Account Insight: How to Get It and Use it to Grow Revenues
In this post, we will dive into Account Insight. This is a fundamental part of building an effective ABX strategy. We will review what it is and how to get better at this. This is about knowing how committed your customers are, their future needs, how likely they are to give you business, and what you need to be more successful with them.
But first, a quote…
…as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know… Donald Rumsfeld
As we all know, it’s much easier to win more business from a current customer than it is to win and get business from new customers. Maybe 4-10X easier. And the more you know about your customers and real account insight, the better you will do at growing revenues with them.
There are many different ways to get better intelligence about what’s happening with your existing customers.
The best-known methodology is the Netpromoter Score (NPS). This is based on the “One Question,” i.e., the likelihood to recommend your company. It’s a simple way to survey for satisfaction across your clients, but it has limitations in B2B.
Limitations of NPS for Account Insight
The Netpromoter Score has made a significant impact in helping companies improve customer satisfaction. It is especially effective in B2C consumer businesses where you are marketing and selling to individuals who are often product users.
The premise of NPS is that the “One Question,” how likely are you to recommend this product to a friend, is a proxy for satisfaction, especially when the respondent gives feedback on why they gave this answer.
NPS works well in B2C markets, but it’s hard to make it work as effectively in B2B.
If you get user feedback on your product, then NPS may be fine. However, if you are trying to get a clear picture of all your customers’ satisfaction with you, then NPS has shortcomings.
Why? There are many different stakeholders involved. This means you need to get a representative sample from the key stakeholders and gather sufficient feedback so your team can develop a plan to act on the feedback.
The common problem we hear with using NPS is that survey participation can be low, feedback is shallow, and hard to act on. And when the sample does not represent all the key stakeholders, the responses are biased and may be misleading.
You may need feedback from the C-Suite, VPs, Directors, and Managers to get a complete picture of how well you are positioned in your accounts. If your responses are primarily from managers, but very few of the VPs of the C-suite respond, your picture of the state of your relationships is skewed toward the managers’ opinions. You may be getting a rosy picture from the managers without knowing that senior executives who manage budgets and decide on solutions are starting to look elsewhere.
NPS is a good leading indicator of customer satisfaction, but you need to go deeper.
It can tell you that a bomb is about to go off in the neighborhood but not precisely where it is and how to defuse it.
The other issue is that satisfied clients are not necessarily committed clients. In his book, the Loyalty Effect, the creator of NetPromoter Score, Frederick Reichheld, says that 60-80% of customers who said they were satisfied defected to another vendor. So, if your customer satisfaction survey tells you that your clients are satisfied, don’t get comfortable. The odds are that they are open to an offer by a competitor.
How To Gather Better Account Insights
Ideally, in assessing customer satisfaction, you will determine several critical things: Which customers are committed, which customers are at risk of defection, what you need to do to serve them better and how to grow your business with your customers.
It’s hard to imagine more important information than this!
So how do you do this effectively?
The following is what we regard as best practice. It looks like a great deal of work, and that’s because it is. It is much less work than dealing with the consequences of a surprise defection.
If you do this well, it can transform your business, but poorly executed customer insights and satisfaction assessments can, at best, tell you very little. They may tell you false information that can mislead your strategy.
Here are the recommended steps to take.
- Create a Formal Client Assessment Project – Resolve to prioritize this issue. Formalize the process by making it a project that your firm’s leadership team endorsed (or better yet initiated). Get buy-in from all the key executives on your side so that they support this.
- Prioritize candidate customers for assessments – A rule of thumb is to get feedback from the customers who represent at least 50% of your revenues in aggregate. It would be best if you talked with any customer whose departure would create significant turmoil. Prioritize customers who represent the greatest potential growth and those who would create the greatest damage if they left.
- Determine your best method for the assessment – If you only need to get feedback from 10-20 or so clients across your top customers, you could get detailed feedback through in-person or phone interviews. Interviews may be impractical if you need to get feedback from more than that number. In this case, you could get feedback through an online survey. You could do this through a tool like Survey Monkey, but you could consider a specialist firm like ours or Relationship Audits which has a very robust way of doing this. You may want to consider a mix of both – online for the mid to junior-level participants and phone-based for the most important and senior stakeholders.
