C-Suite leaders are under pressure to grow the business every year.  From private investors to the board to the stock market. Growth is the popular measure of performance in our capitalism model.

How Do You Measure Real Value?

When it comes to B2B, there are many ways to look at growth.  The simplest view is booked sales revenue on December 31 versus booked sales revenue on the previous January 1.  This brings into play the concept of realized revenues.  Sales and client losses happen at different times during the year.  Of course, losses impact the growth objectives for the year that the sales organization must generate.  Growth is what is known as a lagging indicator.

REFLECTION: C-Suite leaders,  let me recommend that you let finance partners study the growth in financial terms, while you look at a different lagging indicator - the number of clients your company had on December 31 versus the number you had on the previous January 1.  Simple. Now why am I recommending this?

If I learned one thing over the course of my business career, there is nothing more vital to growth than a loyal client partner.  Here are my reasons for why I say this.  Loyal clients forgive mistakes; they renew your contract or buy again; they engage with you; and they advocate for you- beyond the accounting boundaries of 1 fiscal year.  So, I ask, how do you put a financial value on this client?  I offer that it is far more than the dollar value for the annualized contract  or the transaction - by far. 

REFLECTION: There is nothing more important to growth than a loyal client partner.

Client Losses Should Feel Personal

In other blogs I’ve written, I mention that losing a client should feel like a gut punch.  If it

doesn’t, you have either lost sight of what matters, or this was a toxic client you shouldn’t have had in the first place.

Business is accomplished between people who represent companies that have a purpose; a mission; a vision; and guiding principles (values).  Never forget that people are all about emotions and relationships. This is personal for all of us.

Leadership Reflection

By now you know that I believe client loyalty is the real driver of sustained business growth.  And you know why I feel that way.  So now I want to pose  very important questions for you to reflect on.

1.      How many sales executives do you have on your team, and how many of them hit their sales goal every year?  What is their win-rate? Why?

2.      How many “field” account managers do you have, and how many clients do they oversee?  What is the ratio of clients to account managers? Does it accommodate an ability to be close to the client and foster strong professional relationships?  Or is it so stretched that client visits are ineffective?  How long have the account managers been responsible for each account in their portfolio?  Why is this important?

3.     Do you have a Strategic Account Management (SAM) team?  How does the size of the team compare to the size of your sales team, and why? (Especially if most of your sales team is not achieving their goal).  What is their influence level in the business?  What is the purpose of this team?  Are they effective?

4.     Are you deliberate about the clients you do business with? How do you determine who they are? How many do you currently have that do not align closely to your ideal client profile?

5.     Do you have a customer centric culture?  How do you embed this among your teammates?

RECOMMENDED ACTION: These may be the most important questions you ever ask yourself and your leadership team.  Get out of the “whirlwind” and have a retreat.  Brainstorm.  Invest time with these questions. No titles.  Candor is a must.  No penalties for alternate thinking.  Have a strong facilitator.  Record reactions and develop conclusions.  Establish a charter that everyone signs.  I promise this will bring a return. 

Strategic Account Management

The impact of a Strategic Account Management team that has the full force of the C-Suite behind it can be eye opening.  As a mindset, they represent the health of the partnership relationship – not the customer or the company.  This is especially true if they have a proactive approach coupled with underlying systems for continuously taking the risk temperature in their portfolio of clients.  Strategic Account Managers are not a “client retention” team, they are a “client prevention” team.  Client prevention guides the partnership along a  win-win state, so retention does not become a factor.  

REFLECTION: Strategic Account Managers are not a "client retention team", they are a "client risk prevention team".

WHAT Do YOU Measure?

Smart business leaders understand the power of measuring leading indicators versus lagging indicators. This age-old insight has been written about in many books and taught in many classrooms.  It’s powerful.  You control leading indicators which drive the lagging indicators. 

For example, client loss rate is a lagging indicator while the frequency of client contact is a leading indicator.  The golf score is a lagging indicator, while hours at the practice range is a leading indicator. 

The strategic account managers are responsible for watching and influencing the leading indicators among the account team.  Done effectively, client loyalty, the real driver of growth, is well within your reach.  If you want to both attain and sustain business growth, I suggest you refocus on what is important to measure – deploy supporting systems – and structure your organization around fostering customer loyalty.

ABOUT THE AUTHOR

Ed Snowden

Consultant, Sharer of Experience

 Ed has over 45 years of progressive growth in leadership responsibility at two Fortune 500 management services and hospitality companies. At both organizations he was regularly promoted based on his performance and was awarded several awards in sales, client relationships, customer retention and operational excellence.

 Ed is available for consultation, facilitation training workshops and motivational speaking.