The last few months have been somewhat testing for us all, but as we begin to see the first glimmer of light at the end of the tunnel our collective thoughts are turning to how we re-build from here. I would contend that right now there is nothing more important in underpinning your recovery than your existing contracts.
We all know the cliché statistics such as:
‘It is six to seven times more expensive to attract a new customer than it is to retain an existing one.’
‘The probability of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer.’
But despite this long-accepted wisdom the simple reality is that businesses are nowhere near as good at account management as they are at new business pursuits.
I get it; new business is often the glamorous bit – the new name, the thrill of the chase, the high-profile support from the board, and sales being given almost whatever it takes to get the big deal over the line. Against this backdrop, nurturing your previously won customers risks feeling somewhat pedestrian – it’s account management’s Bognor Regis seafront to new business’s Monaco harbour…
That’s not to say that those in account management don’t have the same level of skills, passion and enthusiasm as their new business counterparts, it’s just that rarely are they given the same level of tools and company support to help them thrive.
Compare and contrast: in the pursuit of a new business opportunity a salesperson will (probably/hopefully!) have a huge toolbox to play with including a fully mapped pursuit process with clearly defined stages in CRM, a smorgasbord of scoping documents, discovery workshops, reference site visits, calls with their company C-suite, bespoke presentations, videos and case studies all culminating in a personalised proposal and pitch to get it over the line.
And what do most account managers have? Typically, it’s a standardised and often uninspiring monthly or quarterly account update presentation, possibly a KPI report or two and in all likelihood an internal account plan that gets dusted down from time to time when their manager asks to do a review of progress in the account. Given that these existing customers are likely worth anything from tens of thousands to tens of millions to each business every year, this is utter madness.
Too often we see account review meetings with customers being heavily biased to the tactical, with a focus on missed KPI’s and problems that need solving, with occasional strategic discussions happening when more senior management get wheeled in for a quick chat – but that is often only when it’s already going wrong and needs major intervention to get back on track.
Over the years the Bid-IQ part of our business has been called in time and again to help companies try and re-bid and defend a contract that they’ve had for years. Typically, these contracts have come out to market due to the customer feeling unloved, or simply underwhelmed that the delivery hasn’t lived up to the big promises made during the new business pursuit. This is not the fault of the account managers – it’s the fault of the business for not setting them up for success.
Hand on heart, how many of you reading this can say that your business regularly PROVES to your existing customer why they made the right decision to appoint you? Can you demonstrate how you are driving and delivering continuous improvement and innovation in each of your contracts? Have you got a documented and shared vision with each of your most important contracts for them to measure you against? Can you measure and report on the strength of each individual relationship – not just which KPI’s you are or aren’t hitting? Do you have an agreed customer success plan that your teams are delivering on tirelessly to ensure the success of your customer?
If you’re shuffling uncomfortably at the above questions then my warning to you is a stark one – we’re about to face a period where every Pound/Euro/Dollar of spend is going to be scrutinised and every one of your accounts is at risk. And don’t forget they’re all being courted by these super-supported new business types who are deploying every tool and every story at their disposal to tempt your customer away.
Relying on an internal account plan, an account manager and regular update meetings will not ensure success, and puts every one of your key contracts at risk. In the new paradigm that we’re all entering the basic account management tools are simply not going to be enough.
So if you’re considering where you invest time, energy and money right now for the maximum return, please don’t throw it all at new business, as you will get far greater returns by backing your account managers to innovate, improve, nurture and build on what you already have. This is the bedrock of your business.
And if this has struck a chord and you want to look at a genuinely radical new way in which you can transform how you both look after and grow your key accounts, whilst giving a whole new level of data and accountability to your own business, well you’re in luck because we’ve been developing just the thing. Give us a call to find out more.