In our journey to unlock success, we turn to the wisdom of data. The numbers paint a compelling picture. Organizations that wisely choose their key accounts are reaping the rewards. These are the companies that make choices based on the spirit of partnership and future potential. They don’t simply rely on company size and current spend. These organizations are witnessing an astonishing 8% increase in customer spend. Yet, here’s the paradox: three-quarters of companies continue to lean on the traditional metrics of size and revenue (Gartner).
It’s a question that warrants exploration. The research exposes a critical truth. Prioritizing high current spend dampens the prospect of future revenue growth, slashing it by a staggering 50%. Once the initial rapport is established and growth achieved, the status quo takes hold, diminishing the productivity of resources deployed.
Customers who act as promoters boast a remarkable 10-percentage-point higher renewal rate and a 2-percentage-point increase in revenue growth, compared to detractors (Bain). These are those willing to expand their relationship with us. Customers poised for growth are not only more likely to renew, but more inclined to bless us with additional business. In contrast, those who remain content or passive pose a higher risk, as there is little room for growth.
Harmony in teamwork: cross-functional collaboration
The numbers speak volumes here, too. Robust cross-functional collaboration levels can catapult key customer spend by a jaw-dropping 215% above poor to mediocre collaboration levels (Gartner). Yet, the shocking reality is that 76% of KAMs rely on their personal relationships to secure cross-functional resources (Gartner). This could be linked to several reasons. Account planning’s confinement to the sales realm, initial plans being drafted without engaging all relevant functions, or the poor execution of action plans, leading to resource reassignment based on past failures. One thing is clear—cross-functional collaboration remains an untapped powerhouse, and its absence is a contributing factor to missed quotas.
Account planning, when executed with more precision, can be a game-changer. As affirmed by Bain, it can deliver substantial growth. With the promise of a 10%—20% boost in topline growth from account management and sales strategies and a staggering 3—5 times pipeline growth for target accounts, there is vast room for improvement. So, despite only 19% of CSOs considering account planning as key for account growth, investing in a solid and repeatable process, to drive new revenues, may be well worth it (Gartner).
So, how can you improve your key account planning approaches?
1. Improve your account selection
Choose your key accounts based on the ones with the highest probability of delivering the highest revenue growth. Not company size, not current revenue, but actual potential growth and a willingness to grow with you (Gartner and Bain). This strategic shift alone can set you on course, to achieve an impressive 8% increase in customer spending. However, it’s crucial to review and refine this annually, to adapt to evolving accounts, and ensure underperformers receive resource reallocation.
2. Ensure robust planning and follow up
Establish a robust plan and thoroughly track its progress. Despite investing considerable effort in crafting plans, numerous organizations falter in the execution phase. This leads to a substantial portion of agreed-upon actions left unaddressed (Bain). It’s imperative to conduct regular follow-ups. These should involve all relevant teams, not just sales. They should also be treated as an undertaking distinct from routine pipeline reviews. This dedicated approach will provide enough time and space to focus specifically on the action plan. This way, emerging obstacles can be addressed, agreed-upon actions finetuned, and the allocation of required resources ensured.
3. Enhance your collaboration efforts
Foster a culture of cross-functional collaboration that extends beyond the customer and includes essential teams, for comprehensive support. To achieve our goal of unlocking an additional 215% spend from key accounts, it’s imperative to empower account managers with dedicated resources. We must minimize the dependence on personal relationships, goodwill, and resource- and time-draining internal deliberations. Moreover, teams outside the sales domain can offer fresh perspectives on customer needs and innovative approaches.
4. Well prepared teams
Equip cross-functional teams with simple, digital tools, designed for seamless execution throughout the lifetime of the (Bain). When the process of plan follow-up becomes laborious, convoluted, or relies on perplexing Excel files, shared via email or scattered folders, the likelihood of executing timely and precise actions diminishes, and confusion escalates. It is paramount to supply the appropriate tools that facilitate idea collection, during the planning phase. We then need to prioritize those ideas, convert them into actionable steps, and ensure effective follow-up.
5. Be inspiring and compelling
Inspire teams with well-crafted sales and product strategies. These should not only be easy to comprehend but also compelling, enhancing their ability to persuade customers effectively. After all, it’s challenging enough to secure commitment for an offering that is clear to a customer. Why would anyone invest in something they don’t fully understand? Likewise, it’s unreasonable to expect teams to advocate for a service when they themselves are uncertain about its value proposition. Much the same as if they don’t understand the benefits it delivers to the customer.
Let’s rethink our account planning approaches, and dare to be visionary, to boost our success.
To find out more get in touch with a member of our team today!