Today's blog post is by Byron Matthews, president and general manager of MHI Global, a consulting firm that helps companies and their business leaders around the world build and sustain customer-focused, high-performance organizations to drive profitable revenue and predictable top-line growth.
So much of what we hear these days is about winning new business. Perhaps that explains why “capture new accounts” is perennially number one on sales leaders’ lists of top priorities. Recently, sales leaders were surveyed by sales effectiveness research and benchmarking firm CSO Insights, a division of MHI Global, regarding the top objectives for their sales organizations in 2015. Unsurprisingly, “capture new accounts” topped the list at number one (at 58.1 percent), followed by:
- “Increase sales effectiveness” (44.7 percent)
- “Optimize lead generation” and “increase penetration into accounts” (tied at 36 percent)
This desire seems natural given the reality that most companies are losing between 6 percent and 30 percent of their existing business every year. Further, roughly 80 percent of business annually is coming from existing accounts.
So, why is “new accounts” always the funnel-filling go-to, when study after study have shown that cultivating business from existing accounts is more profitable and efficient? I have had more conversations with clients than I can recall centered on rebalancing priorities around protecting and growing your current customers and clients with a healthy balance of new business. And what I find is this: There is a lot of excitement and activity focused on how to go after new business – a feeling of “if we are THIS busy, we have got to be doing the right thing.” In some cases, sales leaders feel like new accounts is the area where they exert the largest amount of influence – the lever they can control most. Unfortunately, this flurry of activity most often comes at the expense of ignoring the gold mine of untapped potential within existing accounts.
So, to sales leaders, I would humbly suggest the addendum of “retaining existing accounts” to “capturing new accounts” as top-of-mind objectives.
For some clients, that pendulum is shifting. We are spending more time with clients these days on finding a healthier balance. And I’ve found that the best, most sound approach to protecting and growing your client base issitting down with your customers and having an honest discussion about the relationship (how they view you, how you view them) that has nothing to do with the sales opportunity – that’s not tied to selling them anything. It’s a powerful concept. It’s also just common sense, but rarely is it common practice.
I believe our approach in how we think about methodology is more relevant today than it ever has been, and it’s grounded in our number-one principle: Understand your client, understand your customer. And, if you follow and live by that principle, the top objectives of what sales leaders are looking to accomplish will be met – including “capturing new accounts while retaining current accounts.”