Uploaded byThe Center for Sales Strategy
Reduce account attrition
Can you have too much emphasis on new business? I submit that’s not a crazy question. There’s a scenario, more common than you think, where an excessive emphasis on finding new clients can mask a significant problem growing inside your organization. As yourself: What role is that new business playing? Is it fueling your sharp growth curve? If so, congratulations. Too often, the answer is that new business is playing a very different role—that new clients are coming in the front door just fast enough to replace those who are leaving by the back door. The emphasis on new business development in your organization might be coming at a high cost—not placing sufficient emphasis on satisfying, retaining, and growing your existing accounts. Or you might not even be breaking even: You could be working harder than ever to find new revenue that is failing even to cover for the losses you’re experiencing due to attrition. It reminds me of the classic line from Alice in Wonderland by Lewis Carroll, “The hurrier I go, the behinder I get.” If that feels like the situation you’re in, keep reading. Or if you’re simply not happy with the attrition you’re experiencing from year to year and wish that your new-business effort wasn’t having first to replace your losses, then these slides may be helpful…
Reduce account attrition
- 1. “You can filla bucket a lot faster if it isn’t leaking.” steps to reducing account attrition
- 2. steps to reducing account attrition First, we’llreview the macrosteps for managers to take... And then the microsteps for salespeople...
- 3. steps to reducing account attrition macrostepsfor managers GATHERTHE DATA a. Calculate Annual Attrition Rate b. Analyze by measurable parameters • by dollar value • by number of accounts • by number of Key (most desirable) accounts • by products or service type or line purchased • by source (sales channel or salesperson) • by SIC sector or other useful category • by region or division 1
- 4. steps to reducing account attrition macrostepsfor managers FINDTHE FACTS BEHIND THE DATA a. Conduct Exit Interviews • representative sample of all departed accounts • consider interviewing every departed Key account 2 b. Characterize/categorize reasons for leaving • list reasons beyond your control (stopped buying altogether) • list reasons under your control... - for those who went to a direct competitor - for those who went to an indirect or disruptive competitor
- 5. steps to reducing account attrition macrostepsfor managers FIXYOUR MACRO LEAKS a. The information gathered in steps 1 and 2 should provide a candy store full of strategies and tactics available to reduce attrition. b. Consider role of sales management policies 3 • does compensation plan fail to reward account retention? • do salespeople receive insufficient recognition for retention? • do line sales managers hear regularly from top management about importance of account retention; are they recognized and incentivized appropriately for retention success?
- 6. steps to reducing account attrition microstepsfor salespeople REASSIGNTHE ACCOUNT? a. the line sales manager should reassign former accounts to a different salesperson if there is any evidence the account was lost because of poor service or a weak relationship. b. the former account should remain with the same salesperson if there is evidence that the departure did not result from service or relationship issues. 0
- 7. steps to reducing account attrition microstepsfor salespeople LEARNTHE EARLY-WARNING SIGNS Often, there are “tells” of an impending departure a. reduced revenue. b. slow payment. c. messages not returned timely. d. resistance to discussing changing needs. Take the signs seriously. It’s easier to save a current account than to develop a new one. 1
- 8. steps to reducing account attrition microstepsfor salespeople OLDACCOUNT? BRAND NEW PROSPECT! a. recognize and acknowledge the history, but don’t rely on it as a reason the account should return—it has already proven not to be so. b. prepare as you would for any brand new prospect... research them online, look for evidence of likely needs, and create a Valid Business Reason. 2
- 9. steps to reducing account attrition microstepsfor salespeople USEYOUR BEST SALES PROCESS a. assess the prospect’s needs with fresh eyes; be aware of what went before, but don’t assume anything is still true. b. describe how your company, its products, and its processes, have changed, if appropriate, but don’t assume they’re naturally interested. c. find a problem or opportunity—and solve it. 3
- 10. “You can filla bucket a lot faster if it isn’t leaking.” Excessiveaccount attritionisasignof sicknessinabusiness. Treatitasseriouslyas youwouldtreataserious illnessinyourfamily.
- 11. accountattritionthanstayingcurrent witheachclient’schangingneeds— andrespondingaccordingly. there’s no betterway to prevent Connect your needs analysis to your response by downloading our free Needs Analysis Record form.