Many businesses’ main priority is generating new leads. Well, of course, isn’t that everyone’s main priority?
Well, not everyone…
There is actually a way to generate more revenue by not generating new leads. Especially in the tech industry, companies have the potential to grow revenue from their existing client base, but instead, they go after new leads only. They start new telemarketing campaigns to generate new prospects and a year down the line, growth is usually flat.
All in all, vast amounts of money is spent chasing new leads. And according to aForrester report, less than 1% of B2B leads are converted into paying customers. Even ‘top performing’ companies have a conversion ratio of less than 2% – so what is going wrong?
Why are we spending all of our money and efforts on developing new leads, when we have a base of great customers who could actually fund that growth, without the cost, worry and wasted time?
So what do we have to do to get our existing clients’ business? Do our jobs well, deliver a great service and be on hand to provide additional complementary services at the right time, to fix the right problem.
Land and expand – focusing on the existing client base
One of the ways that C24 (a Six Degrees Company) has fuelled its growth, is through our focus on improving our end to end customer engagement and service delivery – by trying to improve customer experience by even just a few points at each phase of a client project.
I call this a process of ‘land and expand’ – basically, ‘landing’ in a customer when you win a project, and then looking for chances to ‘expand’ what you deliver to that account in a way that makes sense to you and the customer. It’s a win-win scenario.
To do this, we broke our sales, project delivery and ongoing support processes down into segments, and looked at how we could improve each different element in a bid to keep our customers happy and hopefully increase our position of trust within accounts.
In our Sales segment, we created standardised client presentations to present the C24 story, and offered personalised marketing support to our sales teams. For instance, our analytics Account Manager wanted help to better articulate C24’s Bi24 analytics tool outcomes to legal clients, so as a management team we helped with personalised, targeted marketing support to underpin his sales campaign.
Within the Account Management segment, we overhauled our entire account management process and implemented Key Account Plans for our strategic accounts, conducted sales training sessions and integrated monthly management reporting processes to ensure we were tracking the correct metrics and driving the appropriate behaviours across our teams.
On the Support side, we created personalised handbooks for when we transitioned a project from implementation stage to ongoing support – to show the customer how we carefully handled their service and migration process. We also spotted that we needed to increase the headcount in our Project Management team to improve project handling as the business grew.
We also added resources to our Tech team and implemented a dedicated Help Desk contact approach to our larger customers to improve their experiences of dealing with support calls.
None of this focuses on new lead generation. Obviously, we always have one eye on new business generation but we make sure that new client acquisition is not our primary focus – but that we are instead focused on minimising existing customer attrition rates, alongside new business development.
Improving client experiences and reducing customer churn
For us, a key measurement of success often centres on customer churn rates, and our ability to minimise those churn rates through better service delivery and improved account management. It’s well known how much more it costs to acquire a new customer than it does to sell to an existing client – and the time spent chasing down all the new prospects that never convert to customers is wasted sales time that could be spent on developing existing relationships.
What I’m proposing is that, for an experiment, we instead direct the same sales and marketing methods that are funnelled towards new lead development, into existing client activities.
This could take the form of focusing acquisition sales staff on uncovering new opportunities within the company’s existing client base. This may be the role of your current farming reps, but in fact, sales staff often don’t approach existing accounts with the same vigour that acquisition reps handle their new prospects.
Microsegments, heat mapping and lead development
Last year, C24 undertook an exercise to critically review everything we knew about our key accounts and created heat maps of what we did and didn’t provide to determine how we could better align ourselves to our clients’ strategies. It’s impossible to do this on every account, but we take some elements of this exercise and overlay it across many of our client accounts in our processes today. During the exercise, we micro-segmented our client accounts across each area of their business and each area of our service offering to find out where there could be potential opportunities. From this exercise, we uncovered a number of new opportunities in each account to investigate – and because of our existing relationships with these accounts, we could quickly find out if the lead had the potential to be a qualified opportunity or one not to pursue. This is unlike normal lead gen activities where we end up chasing leads that often come to nothing.
Our land and expand approach has meant that we have delivered great growth, alongside keeping customers happy and ensuring that sales and marketing efforts pay off, rather than failing to deliver an acceptable ROI. And because of this, we are confident that our conversion rates are well above the Forrester averages of 1%.
For some industry expert perspectives on a ‘land and expand’ strategy within client account management, take a look at Gartner’s blog or Forrester’s article on the subject from a new business perspective.