’) to the implementation manager who was responsible for delivering upon what was promised in the sales process. But the implementation manager only knew what was sold, not what problems the customer had in the first place which led them to choose us.
Following the implementation, it was then turned over to the account management team. An account manager was assigned and this time even less information was shared about the customer’s challenges.
If time has passed and people have changed, a Voice of the Customer survey is a great way to gather feedback regarding initial problems, reasons for selection, their experiences with your company and their expectations of your people, knowledge and services. Understanding and analyzing what your clients’ value will provide a powerful framework for making strategic business decisions, prioritizing projects and allocating resources.
Mistake #2: Account Manager not trained in account management best practices
Our Account Manager thought they had a good relationship with the Key Decision Maker, but the KDM was constantly challenging pricing and asking for discounts and made it difficult to build relationships with others within the company. The account manager also didn’t understand the key drivers, needs and wants through the customer’s eyes, and therefore couldn’t proactively develop and advance the relationship. (Related: Why Too Many Companies Make the Same Mistake)
Participants from recent virtual account management training led by Butler Street, shared the following key things they learned:
“I learned how to...
…ensure we are connected to the right people and know where we stand.”
…approach my client interactions to better engage regarding new business opportunities.”
…go beyond my customers operating reality to demonstrate value.“
…implement new techniques to more effectively communicate with our customers.”
…see the signs when business is at risk.”
…plan for a successful QBR and align the most important KPIs to the customer initiatives.”
…use ClientFit to stay focused on what matters most to my client protect and exponentially grow the account.”
Mistake #3: No objective measurement of client or revenue risk
Our account manager, as well as the leadership, missed the early warning signs. There was no official account plan. We hadn’t done a Net Promoter Score® survey. Client risk wasn’t measured. No one was inspecting the relationship, instead we just witnessed the revenue decline.
If an account manager’s primary responsibility is to retain and grow an assigned account or accounts, why do a vast majority of companies not provide their account managers with the tools and training to help with retention and expansion of those accounts?
For example, ClientFit® powered by Butler Street offers:
An objective measurement of client risk with a 3-point scale and resulting red, yellow, green status
A dashboard comprised of relationship and risk visualizations
A governance map to ensure key stakeholders needs are being met
Proactive notifications and action step recommendations based upon changes occurring
Reminders containing strategic action plan items that are due
Mistake #4: Lack of regular and effective Quarterly Business Reviews
It was difficult for us to get our contacts to attend the QBRs…when we had them. We missed one quarter and then the next. A year and a half into the relationship and we had only held one QBR. It was full of spend reporting and KPIs we thought they wanted to see, but we hadn’t actually asked them. We hadn’t translated the metrics to show the impact to their organization nor identified necessary actions to improve. It wasn’t structured to discuss the goals for the quarter, new initiatives in place, or what other services we could provide to help them improve their business results. (Related: Best Way to Align with Customer Expectations: QBRs; Where Will you be in 90 days?)
Client retention is a direct correlation to your company’s ability to deliver on what you promised during the sales process AND your ability to adapt to the changing needs of your client over time, personnel change, changing priorities and advancing technology.
Most companies do a credible job on the first half of that statement, but struggle on the second half due to the lack of tools and training. Don’t just watch the revenue decline and wonder what happened. Give your team the tools to plan and think strategically, measure and reduce risk, and advance their client relationships. Contact us now.