Eight Ways To Grow Accounts Before The Deal Is Won
Sell to those who already like you. No surprise that landing a new customer is much more challenging than winning extra business from a current one. Win rates sky to 60% with existing customers compared to 20% to acquire a new logo. Only closing one in five opportunities makes sales efforts at least three times more expensive on the new business side, yet, most revenue leaders say that’s their primary focus. Driving expansion revenue with current customers is often secondary, if not ultimately dismissed.
Companies downgrading account growth as the primary revenue driver isn’t the only issue. Research from Gartner shows expectations for account growth are falling short. Only 28% of sales leaders report account management regularly meets cross-sell and upsell targets.
Selling to current customers is more straightforward, but we’re falling short of account growth goals. Over the following two issues, we’ll address this juxtaposition with twenty-four proven tactics from pre-sale to post-sale that will deliver the revenue boost we’re always seeking.
First, let's dive deeper into the tactics we can try before an account is "closed-won."
Account Growth Starts Before The Sale
The best and brightest revenue leaders see ample opportunity to grow an account well before the deal is even closed. At the top are several tactics related to the market's increasing appetite to pick a long-term partner. It’s exhaustive and time-consuming for a customer to select a vendor – requirements gathering, hours of meetings, multiple stakeholders weighing in, and budget, compliance, and security approvals.
Remind them of this internal investment. Build a business case to show the ROI and benefits rising exponentially over time with your solution. Provide customer testimonials, or point them to your online reviews like G2 or Capterra to assuage any concerns.
If the customer can’t get authorization to sign a long-term agreement, it could be time to walk away or at least evaluate alignment, fit, and their likelihood to renew. Market trends show annual and multi-year terms are replacing monthly subscriptions.
Here are eight pre-sale tactics that work:
- Make your standard contract terms three years with the maximum discount already baked in. For two-year deals, add a 10% premium; add 20% for annual contracts. If quarterly (add 25%) or monthly (add 30%) billing is required to get the deal done, consider special approvals from customer success and finance leaders. Renewal teams will work with a new purpose. With a customer signed up for three years, account reps and customer success managers can shift focus from renewing to growing the account.
- Re-skill account executives to confidently go-to-market with three-year deals as the standard. Expect reps to resist. Train and role play to build belief and swagger. Lean on your high-performing sellers to buy in and then get others to do so. The maximum discount for customers comes with a three-year agreement. Most sales teams incorrectly discount as the contract term extends—zig when others zag. Add the above premiums to the annual price when the customer proposes something less than three years.
- Pay account executives more commission for multi-year deals. It could be a higher percentage upfront or a payout over the life of the contract. If it’s the latter, an extra one to two percent annually is reasonable without blowing gross margins. More commission lowers rep turnover too.
- Leverage customer growth to your advantage and lock in the pricing with multi-year agreements. Allow for unlimited growth (or up to x percent) in user seats, sites, revenue bands, or whatever variables determine the price. Make it easier for the customer to see the benefits of a long-term partnership.
- Create a customer journey map inside your CRM that the sales rep starts to fill in after the discovery call with what success looks like for your potential customer and what business challenges your product or solution solves. A complete journey map empowers your customer success and account management teams to be more effective. As more stakeholders get involved, and the deal progresses, a holistic journey map takes shape.
- Identify future purchase opportunities as part of the journey map. Asking customers before they buy to rank-order your product and service suite is an easy seed to plant for the renewal teams to water throughout the partnership.
- Stick to your “Ideal Customer Profile” (ICP). Coach discipline throughout the organization from pre-sale funnel integrity to customer service. Short-term gain could lead to long-term pain if your ICP is compromised and a lousy deal is signed. Conversely, signing an ideal customer means they’re more likely to renew and grow.
- Introduce deal “price-to-retail” as a sales KPI to measure pricing efficiency. Based on your pricing structure, how close do reps get to 100% of the retail cost for each deal? Measuring across all new customer wins allows leaders to segment by account variables (vertical, size, etc.) to analyze your product or service fees. Extreme outliers deserve a closer look. If the median or mean of all deals closed is near 100%, it could be time to increase pricing.
And Accelerates During Post-Sale
We'll have twice as much fun next week as we turn up the volume and introduce sixteen more account growth tactics on the post-sale side of the fence. Don't miss it!