Companies have never had a higher potential for cross-sell opportunities, but they have not been taking advantage of their new expansion opportunities.
In a June 2017 report called “Driving Growth Through Smarter Account Management,” Gartner assessed data from over 600 B2B sellers and over 700 customers in 24 industries, and it conducted structured research interviews with over sales leaders in over 60 companies. Account management is responsible for identifying account growth opportunities, in addition to offering exceptional customer service and support, encouraging product/service consumption, and incentivizing customer retention/renewal.
According to this research, from 2014 to 2017, 76% of existing sales channels took on new responsibilities for cross-selling newly-acquired products, which increased their overall portfolios by 2.3x. However, only 28% of sales teams felt that they were meeting their new account growth objectives. The results unequivocally showed that most sales teams were implementing an “anti-shrinkage system,” which inadvertently prioritizes customer retention over account growth.
Gartner made three key findings:
Account management teams used loosely defined metrics that did not comport with their growth goals. 51% of sales teams had distinct retention and growth goals, but only 9% of their specific goals were focused on growth.
Account managers were significantly more risk adverse than other roles responsible for account growth. Gartner concluded that there was a 12% differential between account managers and hunters regarding the likely conversion rate to pursue a growth opportunity.
A striking 88% of account managers believed that providing above-and-beyond customer service was the surest way to grow the account. However, while service is necessary for customer retention, there is no statistically significant relationship between service and growth. If the level of service is good enough to retain the customer, spending time providing above-and-beyond service is not going to do anything and will not result in growth.
Account growth is driven by customer improvement (48%) and by confidence in the account team (11%). Gartner defined “confidence in the account team” as increased customer confidence by exposing the customer to a broader team. Customer improvement involved the sales team providing the customer with a unique and critical perspective on business improvement, laying out a plan for improvement, and outlining the ROI of their commercial relationship with the customer.
Further, customer improvement was the only significant factor impacting the likelihood that a current customer would not consider a competitor when faced with a renewal or repurchasing decision (i.e., account defense).
The report concluded that account managers need to shift “from backward-looking, supplier-focused service to future-focused, customer improvement conversations.”
Ecosystems provides an interactive platform that helps sales teams have collaborative, customer-improvement conversations that will assist with your cross-sell opportunities. Contact us at VMO@Ecosystems.us to learn more.