Integrated Revenue Management Strategy
I can recall my parents telling me early in my entrepreneurial journey, "if you don't have paying customers, you have a hobby not a job". As you can guess, my folks shoot straight. But it is that delivery that developed the vision and resilience necessary to succeed as an entrepreneur. Those words lead me to this train of thought, if I need customers to have a job and not a hobby, then it is important for me to KEEP my customers so my job does not become a hobby.
I was fortunate that during my career that I had the opportunity to be employed as a Retention Specialist, a Win-back Specialist, a Business Development Rep, and an Account Manager. Why is this even important (we are going somewhere I promise, I too hate suffering through speaker's self indulgence) and each role allowed me unique insights in the sales management game. In short, if we want to be effective in consultative sales, we need to understand the nuances in the Retention, Acquisition and Win-back of accounts: RAW.
With this strategy we lean on the 80/20 rule, specifically understanding that 80% of our revenue comes from the top 20% of our accounts. This knowledge then informs and influences how we spend our time. Through no fault of our own we lose about 8% of our accounts year over year, so we need to always look to grow by a minimum of 15% year over year. And if we are looking to grow year over year, we can never stop acquiring new accounts. Then there is also the monthly focus on winning back accounts that have left the fold.
At least that was the sales game prior to the proliferation of online sales, and the onset of SAAS. This new world is driven and influenced by what can be found online. So the strategy that what was once simply R(etention), A(cquisition) W(inback) has now added two additional parts: E(ngagement) and L(oyalty). Now the key to Retention is based on the onboarding. How we earn the business (understanding and identifying the clients needs and solving them), sell ourselves, the company story, and our solution, determines how well our clients remain connected to our brand. And then our goal is to work to earn the clients loyalty.
The combination of our company story and our value proposition create the stickiness that keeps our clients feeling good about being associated with our brand. There is a reason why there is such a cult feeling about the color of text bubbles. In the grand scheme it is really an inconsequential thing, but it matters. That is the type of loyalty we are talking about. How do we create that with our customers?
Again it starts with how we onboard our new customers. We will dive into this at a later time. Know that there is a process, and it is not a mystery to us.
And going back to the 80/20 rule and keeping the client base. The focus here is very important to keeping the revenue base allowing us to truly grow. We are bombarded with so many KPI and concepts for working on keeping our customers. When the truth of the matter is we only need to focus on Customers, Frequency of orders, and Average Customer Value. If we can impact these three objectives, we will find measurable results.
Recently I had the opportunity to share some of this information with a group of business leaders and it was very impactful to me, that so many of us are concerned with retention. Given the current business conditions (layoffs, inflation, economic uncertainty, the elections) it is no wonder that so many of us are concerned about our revenue. But in these times, there is so much opportunity for growth. Now is an amazing time, to "buy low...". Translation, stay calm, and keep it REAL-W.
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