Major Accounts: Will They Stay or Will They Go?
We all know the statistics. Most selling organizations derive 80% of their revenues from 20% of their clients. Winning a new major account costs up to 20 times more than keeping a current one. And even a small percentage increase in a firm’s major client retention rate can have an exponentially positive effect on revenues – while similar decreases can produce negative financial impacts, often devastating and long-lasting.
Add to this the emotional and operational trauma following a major client loss, and it becomes clear how important it is for selling organizations to focus strategically on the goal of retaining these valuable assets. The problem is, most organizations aren’t built for the retention of major accounts. Keeping large enterprise clients is typically viewed as a long-term initiative, one that’s inevitably overshadowed by the daily mantra “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 or no connection to account retention. Our organizations are typically structured to take swift advantage of opportunities, and to fix short-term problems that could create obstacles now.
Of course, all clients expect responsiveness. But enterprise accounts are a special case. They are marketplaces in and of themselves, ecosystems demanding a focus that goes far beyond the reactive. Understanding what really matters to each unique major account is strategically vital. And applying that knowledge to the critical factors that impact retention, specific to each account, greatly increases your chance of holding on to the business.
So how do you establish an account retention framework … and how do you integrate it into a “What have you sold today?” model? If the retention model doesn’t align with the everyday touchpoints your team already has with your major account, it’s worthless. If it’s integrated into your annual account planning exercise, completed and returned to the shelf until the following year, that’s no help either.
Your retention process must be based on reality, on the fundamental reasons why major accounts partner with you for the long term or part ways – the way they answer the age-old question that paraphrases a classic song by the Clash: “Should we stay or should we go?”
In Sandler Enterprise Selling, the Account Retention Tool provides a practical, powerful framework for improving your major account relationships by focusing on those critical “stay or go” reasons via 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 learning and improving, you are vulnerable. Your continuation is in serious jeopardy. In the enterprise world, there are sophisticated competitors constantly developing targeted strategies to exploit your weaknesses in any or all of these “stay or go” areas.
Assuming that the answer is “stay” is a recipe for disaster! How does the Account Retention Tool work? Your organization’s account team, consisting of sales, delivery and other key personnel, meets and develops candid evaluations of your organizational performance in each of the critical retention factors regarding a specific account. These evaluations don’t represent what you hope your performance will be, but what it is taking place now within the account. In true team selling fashion, frank collaboration among account team members drives these sessions. The system’s dual priorities are brutal honesty – because complacency inevitably means competitive weakness – and targeted action that results in forward motion on the Critical Retention Factors where your organization is at risk of falling short.
When it comes to major accounts, retention is not a noun, it’s a verb. It’s not something you get. It’s something you do. If you want the answer to “Should we stay or should we go” to be “stay,” you must make some real-world assessments in all sixteen of these areas, then pinpoint the specific improvement actions that connect to each critical retention factor, identifying the accountable individual and the committed completion date that will enhance the account relationships. We’ve designed the Account Retention Tool to do just that.
Check out these blog posts to learn more about retaining major accounts!