- Get your clients’ buy-in – Most clients will appreciate that you are doing this to ensure you are addressing their needs, especially if you position this as a proactive initiative to ensure that you have the right resources. This could be a warning sign if they don’t want to participate. Be concerned.
- Design a survey that will uncover the truth about your relationships – You are unlikely to get sufficient information with 2-3 questions. In our experience, you won’t uncover the truth in less than ten questions, especially in an online survey. The question set should include likelihood to recommend you, their priorities for next year, how well you deliver against expectations, what they think you do best, what they think you should improve on, and what changes they would like to see.
- Aim for more than 75% participation – If you are conducting this as an online assessment, it is very hard to get 100% participation. Not impossible, but a big hill to climb. In our experience, 75% is high enough to get reliable insights about the state of your key relationships. The key thing is to achieve a representative sample across your customer stakeholders. This means having a system that can send out multiple reminders and track who has not responded so that you can reach them in a more targeted way. This might include asking their boss to nudge them to respond or making a personal outreach.
- Review findings internally and be objective – Have a process to discuss the findings with your leadership team. Avoid blame in adverse situations. Be positive and constructive in how you will make improvements. Best of all, where you have identified positive findings, figure out how you can use this insight to gain more business.
- Present your findings back to the client – Once the process is complete, you must review what you have learned with your clients and, most importantly, an action plan for what you are going to do about it.
- Check back later on progress – After six months, check back with the senior clients to determine how you are progressing against the action plan.
- Rinse and Repeat – Plan on doing this process annually. It conveys to the client that you are committed to a long-term relationship underpinned by continuous improvement.
Developing a Growth Plan From Better Account Insight
The first step in developing a growth strategy with your existing customers may be to re-think how you segment them. For example, use your satisfaction survey to put them in four buckets
- Committed: Customers who account for significant revenue have indicated that they are happy with you and indicate long-term commitment.
- At Risk: Customers who account for significant revenue have indicated that they are dissatisfied and may be at risk of defection.
- Growth Candidates: Customers who account for lower revenue but could spend more with you have indicated that they are happy with you.
- Maintenance: Customers who account for lower revenue are neutral or dissatisfied with you.
Growth Strategies Based On This
Here are some strategies that will come out of this activity.
- Convert Committed into Evangelists – In short, your committed customer relationships are extraordinarily valuable in helping you acquire new customers. How can you leverage these relationships to help you convince prospects to become customers, their future needs and how does this translate into your product roadmap? The possibilities here are limitless.
- Address flight risks- Your most urgent priority is fixing relationships with at-risk high-value customers. The first step is communicating that you have heard them and are acting on their feedback. It helps if this comes from a senior executive, possibly your CEO. You then need to develop a specific and detailed action plan about how you’ll be able to address these issues. This should include what you need from them to be successful. Once you have communicated this to them, the key thing is to have check-ins scheduled to discuss how you are progressing.
- Determine how to upsell opportunities: If you have designed your customer satisfaction assessment effectively, you will have insights from these customers on what they need and what problems they need help with. This is the basis of a plan to grow your revenues with these customers. It may not give you all the answers, but it creates an opening. Your customer success and account managers should return to these customers and thank them for participating, look at what you have learned, and ask them to clarify. This will get them to expand on their need, creating possible upsell opportunities You can use this to make sure that they know about all the other things you can provide them. Ask for introductions to other departments who may be interested in other solutions you can provide
- Monitor Maintenance Clients – These customers you would prefer not to lose but expect to grow or churn. The key thing with these is to keep monitoring them and determine which ones can move up into bucket 3 at some point.
I hope you found this helpful. At healthlaunchpad, we hope clients with. We can help you get feedback, and develop and execute effective growth strategies. Let me know if you are interested in learning more.
Originally posted on LinkedIn.