Getting Better at Growing Existing Customers - it’s Mission Critical

Exploring a Critical Capability That Most B2B Sales Operations Are Lacking - Growing and Expanding Current Customers is Beyond Important—it’s Mission Critical.

In most business-to-business markets, a company’s long-term health and competitive success can be traced to three fundamental capabilities:

• The ability to target and acquire more valuable customers.
• The ability to retain those customers for a longer period of time
• The ability to expand share-of-wallet with those customers

While certainly not ideal, these capabilities are often developed in a stage-gate fashion.

In the early days, companies will focus primarily on new customer acquisition.

Then, they’ll start thinking about retention as acquisition slows and competitors start poaching key customers.

And finally, they’ll shift their primary focus to customer expansion as the company’s need for growth outstrips the rate at which new customers are coming into the market.

However, developing these capabilities is not an easy task.

And making the necessary transitions is certainly not a given.

Growing Existing Customers Is a Priority

Research into leading sales operations shows that most established B2B companies clearly recognise the importance of selling more to their current customers.

While new customer acquisition is still the top priority being reported, growing existing customers is a strong runner-up.

It’s interesting to note that customer retention falls much further down the list of reported priorities.

At first glance, this could be taken as cause for alarm as retention is an existential issue for many B2B companies.

But it may also reflect some recognition of the fact that selling more to a customer can be an extremely effective retention strategy.

In fact, by focusing on expanding your business with current customers, you’re driving both account growth and customer retention at the same time.

Room for Improvement at the Account Level

While B2B companies recognise the importance of growing existing customers, they also report that their capabilities in this area are sorely lacking.

The vast majority report that understanding and identifying untapped account potential is not an area where they excel.

Rather, it’s a somewhat nascent—or even “aspirational”—capability, in need of significant improvement.

There is little doubt that this lack of visibility into untapped account potential goes a long way toward explaining why these sales operations are developing so few account plans.

Almost a third report developing no account plans at all.

And of the companies that do actually develop some account-level growth plans, over half report developing plans for less than 25% of their customers.

It’s also worth noting that further exploration of the research revealed a two-fold problem manifesting around account planning.

As stated above, account plans are typically only being developed for a relatively small portion of the overall customer base.

Compounding this issue is the fact that this small portion is typically comprised of just the largest current customers.

Stated another way, growth plans are only being developed for customers where the bulk of the growth opportunities have likely already been captured.

Lack of Accuracy at the Aggregate Level

Lacking visibility into untapped potential an account level, it’s not at all surprising that these companies also struggle to develop accurate growth plans at a territory level.

After all, how can you develop rolled-up territory plans that accurately reflect growth opportunities you can’t even see at the more granular and specific account level?

You can’t.

Not really.

In all likelihood, the best you can do is establish a territory growth target that’s somewhere slightly above last quarter’s run-rate and just hope for the best.

Of course, this capability gap around territory planning has implications for sales coverage and incentives as well.

Without an accurate understanding as to how the growth opportunities are actually dispersed across a given territory or region, it’s very easy to overload some reps, while starving others.

And if the magnitude or value of the growth opportunities is not well-understood, it’s difficult to provide proper incentives without overpaying.

Looking Toward Technology to Close the Gaps

Given the priority being assigned to the growth and expansion of existing customers, B2B companies are not content to simply hope that the capability gaps will somehow correct themselves, and most are taking proactive steps to better understand account potential.

While initial efforts in this area usually involve manual analysis and direct inquiry, the complexity and scope of the problem is shifting the focus to more automated technological solutions.

Even with all of the hype and fervor in the media around things like mobile enablement and social media prospecting, it’s interesting to see that those types of technologies do not appear to be incredibly high on the future shopping list for many B2B sales operations.

However, this is probably not a reflection on the efficacy of those particular solution categories.

More likely, it’s simply a reflection on the relative importance of growing existing customers.

Social media insights and mobile productivity are certainly valuable and important.

But for most B2B companies, growing and expanding current customers is beyond important—it’s mission critical.

Our mission here at the Predictable Success is to research and disseminate leading-edge practices and innovations in sales operations.

Predictable Success accesses a world wide community in which we bring together B2B sales professionals to help navigate a rapidly changing world by sharpening sales skills, enhancing?strategies and practices and providing a system for personal and professional growth so that sales people can make more money, be more respected,?be more recognized, and more influential.

So we’re always learning about different approaches, new technologies, changes in focus and priorities, what’s working well right now, what’s not panning out anymore, and so on.

Other people can teach you to sell.?We enable you to sell better!

These processes have worked with many of my clients for years and this systematic and disciplined approach has been a critical component to their success

The GOAL of every high-performance sales team should be to…… Proactively create the conditions where more deals, that are more profitable, with better customers, are the natural result.

This is achieved by engineering the overall sales process such that it reliably generates the desired outcomes as a matter of course.

Predictable Success can examine your sales processes and deliver an accurate road-map after determining where you’re on track and where you need a course correction and can provide a cost/benefit analysis and expert recommendations to improve your sales performance on every level.

Want help designing customised sales strategy road-map want to deliver predictability, consistency, revenue growth and sustainability to your sales operations, call for a chat on 0432 622 744 .