Today’s post is by Praful Saklani, co-founder and CEO of Pramata.
Relationships make life richer and better. They’re also the foundation of good business, because we all prefer to work with people we know, believe in, and trust.
This doesn’t seem like an especially radical notion until you stop and think about all the barriers that hamstring a company’s ability to engage with customers with whom they already have a relationship. This is not by design, of course, but it’s true nonetheless.
I talk with prospective customers who struggle to answer basic questions about their current customer relationships. They can’t say with a lot of confidence
what they’ve sold a big customer,
what the customer agreed to buy, or
what the customer paid for.
They often don’t know key dates and triggers, such as for auto renew, or even if they want to renew on the same terms. And this is just a sample from a long list of need-to-know but hard-to-get answers.
Mind you, these are often big, sophisticated companies, with advanced technology infrastructures and forward-thinking management. But this stuff is hard if you have to do it manually.
We recently collaborated with Selling Power to publish an infographic about some of the common barriers to sales productivity. It’s a quick and informative read that describes issues I hear about every day. Many of these barriers are rooted in the lack of complete and up-to-date knowledge about the customer relationship.
The implications are sobering.
Salespeople are often ill equipped to engage with customers because they don’t know the details of the current relationship. This is true when the customer relationship is multi-dimensional and highly negotiated, spanning tens or even hundreds of products and supporting contracts, SLAs, SOWs, amendments, and the like. And it’s especially true when the company has grown through acquisition, and institutional knowledge about acquired customers is lost in the wash.
Sales team productivity is compromised because they spend too much time chasing customer information at the expense of active selling time. Hobbling and slowing the sales team is frustrating – and costly – enough. The downstream implications are lousy, too, including the impact on customer retention and growth within current accounts.
Everyone knows the argument – it’s less costly to keep new customers than acquire new ones. The lower cost per sale associated with current customers drives higher margins, which, in turn, fuel additional investment in the product enhancements and extensions that lead to customer satisfaction, loyalty… and customer retention. It’s a virtuous cycle that managers aim for but often miss.
One of our key customers boosted their retention numbers over 4 percent by arming their enterprise sales teams with better and more accurate information about the customer relationship. Their sales reps can easily see which of their accounts have expiring contracts, and focus first on those accounts. They are able to identify expiring products, pricing, usage, and payment details in seconds, and have the information they need to engage with and keep that customer.
The benefit of arming sales teams with the info they need to better manage the customer relationship ripples throughout the company. Supporting teams in sales ops, finance, compliance, and legal departments are freed from routine requests for help and, instead, are able to focus on more strategic and valuable work.
Accurate and up-to-date knowledge of your customer also fuels expansion within that relationship, because a sales professional is better able to spot cross-sell and up-sell opportunities.
Companies are better able to boost customer retention and grow their most valuable customer relationships when they arm sales professionals with complete and up-to-date intelligence about those customers. It’s worth it.