When companies plan for organic growth, they often look exclusively at customer acquisition (the “hunter”/sales role) and overlook account growth (a “farmer”/account management role). In this case study, a company that compensated salespeople (hunters) based on new customer acquisition did not correspondingly incentivize account managers (farmers) to find the full earning potential of each customer relationship . Instead, account managers overlook the equivalent of repeat orders and resolving customer complaints. With very little additional training and guidance to the partnership from departmental leadership, this role can often fully exploit the bridgehead established by Sales.
This is one of a series of case studies highlighting “Key Questions and Course Correction Quotes” taken from 20 years of B2B customer insight projects. All the names are fictitious, but the situations are real. The case studies paint a picture of how important it is to know what your B2B customers think, but not what they say. These are real-world examples of how soliciting and acting on customer feedback has helped companies retain customers longer, grow relationships, and win new business faster.
Case Study: How “Farmers” Started Printing Money
Key Question (Asked to an Operations Manager, the supplier’s primary contact in this 6-digit relationship):
“Are there any products or services you would like to see added by ‘LiteManufacturing’?”
Course Correction Quote:
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 when:
This was a simple baseline feedback project, not a scavenger hunt designed to increase revenue, yet there it was: money left on the table. He knew that LiteManufacturing sold kits and components; Was there a reason they hadn’t told this customer? One call to the account manager, and he understood how he had dropped the ball. He immediately walked his customer through LiteManufacturing’s full offering and selected that customer’s component business. The president then required all account managers to hold annual “account review” meetings with the 20% of clients who accounted for 80% of the company’s revenue. Objectives: Give customers the opportunity to offer unstructured feedback and remind them of all that LiteManufacturing offers.
LiteManufacturing not only grew its portfolio with individual accounts, but the account managers deepened their relationship with clients and began to enjoy their jobs more. Across the table, customers began to feel a sense of collaboration with LiteManufacturing that was missing when account management was a passive role.
Conclusion:
It is common for customers to only know what they have already bought from you. This can happen when:
- The potential customer was not listening during the sales process.
- The salesperson limited his discussion to details about a product or service for fear of “talking beyond the sale.”
- No one took the time to educate existing customers on new products and services as they were added.
- There was churn on the client side, and the new contact person only knows about current purchases.
As part of the formal/informal account review and onboarding process, the relationship owner should review everything their company offers. When there’s a client-side staffing change anywhere in the chain of command from daily contact to quote owner, it’s smart to treat the new person like a new client. He wants them to be familiar with his entire offering and to recognize that their relationship is important to his company. When there is turnover in relevant positions on your side of the relationship, it is smart (and often strategic) for the new person to introduce themselves up and down the customer chain of command.
There are three costs to not fully servicing existing accounts:
- Leaving money on the table today (incremental income loss).
- Create a “beachhead” opportunity for competitors (failure to develop and defend one-stop-shop relationships).
- Weak positioning (failure to create an association level position with customers).
Vendors miss out on the opportunity to switch from vendor to partner when they fail to incentivize account managers to fully develop customer relationships. The first step to changing this in your business is to put a partner-oriented leader in charge of account management.
I classify projects as assessments, investigations, treasure hunts, or rescue missions. This project was an assessment turned scavenger hunt. The client’s question was “What is our position with respect to our clients?” I’m always on the lookout for outliers, because I try to have the same conversation with customers that the CEO would have if he had the time. No president is going to ignore the money that is being left on the table!