Let’s face it: Now is a hard time to win new business. Across industries, budgets and teams are shrinking. Your customers have less money to spend—and when they do spend money, they need to see real results. A recent article from Harvard Business School reaffirms what we’ve always known—that customer-centric philosophies are the right path forward—while asking a critical question of B2C and B2B organizations: “What should be my minimally viable strategy to get through these unprecedented times?”
The article goes on to list several specific examples of customer-centric strategies. These may or may not apply to your organization, but they are definitely worth a read. Meantime, we’re going to step back from specifics and consider the common thread among all of these minimally viable strategies: A strong commitment to existing customers.
Across industries and company sizes, B2B organizations should make it their goal to truly engage with existing accounts. Start by understanding the impact of the pandemic and consequential recession on them, personally and professionally. Think creatively and act resourcefully to adapt to those changing needs. Now is not the time to cling to “the way it’s always been done.” If you’re able to stay nimble and deliver for your existing accounts, you not only protect the revenue you have, but also open the door to organic growth in the future.
Here’s why investing in existing customers makes financial sense—especially now:
- You’ll spend less. New business is expensive—not only to win, but also to get up and running. Your own internal budgets and teams might be shrinking, so you’ll want to prioritize resources to deliver on existing engagements.
- They’ll spend more. In more typical times, cross-sells and upsells can generate 70-90% of your growth. In a crisis, even satisfied, existing customers may not be able to spend more, but they are at least more likely to continue engaging your services, protecting today’s revenue and maintaining tomorrow’s growth potential.
- You’ll avoid churn. Customer churn is the worst of both worlds—you’re losing revenue from the customer and spending money to replace them.
Because it costs less to grow your existing accounts, organic growth is the most profitable form of growth. And because engaged customers will stick with you even when times are tough, customer-centric growth is also the most resilient approach. Below, we’ll outline high-level pillars of a minimally viable strategy.
1. Reduce New Business Overhead
It costs a lot of money (and takes a lot of time) to win new business. There’s advertising and marketing, pitching, and time spent on sales calls and follow-ups. That’s a lot of resources, especially if your teams and budgets are stretched thin right now.
Onboarding also takes time and burns resources;. depending on the products or services you offer, there’s a learning curve for both your internal team and for the customer. In a more normal environment, this is expected, and clients can take it in stride. But in the current economic landscape, customers will be anxious to see almost immediate impact. The clock is ticking to demonstrate value.
In contrast, your existing clients are already up and running. You know how to work with them, and they know how to work with you. If you develop new offerings in response to the current crisis, you can introduce them quickly and seamlessly to customers with a strong working knowledge of your company, products and services. You can quickly identify KPIs based on everything you already understand about their organization. This takes less time and yields higher return. Which brings us to our next point:
2. Protect Existing Revenue
Cross-sells and upsells from existing customers can yield 70-90% of a company’s revenue under normal circumstances, because existing customers are generally much more likely to invest in your premium products and services. Right now, your focus may be less on upselling and more on cross-selling as you introduce new offerings to protect your current revenue and relationships.
In an economic downturn, it’s a healthy practice to view maintaining current revenue as a form of generating revenue, in the sense that you avoid spending money to find new clients and you maintain relationships that will eventually grow again when the storm passes. As the wisdom goes, a penny saved is a penny earned. The focus now is avoiding churn.
3. Avoid Churn at all Costs
Churn is the worst of both worlds. Not only do you lose existing and potential revenue from a key customer, but you also force yourself to invest in finding new customers to replace that revenue. Churn is a fast way to make yourself less profitable, especially when it’s so difficult to find new customers in the first place.
The good news is, existing customers are much more likely to stick with you, even when things are challenging. Key Account Management can help you build strong, stable relationships.
4. Implement (or Prioritize) KAM Practices
Hopefully we’ve established why it makes financial sense to invest in existing customers. So how do you do that? Key Account Management is the way to invest in customer engagement. It starts by identifying key customers, and using a comprehensive, dedicated approach to manage that book of business. This approach rests on 3 pillars: People, process, and technology.
People means orienting your teams towards relationship management. Functionally, this means giving them time every day to reach out to, engage with, and listen to clients. You may not be hiring new talent right now—and your existing teams may be running lean—but it’s never been more important to prioritize client communication, as user knowledge will be indispensable when it comes to adjusting your approach and delivering for your current customers. Make sure your team understands that existing relationships are the priority, and carve out time both for client communication and accompanying accountability practices.
Process means you have to set your teams up for success by establishing clear, internal expectations for client management within your organization. Our KAM Process is an example: Know your client. Act on their behalf. Measure your results. Repeat. Of course, that’s just the high-level summary—there are specific tasks and behaviors within each of those pillars, too. For a more in-depth look at a high-functioning KAM process, download our Big Book of KAM.
Whatever process you follow, keep it clear and consistent throughout your organization. Not only will you improve client engagement, but you’ll also make things easier for yourself. You’ll make accountability more seamless. Managers will have leading indicators for measuring KAM performance, rather than waiting for lagging indicators (when it may be too late). Most importantly, you’ll create continuity for your clients.
Technology is the final, critical component of a high-functioning key account management system. The right technology prompts the actions and behaviors that make KAMs successful, while creating a single source of truth for teams. But good tech is not enough: It only works when it supports a strong process executed by a strong team.
When you have people, process, and technology working together to anticipate customer needs, exceed customer expectations, and demonstrate value, you’ll infuse your existing relationships with incredible resilience. As customers see your commitment to them, they’ll find room for you in their budget now, and room for growth when things open up again. They’ll spread the word internally at their organization and beyond. They’ll stick with you through tough times.
So if you’re wondering how to win new business right now, step back and reevaluate your minimally viable strategy. It may be that everything you need to weather this storm is already in your current book of business. You just have to keep it there.
In the best of times, Key Account Management is an indispensable tool for reducing overhead, preventing churn, and driving organic growth. In the worst of times, KAM is an indispensable insurance policy for existing revenue. Key Account Management helps you hold on to your current accounts, which saves you money in more ways than one, and keeps the door open for growth in the future.
Now is the time to invest in the customers you already have, using people, process, and technology to engage them in new ways, and keep them for years to come.
To see how Kapta can help, schedule your personal demo today.