One of the biggest untapped opportunities to increasing sales and profit is growing your existing accounts. Consider:
- Retaining current customers is 6 to 7 times less costly than acquiring new ones (Source: Bain & Company)
- Repeat customers, on average, spend 67% more (Source: Bain & Company)
- 60% of companies believe they should be generating 25% or more revenue from strategic accounts (Source: RAIN Group)
The question is not if you should be selling more to your accounts, it's how should you do it.
Here are 6 tips to get you started:
Select the Right Accounts: Not all customers are created equal. Certain customers—whether they're bigger, in a certain industry or location, a stronger relationship, or just more open to new ideas—have greater opportunity for growth. You can even ask customers if they would like to engage in a more strategic relationship with your company. In our experience, most buyers react positively when approached with this idea, and become more likely to entertain additional conversations with you.
The first step in your account growth process should include targeting those accounts with the greatest opportunity and then developing a specific plan for each customer. A spray and pray approach does not work for real account growth.
Know Your Customer's Business and Strategic Agenda: I'm not just talking about the part of the business you're involved with, but their entire business. What are their corporate priorities for the year? What are the big hurdles they are trying to overcome? What are their goals? Who are the key players?
Sellers and account managers often say to us, "We know our accounts' business very well." But when pressed, they often have a long way to go when it comes to strategy. If you can uncover your customer's priorities, you'll have a much better understanding of where and how you can add value—and the areas in which they are willing to invest more. Simply by having conversations about the big picture, you're likely to uncover opportunities where you can help.
Strategize Internally: Growing accounts takes an investment of time and resources. You can't expect to call an account, introduce a complementary product or service, and have them sign on the dotted line. Serious account growth requires a well thought-out plan that is customized for each account.
For large accounts—both existing and new—we implement a value discovery session. This is a session where we brainstorm ways that we can bring additional value to our accounts and develop a plan to do so. During this process we bring together a team of internal resources to cover each of the 8 roles required for account growth. Bringing together the thoughts and perspectives of your internal team can be tremendously valuable for your accounts.
Be Proactive: We can't tell you how many times one of our clients has shared a story with us about how a competitor swooped in right under their nose, taking business that they were well equipped for. This was always because their customer either didn't know that you offered that particular product or service or because they simply forgot.
The best targets to market to are your own customers. You cannot over communicate with your customers about the value and capabilities your company offers. This does not mean you should send endless product sheets and pitches to them. Instead you want to stay top of mind by building strong relationships with your customers and bringing them valuable insights and ideas.
Know the Full Suite of Products and Services You Offer: Sellers know what they sell and sell what they know. Too often individual sellers know too little about your company's full set of products and services to be able to uncover need and speak as a credible expert.
This does not mean you need to know the ins and outs of every product and service you offer. You do need to know the triggers and questions to ask to uncover needs in the areas where your company can help. Once you do this, you can bring in a colleague who works in this particular area. But it's up to you to uncover the need and to be able to speak enough about the particular area to pique the customer's interest.
Implement a Process: Success with growing accounts requires a process. If you don't have a process in place for growing accounts systematically, you're leaving it to chance and you won't capitalize on the vast majority of opportunities.
In our research we found that "having an effective strategic account management process" was one of the top challenges faced by average and below-average performers. In fact, they were 2.7X more likely than high performers to report this as challenging.
Growing Accounts in Action
A client of ours is Woodard & Curran, an 800-person, integrated engineering, science, and operations company. As the firm grew and expanded the diversity of its offerings, they faced the challenge of maximizing value for clients across their full set of capabilities.
They saw a great opportunity to grow accounts, but knew they needed a specific and focused effort to make that opportunity a reality. After implementing RAIN Group's strategic account management process, they saw significant growth in named strategic accounts. In the named accounts where the method was applied, the 4-year compound annual growth rate was a whopping 110% (compared to 7% across all accounts).
In a single account alone, sales grew from a quarter of a million dollars to $3.5 million as a direct result of implementing the strategic account plan.
This is just one example of a company embracing an account growth plan and implementing it well. The fact is that you can do it too, and following these 6 tips will help to get you started.