In this solo episode I talk through the four steps of the client value ladder and the skills you need to deliver value at every level. It's particularly relevant for you if you are managing the day to day client relationships but are also responsible for account growth and delivering on your agency's forecast. Many of us in agency account management know that acquiring a new client is 5 to 25 times more expensive than retaining an existing one (1) & increasing client retention rate by 5% increases profit by 25% to 95% (2), but another study by Gartner reported that a whopping 80% of a company's future sales will be derived from 20% of their existing client base! (3). This makes the skill of growing existing business very important. What's less well known, and also shown in another study by Gartner called 'Why your accounts aren't growing and what to do about it', is that the account management skills required to retain accounts are DIFFERENT to those required to grow (4). The report showed that providing exceptional service leads to retention, not growth. This means that as agency account managers we need to be thinking about how we need to behave differently if we're responsible for growing our existing accounts. The report concluded that mastering “client improvement conversations” increases your ability to grow an account by 48% and increases likelihood of renewal or retention of spend by 94% (4). If handled poorly or indelicately however these conversations could damage relationships and trust (4). 'Value improvement conversations' are defined by the three following actions: 1. Provide customers with a unique, critical perspective 2. Paint a vision of the customer's future business 3. Provide customers with an ROI on the entirety of the relationship I hope you enjoy this episode and come away with ideas for the skills you need to develop or that you are indeed on the right track with your client development strategy.
References:
5-25 cheaper: Harvard Business Review: https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
Increase profitability: Bain & Co: http://www2.bain.com/Images/BB_Prescription_cutting_costs.pdf
80% of future business will come from 20% of your existing clients (Gartner): https://www.forbes.com/sites/alexlawrence/2012/11/01/five-customer-retention-tips-for-entrepreneurs/?sh=4e6b38175e8d
Have customer improvement conversations: ”Why accounts aren’t growing and what to do about it” Gartner for Sales Leaders, 2019 https://www.gartner.com/en/sales/trends/account-growth
