Key accounts are the lifeblood of your business. Losing even one of these VIP clients can be a huge blow to your business. Although you’d prefer to retain key accounts forever, it’s impossible to have a churn rate of zero.
Nonetheless, minimizing churn is important for the longevity and stability of your business.
Boosting retention means that you experience the continued benefits of a long-term relationship with these top-tier accounts such as:
- Revenue stability: providing a steady revenue stream.
- Cost-effective growth opportunities: Retention and expansion is known to be more economical than growth solely by new customer acquisition and drives greater customer lifetime value.
- Referrals and advocacy: Long-term key accounts often become excellent referral sources and help attract new business by providing things like testimonials or case studies.
- Market intelligence: Aligning with key accounts enables you to gain deeper insights into their specific industry or market segment while gaining their candid input to help you refine your products, services, and business strategies.
With so much at stake, it’s essential that your key account managers (KAMs) be able to recognize the critical signs that their clients are at risk of churn. Then they can spot them and proactively address these issues before they lose these top customers entirely.
Churn Risk Signs
Train your KAMs to recognize these signs so they can take steps to prevent key accounts from churning before it’s too late.
Decreased Engagement
Clients who stop or reduce their participation in account planning or are resistant to schedule meetings may be considering taking their business elsewhere. Other engagement decreases to watch for include fewer calls, emails, or visits to your platform. It could mean that their needs have changed, or they are losing interest in your product or service and are seeking alternatives.
More Negative Feedback
Negative feedback, in and of itself, is not a sign that a client may be at risk of churning. In fact, negative feedback is preferable to having a client who becomes unhappy, goes silent, and takes their business quietly to a competitor. But, if a top-tier account shows a dramatic uptick in support tickets and starts complaining about seemingly everything, there’s likely a broader issue. That’s when it’s time to dig deeper to find out what has changed and determine how to address or resolve the developing problems before they become unmanageable.
Slow or Negative Account Growth
When a key account’s business levels off with your company or decreases unexpectedly, it’s best to investigate. Is the organization in the process of downsizing their staff to cut costs or have they started transferring some of their business to a competitor? Whatever the reason, it’s important to recognize this downward trend and determine the cause. Only then can you take steps to retain the customer if they are, in fact, trying to defect.
Organizational Changes
It’s essential to keep key account org charts up to date. Otherwise, you risk learning that your champion has left the customer’s organization for a new position. This can spell trouble for your business in the long term which is best proactively addressed prior to the champion’s departure.
Other organizational changes to stay abreast of that can negatively impact the stability of your relationship with key accounts are events like mergers and acquisitions (M&A), or the hiring of new leadership. Both events can be more complex to navigate since new players often have relationships with prior suppliers and may not be open to developing a relationship with your organization. Either way, early awareness of these changes gives you the best opportunity to address them.
Financial Issues
If a key account is experiencing financial difficulties and implements budget cuts, downsizing, or mergers, to contain costs, it’s best to be aware. KAMs who have established themselves as a trusted advisor within their accounts will be well-positioned to retain this customer proactively by helping them navigate this difficult time. But, if the customer only sees your relationship as that of another vendor, they’re more likely to switch to a less costly solution.
Lack of Product Adoption or Value Realization
Accounts that fail to fully adopt your product or service may not be achieving their desired outcomes or realizing the value they sought when deciding to do business with your organization. Monitoring usage and tracking onboarding progress are a couple of ways to proactively detect these issues. Creating and maintaining current account plans, then monitoring progress with customer-preferred metrics helps KAMs catch these issues early and adjust accordingly.
Resistant to Renewal Discussions
A sure sign of trouble is a top-tier account unwilling to discuss an upcoming renewal. This is a strong indicator that your key account is preparing to defect to a competitor. As soon as you see this happen, it’s best to take action and investigate further to gain clarity and determine if there is any way to prevent them from leaving.
Reduced Referrals or Advocacy
A key account is likely at risk to churn if it suddenly stops providing you with a steady stream of referrals and fully supporting your business with testimonials and success stories. And it’s time to investigate to determine the issue and work toward resolution if possible.
Teach KAMs to Recognize At-Risk Accounts
When KAMs know how to read the signs they’re prepared for early detection of at-risk accounts. This gives them more time to investigate issues and take steps to retain top-tier accounts to minimize churn.
Looking for additional ways to train your key account managers and minimize customer churn? Register for this important Kapta webinar on June 22, "Risk Management Strategies for KAM Teams".
