Stop Leaving Money on the Table!
When companies plan for organic growth, they often look exclusively at customer acquisition (the “hunter"/sales function) and overlook account growth (the "farmer”/account management function).
In this case study, a company that compensated salespeople (hunters) based on new-customer acquisition did not correspondingly incentivize the account managers (farmers) for finding the full revenue potential of each customer relationship. Instead, the account managers oversaw the equivalent of repeat orders and resolved customer complaints. With very little additional training and partnership-oriented leadership, this function can often fully exploit the beachhead established by sales.
This is one in a series of case studies highlighting “Key Questions and Course-Correcting Quotes” taken from 20 years of B2B customer insight projects. All names are fictitious, but the situations are real. Case studies paint a picture of how important it is to learn what your B2B customers think — but aren’t saying.
These are real-world examples of how soliciting and acting on customer feedback has helped companies hold onto customers longer, grow relationships bigger and pick up new business faster.
Case study: “Stop Leaving Money on the Table!”
Key Question (asked of an operations manager, the vendor’s chief contact in this 6-figure relationship)
“Are there products or services ‘LiteManufacturing’ should add?”
“We buy kits from LiteManufacturing, but we have to buy components from another vendor. I’d like LiteManufacturing to start offering components.”
My Client’s Quandary
This was a simple baseline feedback project, not a treasure hunt designed to grow revenue, yet there it was: money being left on the table. I knew LiteManufacturing sold kits and components; was there a reason they hadn’t told this customer?
I called the account manager. He immediately walked his customer through LiteManufacturing’s full offering and picked up that company’s component business. The president then mandated all account managers reorient the 80 percent of customers who represented 20 percent of revenues.
It’s common for customers to only know what they already buy from you. This can happen when:
- The prospective customer wasn’t listening during the sales process
- The salesperson stuck with details about the initial product or service for fear of “talking past the sale”
- There was turnover on the customer side, and the new contact person only knows about current purchases
As part of onboarding and the formal/informal account review process, the relationship owner should review everything the vendor offers. When there is a personnel change on the customer side anywhere along the chain of command, from the day-to-day contact to the owner of the budget, it’s smart to treat the new person as a new customer. You want them to be familiar with your entire offering and to recognize that their relationship is important to your company. When there is turnover in relevant positions on your side of the relationship, it’s smart (and often strategic) to have the new person introduce him/herself up and down the customers’ chains of command.
There are three costs to underselling to existing accounts:
- Leaving money on the table today (loss of incremental revenue)
- Creating a “beachhead” opportunity for competitors (failure to develop and defend one-stop relationships)
- Weak positioning (failure to create partnership-level standing with customers)
Vendors unintentionally pass on the opportunity to shift from vendor to partner when they fail to incentivize account managers to fully develop customer relationships. This can also slow the development of new products or services leaving the company to play catch-up with more aggressive competitors. The first step is to put a partner-oriented leader in charge of account management.
I categorize projects as assessments, investigations, treasure hunts or rescue missions. This project was an assessment turned treasure hunt. The client’s question was “Where do we stand with our customers?” I’m always on the alert for outliers, because I’m trying to have the same conversation with customers as the company president would if he/she had the time. No president is going to overlook money that’s being left on the table!
This post originally appeared on ezonearticles.com and is published here with the permission of the author.
About the Author
Ann Amati, a Principal at Deliberate Strategies Consulting, helps companies use guidance from their current and past customers to grow future sales. She has a 20-year track record of using deep-dive interviews to create positive turning points in her clients’ relationships with their customers.
In her national practice, Ann has clients who sell millions to companies that make billions and sole practitioners/LLCs with more modest practices.
Contact Ann Amati when you want to know what your customers think. You’ll start making faster, more confident decisions.
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