You haven’t been able to put your finger on it, but you know something is off.You feel like your team isn’t making the most of its time and isn’t collaborating well enough. You also see that they consistently fail to reach their sales goals. They tell you that your expectations are too high, and after a while, you start doubting yourself, but you can’t help but wonder if improved account management efficiency could make a difference. At the very least, could it get them closer to the goals you set? We ran the numbers so you won’t have to.
Spending Too Much Time on Account Management Logistics Could Cost You $265,140/Year – Before You Count Lost Sales Opportunities
According to Salesforce, “the average sales rep spends almost 4 hours per week updating his CRM – wasting more time than on coffee breaks, Facebook, Twitter and all other time wasters combined,” reports RingLead. Despite that, the average salesperson manages to complete less than half his updates.
At the same time, that same salesperson spends only half his time on leads, opportunities and current accounts.
Source: Salesforce via RingLead
According to Indeed, the average salesperson earns $53,028 a year. That means that approximately $26,514 you invest in every one of your salespeople goes to logistics instead of actually growing your company. If you have 10 salespeople, that’s $265,140.
But that’s just the cost of the time your salespeople waste on logistics.
What about the lost opportunities to nurture and convert sales?
According to Oracle, 89% of customers have switched brands due to poor customer experience. If your salespeople and account managers only have 50% of their time to dedicate to leads, opportunities and current accounts, you can bet your company is leaving a lot of money on the table.
The Costs of not Building Emotional Relationships with Current Accounts: Up to 9X Higher Customer Acquisition Expenses and 71-95% Revenue Loss
As we recently reported, “it’s 9x more expensive to acquire new customers than to retain current ones,” and it takes almost an extra year to return your investment in new customer acquisition vs. your investment in an upsell – partially because “it’s 50% easier to sell to existing customers than to prospective customers.”
Customers who know you and the results your company can deliver already trust you. Therefore, they can save the great amount of time and money it takes to recruit new vendors – and, more importantly, buying from you again becomes less scary than buying from your competitors.
B2B buyers are often terrified to make acquisition suggestions because making these suggestions means they might cause a large financial loss to their companies.
Companies that invest in nurturing emotional connections with their contacts at client companies will have a chance to prove the long-term value both the company and the executive herself gets from the product, which could increase purchases by 71%.
Even better – companies that increase retention rates by a mere 5% should expect 25-95% extra profits.
Infographic by Invesp
According to the Salesforce infographic above, salespeople spend only an average of 8% of their work time on current accounts.
That’s less than 3.5 hours per sales rep if your salespeople work 40 hour weeks.
That’s definitely not enough time to build emotional connections with every key customer or keep track of what’s going on in every account.
As you’ll discover in a moment, assuming your customers are happy, instead of making sure they are, could cost you tens of millions of dollars.
If Your Account Management Doesn’t Ensure a Cross-Organizational Focus on Customer Success, You Risk 56% of Your Customer Retention Dollars and $163,215 of Your Investment in Salaries
Just because a customer looks happy, doesn’t mean she is. As Vantage Partner shares, “in early 2010, a Fortune 500 technology company’s five-year $100+ million services contract with a large customer was approaching renewal. The customer remained fairly satisfied with the service delivery and price – and seemed to have no intention of pulling out of its relationship with the supplier. Months later, however, the buyer had switched to a new vendor, ending the relationship with its longtime supplier.”
While Vantage Partner doesn’t go into the details of what actually got the customer to switch suppliers, it does make it pretty clear that if your account management isn’t efficient, and you team isn’t truly on top of what’s going on with key accounts, the financial consequences could be challenging to recover from.
Research shows that, in order to truly be on top of customer issues and to truly ensure success, your teams across the organization must collaborate with one another.
According to Experiences: The 7th Era of Marketing, Aberdeen Group found that “companies with the strongest omnichannel customer engagement strategies retain an average of 89% of their customers compared with 33% for companies with weak omnichannel strategies.” That’s possible only when you have a system to record every customer interaction, including every stage of their success journey, and make sure it’s available to everyone on your team.
To give you an example, here’s a screenshot of the account management dashboard ContextSmith offers:
But weak omnichannel experiences are inevitable when approximately 60% of data isn’t updated in your CRM, as shown in the Salesforce infographic above.
That leads to this concerning finding from The McKinsey Global Institute, as reported by SaneBox, “that an average employee spends 13 hours a week reading and responding to email. That’s by far the most time-consuming work activity, at 28% of our work time. This equates to 650 hours a year spent on completely reactive, low-volume work.”
To link back to an earlier point in the article, that’s the equivalent of $6,181.5 a year per salesperson, and $10,140 a year per account manager, according to Indeed. If you have 10 of each, that’s an annual loss of $163,215.
But the worst part is that even if a customer does show signs she might be thinking about abandoning your company, with so much time spent on just trying to catch up, there won’t be enough time to get every necessary department to respond well enough and fast enough. Executives could easily find themselves blindsided at client meetings, unaware of any potential conflict, even though the client has repeatedly asked for problem resolution.
It’s Not too Late to Ensure Effective Account Management
True, the best day to ensure effective account management across your company was the first day you opened your doors. But building companies takes a lot of work. It’s complex and it’s messy.
The fact that you have the awareness of what’s missing already puts you ahead of many other companies.
Remember, the second best day to ensure effective account management is today.
So don’t wait. Schedule a meeting with your team, start strategizing and set a public deadline, to ensure you’re as effective as can be by next year.