We’ve all heard the compelling statistics. Most selling organizations derive 80% of their revenues from 20% of their clients – the Pareto Principle. Acquiring a new major account is up to 20 times more expensive than keeping a current one. And even a small percentage increase in a firm’s overall major client retention rate has an exponentially positive effect on revenues and profits, delivering value to all stakeholders. But on the flip side, of course, decreases in the same retention rates produce similarly negative impacts that are often both devastating and long-lasting. The emotional and operational trauma that follows the notification that a major client is leaving is something unfortunately familiar to most of us who have made careers in the enterprise selling arena. Given the crushing impact of these losses, it certainly makes strategic sense for selling organizations to focus intensely on retaining these valuable assets.
In serving their major accounts, though, most organizations aren’t built on account retention frameworks. For strategizing how to keep large enterprise clients is typically viewed as a long-term initiative while the short-term, dominant mantra is chasing the numbers – “What have you sold today?”. Think about CRM systems with their opportunities, probabilities and weighted values feeding forecasts, quotas and budgets. Those activity command centers have little connectivity to retention, as an initiative. As such, organizations are naturally structured to take swift advantage of opportunities and to fix the problems that threaten to cause delays. Of course, reacting quickly is very important to all clients. But enterprise accounts are marketplaces in and of themselves, ecosystems demanding a wider focus far beyond the reactive. Understanding clearly what matters most to each major account is vital. And the ability to apply that knowledge to the critical factors that impact retention, customized to each account, earns you a much better chance of keeping it.
But how do you establish and utilize a real major account retention framework? And how do you realistically integrate it into a “What have you sold today?” model? If it doesn’t align seamlessly with the everyday activities and touchpoints your team has with your major account, it’s going to be worthless. Or maybe it’ll be wrapped into the annual account planning exercise, often populated and returned to the shelf until the following year. For something as fundamental as major account retention, we simply must do better.
The framework must be built on reality, on the fundamental reasons why major accounts partner with you for the long term or part ways – the reasons why they stay or go. In Sandler Enterprise Selling, we’ve built the Account Retention Tool to provide that practical but powerful framework, to improve your major account relationships by focusing on those stay or go reasons – the 16 “Critical Retention Factors”:
- Your Delivery of Real Value
- Ease of Communication with the Account
- Your Buyer Network Coverage
- High-Level Executive Relationships
- Your Relevance in the Account – Going Deep and Wide
- The Variety of Products/Services you Deliver
- Your Wallet Share of Winnable Business
- The Duration of your Longest Current Contract
- Your Active Pipeline Opportunities with the Account
- Your Forecasted Account Revenue Growth
- The Profitability Levels in your Business with the Account
- Your Delivery Performance with the Account
- Your Account and Industry Understanding
- The Account’s Satisfaction Levels
- The Trust Levels in the Relationship
- The Account’s Dependence on You
Think about it. If you’re not dynamically tracking your performance with a major account, constantly gathering intelligence to serve more effectively, you are vulnerable. Your continuation is in serious jeopardy. For in the enterprise world, sophisticated competitors are constantly developing targeted strategies to exploit your weaknesses and steal your key clients. And don’t kid yourself – they know who your major accounts are and they work diligently to take them away. So, in retaining major accounts, there’s no standing still. There’s no status quo. There’s only action to be taken.
How does the process work? The selling/service organization’s account team, consisting of sales, delivery and other key personnel connected to the account, meets and develops candid evaluations of the organizational performance in each of the critical retention factors regarding the specific account. And these evaluations don’t represent what you hope your performance will be but what it actually is. In true team selling fashion, the collaboration and communication among account team members insure that these sessions are true difference-makers.
But while there’s great value in these evaluations, the focus must be on forward motion. For in account retention, the real magic is in pinpointing the actions to execute to improve your position in each critical retention factor, enhancing your account relationships. And with each improvement action, the team identifies the accountable individual and the realistic completion date.
Effectively utilizing a dynamic account retention vehicle is a survival skill for enterprise account teams, delivering value throughout major account relationships over time. And having a practical, workable framework aligned to selling and service models is crucial. It simply must be based on the customized reasons why a specific major account will want to partner with you forever. With that clearly understood, you’ve then earned the right to strategize how to make it happen.
So, forget your grammar lessons. In terms of major accounts, retention is not a noun, it’s a verb. It’s not something you get. It’s something you do.