Leaders who run B2B sales functions say their teams’ portfolios have more than doubled in size. And, while reps may find this to be a good thing — given they can offer more to more demanding customers — it also puts more pressure on them to squeeze more money from existing customer accounts.
Unfortunately, growth from existing accounts is falling short of expectations. Only 28% of sales leaders report that account management channels regularly meet their cross-selling and account growth targets.
Service won’t save you
Although the hunters of the sales force can focus their energies solely on selling, account managers are typically responsible for not just identifying (and sometimes pursuing) account growth opportunities, but also for the wide range of customer service and support activities meant to keep customers happy and loyal.
Given the sheer scope of their role, account managers tend to spend less time on challenging account growth activities and more time focused on keeping customers happy. What’s more, the systems of incentives and values that have grown up around many account management roles reinforce this behavior. In other words, account managers are told to “first, do no harm” to the customer relationship before trying anything else.
Prioritizing customer service after service levels are sufficiently high does not lead to growth
The overall effect of all this is an anti-shrinkage system that results in account managers focusing their efforts disproportionately on the service and support activities that they believe will improve customer retention.
Customer service doesn’t equal growth
The vast majority (88%) of account managers believe that providing above-and-beyond customer service is also the surest way to drive growth, but it isn’t. Gartner analysis found that while high levels of customer service do increase the likelihood of retention, they have no statistical or meaningful effect on growth. This is because retention, renewal and repurchase all involve asking customers to commit to the same thing again, whereas account growth requires reps to convince customers to do things differently by buying new or different products. These are strikingly different conversations.
In short, prioritizing customer service after service levels are sufficiently high does not lead to growth but instead to wasted effort as sellers attempt to deliver ever-higher levels of service in pursuit of an illusory goal.
But “customer improvement” just might
Instead of focusing endlessly on service, the most successful account managers grow accounts by bringing new perspectives and ideas to customers and helping them understand how to improve their own business in ways they can’t fully appreciate on their own.
This set of activities is called “customer improvement,” and is the single-most important driver of account growth. It requires account managers to provide a unique and constructively critical perspective on how both the customer’s and supplier’s firm can grow their business together. While traditional retention strategies focus on what the supplier has done in the past for the customer, customer improvement requires a clear focus on how the supplier can help the customer in the future.
Customer improvement is nearly as effective as product success and service at retaining customers. Far from undermining renewal efforts, customer improvement gives customers a powerful reason to continue — and expand — their commercial relationship with the incumbent supplier.