Growth – Whose Job Is It, Anyway?
The plan is actually simple. A certain level of retention on existing clients/customers, with some predicted growth there, and that takes care of 70% of the growth. The rest will come from new clients/logos.
But there’s a problem. And it’s sort of big.
No one was tasked with growing those existing accounts.
Definitely no set of activities defined on HOW to grow those accounts.
In effect, it’s a destination without a map to get there.
This is actually more common than people may realize. People don’t focus on HOW they’ll get growth.
Beliefs drive this:
- If I do good work, it’ll take care of itself
- If I do good work, they’ll refer me
- I’m not in sales/I don’t like sales/I’m not a fit for sales, so I’ll ignore it
- They did $X with this year, so they’ll do $X with us next year
- Someone else will take care of it
- We’ve never worried about it before. Why should we now?
And those beliefs – right or wrong – appear to be supported by results.
Sometimes we attribute those results to the wrong factor. Circumstances may work in our favor, and we don’t see it:
- We’re in a growing market
- Competitors have failed
- We found a honey hole of business in a niche or with a group of clients
- Context – policy or market changes have caused an uptick in business
These are good. They just don’t justify our beliefs if any of those factors change. Because we’d be attributing results to the wrong source.
What does? Thoughtful action.
Fortunately for you, we can make this pretty straightforward.
Here’s the plan we’re going to lay out for this firm, and you can adopt it.
First: Score every account.
This means looking at every client and asking the following questions:
- What is this account worth NOW?
- What could it be worth?
- What’s our level of relationship with the account? (Risk)
From this, we create tiers. Not all clients/customers are created equal. 80/20 rules the world.
The existing revenue is simple enough. (We hope.)
The potential revenue needs to be quantified, even if it’s a ballpark. This includes new lines of business, or increased business, depending on your industry.
The relationship needs to be assessed. Not, “Does my contact like me?” but at what level are we plugged in? Manager? Director? VP? C-level? Board? And is this a vendor relationship, or partner relationship?
Each of those criteria needs to be scored or given a grade.
One bonus criteria may be strategic importance. Sometimes an account with little revenue or direct potential upside is important because of a relationship, or because it’s a signal to the market that you’re credible, or for some other reason.
Now, if you find yourself saying, “They’re all unicorns,” you’ve missed the point.
Second: Create plans by account score.
Accounts/clients that are solid in terms of revenue and potential, but lacking in relationship depth or level need a plan to secure the relationships.
For example, let’s pretend an account is worth 15% of your revenue (yikes!) but you’re only plugged in with one manager who could leave at any time. You better be selling something no one else is. You want to mitigate risk, and plan for HOW to do that.
Accounts that are fine in terms of current revenue production, but have MASSIVE upside require a plan to grow the account.
Some accounts pound out cash, but aren’t going to grow. They need a different plan.
If this sounds too confusing, you can simply grade your accounts gold, silver and bronze, and have a standard plan for each one.
This may look like (for example):
- Gold accounts get an executive sponsor, 4 in-person visits per year, and a dedicated associate or account manager
- Silver accounts get a junior executive sponsor, 2 in-person visits, and a customer service rep.
- Bronze accounts get an account manager, 2 semi-annual calls, and can be in the call queue.
Don’t get wound up on what is perfect, but do think about your resource allocation.
Remember – they aren’t all created equal in terms of how much they matter to you.
This isn’t rocket science, but sometimes you don’t want your best people managing the accounts with the least potential. Your rockstars need to be on your rockstar accounts.
Otherwise, you risk opportunity. Or your existing customers.
Third: Someone has to own it.
If everyone thinks someone else is going to do it, it isn’t going to happen.
Your key accounts need someone who is responsible for that relationship.
The retention of the client, the satisfaction of the client (those two go hand-in-hand), and growth with that client – someone needs to own those.
Fourth: Adjust as you go.
It doesn’t have to be perfect. It does need to be improved each year as you learn from your clients, and as your people grow. The ones managing the clients will have input on what’s working, and ideas on how to improve the relationship management.
Note here: comp may need to be tied to either retention, growth, or gross margin. Retention is protecting the account, growth is the future, and gross margin prevents discounting, or not raising prices as inflation continues to go up and to the right.
Fifth: Give it time.
This is simple, but takes time. Not all the people have the skills to manage relationships, including growing them. They may give you feedback based on their comfort level, not what’s going on with the client in reality.
(I often talk to people who are uncomfortable raising prices, even when their clients will tolerate it, assuming quality standards remain.)
Don’t panic when it starts off imperfect, or with pushback. Especially if the people on the ground prefer doing the work to managing relationships. Or, if they tend to advocate for the client OVER the interests of your firm or company.
Identify the skills and mindsets needed, and start to cultivate those. It’ll take time.
Like most good things.
Your clients likely aren’t all created equal.
And if no one is specifically tasked with retaining or growing an account, it won’t happen on its own.
Review your accounts, score them, build plans, and assign the work. With real accountability on results.
Have a question about this? Hit me up.