How do you retain more accounts as you grow?
Collecting and analyzing sales data indiscriminately is like endlessly tossing buckets of coins into a wishing well…and believing the act itself will make all your wishes come true for your business or your sales team.
While numbers don’t lie, our misjudgment of their value (e.g., what we do/don’t collect, whether we keep information siloed, or whether we track the right or wrong things) can lead to painfully expensive mistakes. That’s why I devoted an entire chapter of my newest book, Right on the Money, to look at how you must collect the right data and draw the appropriate conclusions from it.
You must think critically about this before you allow data to drive your decision-making. Not after.
Let’s look at one element of that larger task: how a skillful use of data can help you uncover early indicators that a buyer may be contemplating a switch, so you can move fast to prevent the loss while still pursuing growth.
To do this, I created the Engage Early Warning System originally for a client in the business software sector (where buyers are notoriously fickle). Today, however, we’ve been rolling it out to our clients across all industries. It’s a tool that predicts 85% of cases where a company stands to lose a customer in advance of the loss.
You can build your own early warning system and retain more accounts as you grow. Here’s how.
Build an Early Warning System and Retain More Accounts As You Grow
1. LOOK FOR PATTERNS
First, review all customers lost over the last two years. Look at the behaviour patterns with each one. My system identifies more than two dozen specific traits and then pinpoints those by posing three categories of questions:
What were buyers doing? Actions tell us plenty if we pay careful attention. If even one buyer left you, determine why. Look at what happened before their departure. Here are some of the questions I ask clients when completing this exercise:
• Had buying already slowed or stopped?
• Did they have a merger or acquisition?
• Did they start asking you unusual questions about your invoices or equipment?
• Was there an organizational change?
How engaged were they? You can’t influence anyone who isn’t listening. Open your CRM. What key interactions did you harness…or miss? For example:
• Did they stop responding to emails or calls?
• Had it been 30+ days since you heard from anyone?
• Were there new stakeholders at the company that you did not know or have an active relationship with?
What trends do you see? Look at the buyer’s most recent purchasing history. Was the annual value of transactions with them increasing or decreasing? Examples:
• Had their ordering cadence slowed?
• Did they start to question every invoice?
• Had they started paying late?
• Were they asking for regular quotes that never resulted in an order?
2. CRUNCH THE NUMBERS
When you have the answers to that first set of questions, crunch the numbers. The next stage in the Engage Selling Early Warning System is analytical. We use mathematical tools to determine which factors signal account risk and how much weight to apply to each. For example, our client’s consider specific behavioural traits such as: decreasing annual buyer value; decreasing deployment of new sites; fewer customer support cases opened; fewer sales-related activities reported in the CRM; and fewer new contacts created in the CRM for a particular buyer, and their relative importance to whether a customer defects to the competition or not.
3. ASSIGN A SCORE
Once we identify and assign a relative weight to these factors, we calculate a score for each account, thus defining the threshold of risk for buyer defection. Equipped with such data, you can take action to hang onto those buyers most at risk of leaving.
4. PULL IT TOGETHER
Here’s an example of a client who pulled together these steps to gain much-needed insights. They had a long-time customer that had stopped returning their calls. They’d not fully noticed the shift until the next thing happened: the customer suddenly reached out one day and asked for their price list. That’s when they started to connect the dots. They saw the pattern, crunched the numbers, and assigned a score. From that, they concluded the customer was price shopping with the competition. They were then able to jump in quickly to meet with the customer and save them from defecting.
Even better, they were also able to apply their findings to other customers who were not returning their calls and proactively reach out to set up meetings. And most importantly: they put a program into place ensuring customers stay engaged, and that sellers have relationships with more stakeholders so there’s always someone to speak to. In other words, they put preventative measures in place to ensure customers were much less inclined to entertain conversations with the competition.
MORE THAN ONE REASON TO GET SERIOUS ABOUT YOUR DATA
Say goodbye to the wishing well approach to data collection and analysis: the health of your business and your sales team depends on you doing this.
And remember this: opting instead to be more strategic has benefits that extend well past the ability to prevent lost sales. It also ensures you stop wasting time and energy on measuring things that simply don’t matter. In the second of this two-part series, we will look at that costly risk…and how to avoid it!