Which Of The Following Are Components Of Project Cash Flow Stop Leaving Money on the Table!

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Stop Leaving Money on the Table!

When companies plan for organic growth, they often look solely at customer acquisition (the “hunter”/sales function) and ignore account growth (the “farmer”/account management function). In this case study, a company that compensated salespeople (hunters) based on new client acquisition did not adequately incentivize account managers (farmers) to find the full revenue potential of each client relationship. Instead, account managers oversaw the equivalent of repeat orders and handled customer complaints. With very little additional training and partnership focus from department leadership, this function can often take full advantage of the foothold established by sales.

This is one of a series of case studies highlighting “Key Course Correcting Questions and Quotes” drawn from 20 years of B2B customer insight projects. All names are fictitious, but the situations are real. Case studies paint a picture of how important it is to learn what your B2B customers are thinking – but not saying. These are real-world examples of how collecting and acting on customer feedback has helped companies retain customers longer, grow relationships and start new business faster.

Case study: How “farmers” started printing money

Key Question (Asked to the Operations Manager–the supplier’s primary contact in this six-figure relationship):

“Are there any products or services you would like to see added from ‘LiteManufacturing’?”

Quote for course correction:

Operations Manager: “We buy kits from LiteManufacturing, but we have to buy components from another supplier. I would like LiteManufacturing to start offering components.”

My client’s problem:

This was a simple basic feedback project, not a treasure hunt with the goal of increasing revenue, but there you have it: money left on the table. I knew that LiteManufacturing sells kits and components; was there a reason they didn’t tell this customer? One call to the account manager and he realized he had dropped the ball. He immediately walked his customer through LiteManufacturing’s entire offering and took on that customer’s component business. The president then required all account managers to hold annual “account review” meetings with the 20% of customers representing 80% of the company’s revenue. Objectives: Give customers an opportunity to offer unstructured feedback and remind them of everything LiteManufacturing has to offer.

Not only did LiteManufacturing increase wallet sharing with individual accounts, account managers deepened their relationship with customers and began to enjoy their work more. On the other side of the table, customers began to feel the collaboration with LiteManufacturing that was missing when account management was a passive function.

Conclusion:

It is common for customers to only know what they have already bought from you. This can happen when:

  • The prospect didn’t listen during the sales process.

  • The salesperson limited his discussion to details about a single product or service for fear of “talking past the sale.”

  • No one took the time to educate existing customers about new products and services as they were added.

  • The traffic was on the customer’s side, and the new contact person only knows about current purchases.

As part of the onboarding process and formal/informal account review, the relationship owner should review everything their company offers. When there is a change in customer-side personnel anywhere in the chain of command from day-to-day contact to budget owner, it is wise to treat the new person as a new customer. You want them to be familiar with your overall offering and to recognize that their relationship is important to your company. When there is a change in relevant positions on your side of the relationship, it is smart (and often strategic) to introduce the new person up and down the customer chain of command.

There are three costs of failing to fully service existing accounts:

  1. Leaving money on the table today (loss of incremental income).

  2. Creating a “beachhead” opportunity for competitors (failure to develop and defend relationships in one place).

  3. Weak positioning (failure to create partnership-level status with customers).

Vendors miss an opportunity to transition from vendor to partner when they fail to encourage account managers to fully develop customer relationships. The first step in turning this around in your company is to put a partner-oriented leader in account management.

I categorize projects as assessments, research, treasure hunts or rescue missions. This project was an assessment that turned into a treasure hunt. The client’s question was “Where do we stand with our customers?” I am always alert for emergency situations because I try to have the same conversation with clients that the president of the company would have if he had the time. No president will overlook money left on the table!

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