A challenging market in recent years has caused many companies to reconsider how they balance new account acquisition with existing customer expansion.
Keep reading for 3 practical shifts your organization can make to optimize growth in both new and existing accounts, based on insights shared from a recent panel discussion hosted by the Sales Leadership Community.
1. Focus on Account Plans For Existing Accounts First
Focusing on growing existing accounts is both more valuable and more sustainable on a yearly basis than focusing on new account acquisition. Historically, the sales field has focused on churn rate (the percentage of existing customers not renewing) rather than Net Revenue Retention (the percentage of existing customers renewing). By focusing on what you can sell to existing customers first, you can plan more realistically for new account acquisition based on the current environment and resources available.
How do we recommend planning for existing accounts? We at SOAR recommend ‘white space planning.’ Consider: what is the white space–the opportunity–within the account? Consider the Total Addressable Market (TAM) for an account and how much is achievable within a certain time frame.
Allow plenty of lead time for account plans so you can get on the same page with existing clients before they make their own plans. Ideally, get in touch with existing accounts six months in advance to establish a projected expansion of each existing account before planning new account acquisition.
2. Align Your Actions With Your Goals
Shifting focus from acquiring new accounts to growing existing accounts requires shifting your actions, teams, and processes to align with your new goals.
Internally, compensation plans must be aligned with goals; if you incentivize new account acquisition, focus will stay with new accounts rather than existing accounts. Additionally, you might consider creating account teams across departments to grow revenue in each existing account (discussed below in section 3). If you do merge pre- and post-sale teams, establish mutual goals within each team. Each department will bring competing goals with them, which can threaten the success of the account team overall.
Externally, you must be proactive rather than reactive with existing accounts. As you consider existing account growth, create and communicate a value realization framework or maturity model. This is a consistent way you talk to customers about where they are, the value delivered up until today, and the next layer of value you can deliver. Offer a roadmap to impact cross-sell and up-sell. Meet with the executive sponsor at the account to discuss what your roadmap is and how it aligns with your key initiatives. Again, you must be proactive in creating this plan so you can communicate it to accounts in a timely manner.
3. Increase Connectivity Between Departments
Creating account teams across departments has many benefits. An account team model partners people from different departments to focus on growing revenue in one account together. Even if you can’t make that change now, consider: are there smaller ways you can increase connectivity between account executives, customer success managers, solution engineers, and business development representatives?
Creating account teams across departments improves the feedback loop and minimizes churn by eliminating the handoff between sales and customer success. Churn often occurs at implementation because customers weren’t a good fit in the first place. Having an account executive as part of an account team makes them more thoughtful with which customers they bring in. Account executives will also have real reference stories from closer involvement with customers.
Increased connectivity between sales and customer success helps resolve the natural tension between these two roles. Creating competition between account teams capitalizes on the competitiveness and energetic environment in sales needed for cross selling and new account acquisition. Additionally, the different departments will be able to learn from one another since they bring different skillsets to the team.
Potential pitfalls of account teams include role confusion and prioritization of time. For example, account executives can become too involved in account management activities that take them away from driving revenue. To troubleshoot this as a leader, clearly define roles and responsibilities on the team and check in with team members regarding their activities and time management. One way to do this is by having a weekly stand up with the revenue team to ask: ‘what are your top two focus areas for the week?’
We hope these tips will help you optimize growth in your accounts. For more tips on account management, check out these resources from SOAR Performance Group. To schedule a conversation about how SOAR can help you optimize account growth, contact us here.