Category: Account Planning

Renewing Contracts | The Missing Bullet Holes

19/10/2018

Source: Shutterstock

Imagine, sellers would be rational individuals like Mr. Spock, the fictional character in the Star Trek media franchise - the commander of Starship Enterprise who always followed the rules of logic, never distracted by emotions.

I agree, this is neither realistic nor desirable to move mixed human-vulcans into sales roles. Some sales leaders would not want to lose their financial controllers either.

Experience tells, winning a new customer means 6 times more investment than maintaining an already loyal customer. Isn´t this a really good reason for you as a commander to go deep on what is driving the Enterprise towards customer loyalty?

I don't know anything, but I do know that everything is interesting if you go into it deeply enough.
Richard Feynman, Nobel Prize in Physics 1965

This usually is the point where measuring the world starts and big data is put into action. It begins with identifying statistically significant parameters. Try to understand what sets a successful contract renewal apart from those which did not renew. If you want to go beyond anecdotal evidence, a lot of data points are involved, but the effort is worth it. Aberdeen Group research states that Analytically Grounded Sales Teams average a 2.7 times greater annual increase in customer renewal rates. Meanwhile, such data analysis is well supported by BI tools or even Artificial Intelligence engines and it is backed by external business consultant experience.

Business Acumen remains key to success in increasing the likelihood to renew a contract. Even though you may find significant correlations, it´s the causation which makes it relevant. The correlation between growth on ice-cream sales and the outbreak of bushfires in southern California maybe a strong correlation but it´s not the cause. Mind the difference between correlation and causation.

Turning good analytical work into concrete action is what makes the difference in business. Overhasty conclusions and bias on this last but most important step may put your whole endeavor at risk. Following historical anecdote shows why.

The United States Statistical Research Group (SRG) once used to be on mission to help win world war II. Sales is not war and trying to find a way to minimize the loss of airplanes through better armor is not business optimization. Surprisingly enough, we still can learn from their work.

Source: Aberdeen Group, Sept. 2016 | "YoY Advantages of Analytical Grounded Sales Teams"

When American planes came back from engagements over Europe, they were covered in bullet holes like a Swiss cheese. But the damage wasn’t uniformly distributed across the aircraft. There were more bullet holes in the fuselage, not so many in the engines. So, how can the armor be optimized on the weakest parts without negatively impacting the overall performance of the aircraft?

Columbia University professor Abraham Wald came up with a surprising answer: The armor, said Wald, doesn’t go where most of the bullet holes are. It goes where the bullet holes aren’t - on the engines!

You’d have planes coming back with bullet holes all over the wings, the fuselage, the nose — but none at all on the engine. Simply because those severely damaged engines did not return from their mission and therefore don´t show up in your analysis. Protecting engines and pilots better, increased the likelihood to return from the battlefield.

By McGeddon - Own work, CC BY-SA 4.0, Link

Taking the recurring business scientifically to the next level implies a lot of work but it is the right choice in the digital era. Even if you decide to start small, next time you assess the feedback of your customer satisfaction survey with your teams, make sure you especially understand where the bullet holes are missing - it might well be your blind spot hiding the lethal risk to your business mission.

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Account Planning | Busting the Napkin Myth

18/9/2018

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Source: Shutterstock

One myth keeps following me during my two decades in direct sales: Best Account Plans fit on Napkins!
Wow, what a bold statement - it feels equally untrue like: brightest minds fit into double-digit IQs.

Everything should be made as simple as possible, but no simpler.
Albert Einstein

Despite all standardization efforts, enterprise business environments keep getting more complex. The ability to innovate simple and effective approaches in business practice has become a competitive advantage. Oversimplification, however, is tempting but remains an act of negligence.

Account Planning means planning for results. In a number driven world of sales, the decomposition of an aspired revenue goal is psychologically the first step to accepting the challenge. While SMART goals and respective objectives may well fit on a small napkin, they by no means are the plan. I would even argue that it is the wrong end to start with - relevant account plans are starting with the customer.

In recent years, Business-to-Business sales has evolved in various dimensions, redefining how we engage with customers:

Sustainability - With Digital Transformation and the move to the Cloud, customer Business Models have embraced external vendors to become integrated part of the value chain. Continuously earning trust, adhering to ethical and legal standards, and delivering positive customer experience are non-negotiable foundations to sustainable commercial success. Yes, the definition of success is far more than transacting in the short term or "making the number" only.
Customer Alignment - Cutomer Centricity is all about understanding the customers business priorities and translating them into strong and precise value propositions. As much as, I agree no Account Plan should be called complete without customer validation. Aligning with customer key stakeholders on the plan and finally signing off on a joint business roadmap is what makes a good plan a demand generation engine.
Teamwork - Enterprise sales has become a team sport of specialized professionals, all working towards joint goals. It´s the heart of every effective Account Plan to ensure a common understanding and efficient orchestration with all stakeholders - internally (Sales, Marketing, Engineering, Consulting, Support, ...) and externally in the ecosystem (Partners, Advisors, Influencers ...).

Account Planning is a reflection on the evolution in sales but even more, so it is a yardstick on the sophistication of your teams work - what a great coaching opportunity or moment to personally benefit the customer relationship in form of executive sponsorship.

Imagine the business potential of getting the perception right by moving away from a necessary evil and abandoning the disrespect which a napkin implies.

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Renewing Contracts | The Missing Bullet Holes

Account Planning | Busting the Napkin Myth

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