Pro active account management squeezes profit

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  • 1. Proactive account management drives growth and profit The prime objective for every business should be to squeeze every pound of profit from their customers. This can be achieved by getting closer to your customer and developing a better understanding and appreciation of their business, its needs and challenges. As a result, you are more likely to identify and exploit revenue and profit opportunities and less likely to be the last to know that you have lost a customer’s business. Your best customers are your competitors’ top prospects Solution: Adopt a proactive account management programme Sometimes when we discuss implementing a proactive account management programme with clients in order to develop additional revenues for their business, we are greeted with a response along the lines of “We are busy enough already. We already talk with our customers. Our account managers are just order takers and your programme will cost money”. In our experience businesses often fail to maximise customer revenues by allowing their account managers to simply take orders instead of digging a little deeper, and adopting a more professional, structured approach. Obviously, it should be easier to sell to existing customers, it’s clearly much cheaper and more profitable than constantly chasing new customers. Don’t think for one minute that we are suggesting that you don’t need to be pursuing new customers because obviously you do. It has been suggested that you will lose 10% of your clients every 5 years through natural wastage i.e. they go out of business or they no longer need your product or service. Consequences: Failure to implement this programme can lead to business failure Despite regular contact with their customers, some of our clients still seem to be the last to know that they have lost the business! Often this is because they are communicating at the wrong level. Although the user may be satisfied with the product or service at an operational level, the decision to change suppliers may come from a more senior level and is often made without consulting the user. On more than one occasion, we have seen a multi million pound business crippled overnight because nobody had foreseen the effect of losing a key customer and consequently they were unprepared and it destroyed the business. Ask yourself “What would you do if you lost one of your major customers tomorrow?” We covered the effects of this in our July ’08 Viewpoint. Summary We have shown why proactive account management is essential for business growth and increased profit; let’s now move on to implementing it. T: 01276 537282 e: w:
  • 2. Pro-active account management – Step by Step 1 Prioritise customers according to potential and existing profits 2 Instigate formal account reviews – Identify and develop relationships with key decision makers: specifiers, the budget holders, order signer, allies and opponents etc – Identify risks and issues; actively seek solutions – Identify potential opportunities when a customer introduces new product ranges or enters new markets – Identify your customers’ suppliers, customers and competitors – Regularly monitor their financial performance for an early warning of deterioration in their financial position – Monitor customers actual performance against their and your forecast – Monitor customers’ marketing and promotional activities to highlight demand increases or price pressures – Monitor company news for senior management changes, ownership changes, acquisition and merger activity, orders won and lost – Develop your knowledge and store the information in a customer relationship management (CRM) database. Analyse every aspect of your customers’ business relationship and transactions; store it in the CRM 3 Develop a contact schedule by account 4 Review your customers for importance in terms of existing profit and their potential for additional profit 5 Prioritise accounts for development time 6 Schedule formal account planning with priority accounts 7 Create a relationship development plan for priority accounts 8 Look for opportunities to cross-sell, upsell and gain referrals New Mindset can support the implementation of your proactive account management programme. We will identify, specify, recommend and implement the necessary processes and complete staff training to ensure the successful adoption. T: 01276 537282 e: w:
  • 3. We deliver sales training workshops on account management and business development techniques along with coaching and mentoring for individuals. We assess the performance of your sales team and its individual members; identifying weaknesses effecting performance and providing recommendations for performance enhancement. Government funding is currently available for business improvement projects; your business might be eligible for financial support. As an approved supplier we can set this up for you – click the link to find out your eligibility and how we can help. CALL 01276 537 282 or email for your no obligation consultation. T: 01276 537282 e: w: