For a long time, the dowdy and somewhat overlooked sister to the rather more glamorous new business sale; the development of existing customers—or account management as it's generally known—has suddenly become rather more attractive. With new business opportunities harder to come by for many companies selling business to business, and with increased competition driving down margins, many firms are finding their existing customers are the "cash in the attic" they need to take them through the current down turn.
Selling more to your existing customers has a number of virtues: as an established supplier, sales cycles are generally shorter, competitive pressures are less and margins are higher.
For a few businesses, like funeral homes perhaps, the scope for repeat business might be a little limited, but for most there's potential to either sell more of what customers have already, or add other products and services. Selling more to your existing customers has a number of virtues: as an established supplier, sales cycles are generally shorter, competitive pressures are less and margins are higher. Which is why, as independent CRM consultants, we're seeing sharp growth in companies looking to be more systematic in maximizing customer potential and using CRM technology to support it. The following are some of the simple ways firms are doing it:
Understanding Who Has What
While it might sound obvious, for many companies understanding who has what products or services is a challenge. It's not that the information isn't there necessarily, it's just not readily available to those that need it: the sales and marketing teams. We worked with a manufacturer of printing equipment whose customer data was spread across three separate databases and was unusable from a sales and marketing perspective. By consolidating the data into the CRM system the client was able to identify customers who owned older models of equipment, and was able initiate a highly successful marketing campaign aimed at upgrading them to newer, more cost effective machines. The investment in the supporting CRM technology was paid off in three months.
While this example may sound extreme, we've seen variations on this theme time and time again, so for many companies making this information readily available can be a quick and simple way of growing sales.
Understand the Customer Potential
Not all customers are equal, some have the potential for growth and some do not. The key to growing business from the customer base is to align effort with potential, which is something that rarely occurs without a systematic approach.
As an example, we recently worked with a client whose products were sold through a reseller channel. When they mapped their sales volumes as a percentage of each reseller's overall sales, they were surprised to find that many supposedly "minor" accounts were actually selling huge volumes, but of their competitor's products. Even more disturbingly, when they overlaid where their sales team were spending their time, it was often with the local or less demanding resellers rather than those who had the most growth potential. CRM technology can help companies gather the detailed profiling data in order to more effectively assess customer potential, and having categorized the customer base appropriately, can be used to ensure resources and potential remain aligned.
Plan
Yes, this sounds both obvious and dull, but for many companies the management of clients is entirely reactive to who shouts loudest rather than who has greatest promise. A structured planning approach can be a highly effective way of generating business because it helps focus activities on the areas of greatest opportunity.
We've seen one of the major financial services companies gain significant market share by embedding the planning process within their CRM system. They've consistently caught their competitors napping by concentrating significant resources in a highly coordinated way on accounts they've identified as having high strategic value. The CRM system very effectively supports the planning and sign off process itself, but has proved particularly beneficial in providing visibility of agreed activities and progress to date. In effect technology avoids the fate of most planning documents—permanent incarceration in a dusty filing cabinet—to become living, breathing tools for growth.
Develop a Contact Strategy
In the good times it's easy to be focus on winning new business rather than developing existing customers. I suspect we're all familiar with suppliers to whom we've given business but haven't heard from again. To some extent this may be understandable because in many new markets there's a limited window to "land-grab." However, for many suppliers this new business focus ends up being the equivalent of planting crops and not sticking around for the harvest.
One simple way to balance this preoccupation is to determine a contact approach and frequency for each customer and manage it through the CRM system. This helps develop the strength of relationship with the client and provides for a considerably more fertile environment for sales growth.
Increase the Range of Contacts and Market to Them
Recent work with a client revealed that while they had a wide range of products and services that appealed to many areas of their customer's businesses, their salespeople tended to foster a small number, of mostly lower level contacts, in their customer base. This was significantly restricting the growth of the business, as well as increasing customer attrition when these contacts moved on.
CRM technology can play a key role in helping ensure that salespeople extend the range and level of their customer contacts. In addition, by integrating new communication channels such as telemarketing, customer service operatives, or email marketing, organizations can move from communications that are restricted to the subjects the salesperson feels comfortable talking about to a much broader, more substantive dialogue with key targets throughout the customer organization, with a view to substantially increasing the range of products and services sold.
While none of the above strategies are unduly sophisticated, for many businesses just getting these basics right can have a profound impact on a company's performance. Over the years we've helped many companies significantly increase profitability through the more effective use of CRM technology, and more effective account management and development strategies have provided some the highest pay-back areas. In today's business to business sales environment, this may just be the difference between success and failure.