We’ve all heard those estimates about how it’s far less expensive to retain existing customers than it is to find new ones. After all, the costs of securing a new customer can be substantial, especially when you factor in your costs of securing qualified leads and your costs to convert those leads into paying customers. It's certainly something that doesn't happen overnight. However, success with customer retention ultimately comes down to adopting several simple, straightforward and proactive customer management strategies. If properly used, they can not only improve your customer retention, but they can help grow your existing customer accounts. So, what are the five pillars of success in B2B customer management?
#1 Managing B2B Customer Expectations
First to make our list is the importance of managing your customer’s expectations. Simply put, managing those expectations isn’t a onetime affair. It’s something your salespeople must do at the outset of any new relationship and something they must reinforce day-after-day, week-after-week and month-after-month. It is simply the most important aspect of B2B sales success because it defines the conditions of how your company’s service capabilities will be evaluated by your customer.
If your salespeople don’t properly manage these expectations, then your customer will surely do it for them. If that happens, then your company will forever be in catch-up mode. Your customer will dictate all terms of business and will surely force your company to go outside its comfort zone. That will increase your costs to serve and put your customer in a position of total control.
The above video is from: The Importance of Managing Your Customer's Expectations
#2 Managing the Customer’s Scorecard
Successful B2B account management involves moving customers up your company’s value scale. What exactly does this involve? Simply put, your salespeople must thoroughly understand your company’s costs to finance its inventory and its costs to finance receivables. Most importantly, your salespeople must be able to move customers up a value scale that measures 1) how much the customer spends, 2) the types of products they purchase, 3) how fast they pay their invoices, and 4) whether the customer contributes to a high inventory turnover rate.
The above table is from the post: Sample Customer Scorecard Excel Sheet: Grading Your Customer’s Value
#3 Defending Price
It’s amazing to see how most salespeople react when a customer makes a claim that their pricing is too high. Instead of defending their price, most immediate go on the defensive and assume that lowering their price is the surest way to close the deal. What these salespeople fail to realize is that a customer’s concern about price is nothing other than a concern about their company’s costs; there’s a big difference between your product’s sticker price, and your company’s ability to help its customers lower costs! Instead of lowering your product’s pricing, come up with different strategies to reduce your customer’s costs. Understand that these price concerns are cost related; there are multiple ways to lower your customer’s costs without simply matching the lowest competitive market bid.
#4 Sales Account Gap Analysis
Your salespeople must be able to use a sales account gap analysis to outline their account’s progress and define its growth. A gap analysis provides insight into how much business your company currently has, versus what remains to be pursued and closed. An account gap analysis should be performed on each of the salesperson’s largest customers. Next, that information should then be used to put together the territory’s entire gap analysis. When it comes to identifying what your company currently has as business, and what remains to be pursued, nothing compares to the gap analysis.
The above table is taken from the post: Sample Sales Territory Gap Analysis Excel Sheet With Pie-Chart
#5 Sales Forecast Accuracy
Why is sales forecast accuracy such an important part of B2B customer account management? While this may seem like a straightforward question, the real answer is based on the effort involved, and not necessarily whether that forecast is accurate or not. Granted, improving sales forecast accuracy improves how your company manages its inventory and how it puts together its sales forecasts. However, think about what happens when your salespeople try to improve their accuracy. What’s involved? Well, they’ll have to get to know their customer better, and that customer’s business better. In essence, your salespeople must be embedded in their customer accounts. They must know the ins and outs of the main decision makers, and must have a thorough understanding of their customers’ customers. That comes from a proactive strategy predicated on continually trying to improve sales forecast accuracy.
To read more about PERT, please see: Sample Sales Territory Forecasting Excel Sheet for Small Businesses
When it comes to customer retention, your salespeople must move from being hunters to farmers. If that means diverting your sales resources so that some internal salespeople fill the role of inside sales, and account managers, then so be it. Maintaining these customer relationships is pivotal to business growth. Managing B2B customer expectations is something that all salespeople must master. Understanding your company’s costs of financing is an essential part of excelling in today’s sales environments. Defending price means your salespeople will not only protect your gross profit margins, but they’ll ultimately help protect your market share. Finally, continually raising the bar on sales forecast accuracy, and performing a gap analysis by account, will further ensure that your salespeople are always embedded in their customer accounts.
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