Key takeaways:
In 2019, customer acquisition strategies alone can no longer guarantee market leadership for the multi-contact complexities of B2B enterprises
A direct correlation exists between market leadership and revenue growth for B2B enterprises and their holistic focus on retaining and growing existing accounts
The biggest challenge for many B2B companies is redefining the role of account managers and empowering them with tools that focus on account retention & growth
There’s a better way to grow
The latest research by Gartner has found that a commercial strategy focused solely on attracting new business will no longer suffice in today’s B2B environment. Account management teams must figure out how to balance retaining and growing existing accounts if they’re going to stand up to competition in the long term. Forbes Insights backs this up by arguing that companies that have the same focus on account strategy, experience a positive impact on profitability, market capitalization and shareholder value. In fact, 46% of those companies are more likely to be market leaders in revenue growth and growth from existing customers, and 36% are more likely to be market leaders in profitability.
Let’s illustrate this with an example:
Imagine you’re a $500m company with a 20% churn rate per year. Keeping revenue growth completely flat, if you reduce churn by 10% every year over a 5-year period, you will add approximately $50 million back to your bottom line for that entire period.
But how can companies focus on holding on to their customers, when 44% of them do not know their retention rate? Let alone grow existing accounts when Forbes Insights shows 36% of companies say they manage some post-sale activities but not the complete cycle - onboarding, adoption, upsell, cross-sell, retention and renewal. Only 10% say they have a clear real-time visibility into the health of their customer base and make strategic growth decisions derived from the resulting insights.
Yet, companies cannot afford to lag behind in reforming their approach to account management.
Defining the Challenges
Companies that have become aware of the power shift between customer and vendors have already started to update their account strategies. Their biggest challenge - redesigning the role of the account manager and equipping him/her with the right tools for retention gains and account growth.
Gartner’s and KPMG research indicates a growing issue within B2B enterprises around the role of the account manager. First, KPMG finds that across industries, 95% of B2B customers continuously prefer the solo account manager model, as opposed to the traditional rotating support model (outreach to a different person every time). This means that the role and skill set of the account manager now plays a critical role in the satisfaction and churn prevention of their multi-contact B2B accounts.
Second, Gartner research shows that despite 2.3x increase in the size of the average sales teams’ B2B portfolios, “only 28% of sales leaders believe existing account management channels meet cross-selling account growth targets.” This aligns with our own research, which found that 41% of companies grew their existing customer base revenue less than 10%.
Therefore, not only do account managers serve as the first line of defense in preventing churn but they now take on an entirely new sales position within an organization to support the customer growth funnel. And the hard truth is that up until now, this hasn’t been supported with the necessary tools and insights to get the job done.
Not for long...
How can account managers best achieve both their retention and growth goals?
So, what can B2B leaders do to overcome the challenges mentioned above and balance the retention and growth of existing accounts today?
Our research and decade long expertise in the CX field has identified one approach that will drive both retention and growth from existing customers: combining account management with monetization tools.
Account management includes those activities after an initial purchase within the customer lifecycle, such as managing feedback for both respondents and accounts, as well as prioritizing follow-up and closed loop practices by revenue. Account management tools and best practices allow enterprises to get an overview of their account status, gauge account health across the customer lifecycle, and prioritize actions for at-risk high-revenue accounts. Above all, such tools can help B2B companies see the warning signs of upcoming churn and stop it in its tracks.
Monetization tools help to strategically identify areas for growth within an existing customer base—i.e., up and cross-sells, referral marketing, reviews and predictive analytics. Gartner shows that the reason why only 28% of account managers meet their cross-sales targets is due to lack of insights on customer improvement opportunities - showing “customers a new perspective on how they might operate their businesses (i.e., new ways to make money, save money, mitigate risk, etc.)”. Monetization tools, however, equip account managers with opportunity tracking that can increase the likelihood of account growth.
Conclusion
Now that you understand what’s needed to achieve your retention and growth goals, we invite your to see how you can bring that into fruition. Introducing, CustomerGauge Account Experience®, the world's first enterprise software for perfecting B2B CX. But before you check out the software, download the "Definitive Guide to B2B CX" and learn how to:
Develop an account-based CX methodology across your organization
Institute best practices for monetization: up-sell, cross-sell, etc.
Drive transformation across the enterprise around the customer
And so much more
| Download the eBook below!
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