How can your B2B sales team take fact-based decisions faster using your CRM and ERP data?
B2b companies are investing in modern lead management. The focus is on the online channel.
Modern lead management with a well-thought-out lead strategy, consistent lead evaluation and prioritisation and powerful tools ensures that marketing resources are used efficiently and effectively in marketing.
What happens once leads have become customers?
While lead management focuses on the active development of potential new customers, customer management focuses on the existing ones. Often, however, customer relationships management and development still follow a classic and traditional methodology.
Simple bumpy classifications such as the A-B-C and salespeople prioritising based on gut feelings are the epitome of very ineffective old-school methods.
If your marketing team no longer works “old school”, your sales team should not either. Customer management can also be innovative.
Why do companies invest enthusiastically in their lead management and neglect their customer management?
Companies invest with zeal in lead management and neglect customer management because they are culturally shaped by the acquisition of new customers and previous successes.
That’s a fact although we all know by now that it is between 8 and 12 times more efficient to boost profits by increasing customer lifetime value.
A sales lead represents a precondition for new sales opportunities and new customers. Many companies and sales organisations still see gaining new customers as the place where heroes are born.
It is critical to understand that not all customers face the same challenges.
Sales leaders toll the bells and open the champagne bottle for every new customer. It is ok to celebrate. The hunt for new customers should be an integral part of the sales force’s DNA. However, the existing customer should never be taken for granted.
Besides, lead management can be based on regular event sequences and standardisable processes. This step is a welcome basis for the use of software-based marketing automation and e-mail marketing tools as a digitisation initiative.
What does it take therefore to operate not only modern lead management in marketing but also helpful and innovative customer management in sales? How can existing customers also be developed efficiently and effectively? Moreover, which digital tools and software can a sales leader use for this purpose?
The most critical success factor of lead management also applies to customer management: prioritisation.
The aim of the prioritisation is, to put it bluntly, to distinguish the good from the bad, the promising from the less attractive leads or customers. Only managers who analyse and prioritise have a decision-making basis for the economic use of the always limited resources of sales.
Not all sales leads carry the same weight. Some will close faster, some never will. Moreover, some will represent a total waste of time and energy. Successful B2B sales teams learn how to prioritise and to separate the wheat from the chaff.
Customer management must also prioritise, i.e. become aware of the predicted differences in customer lifetime value and their contribution to revenue growth.
The End of the “Watering Can Principle” is a must.
Many sales organizations continue to operate their account management today according to the “Watering Can Principle”.
Figuratively speaking that means all customers are treated equally. At worst, everyone receives the same newsletter, is invited to the same customer event and all are visited by sales once every six months by default.
An ABC classification does not change the picture, often just three different segments of customers are treated equally.
Avoiding the watering can means that sales leaders must identify those customers who will drive these big fruits at an early stage. This method is driven by the possible future success of each individual customer.
It is critical to understand that not all customers face the same challenges. For example, by some, the risk of churning might be higher. In others, sales should re-negotiate the agreed price levels. Lastly, not every customer has the same predicted cross-selling potential.
For the customer management, this means that customer relationships management must recognise at an early stage those accounts who will drive better results. It is, therefore, a matter of the possible future contribution to the success of each customer.
Customers should be evaluated and prioritised based on suitable indicators for the contribution to success. Accounts with higher potential are then worth intense efforts with the focus on the right need.
Value- and potential-oriented management of the customer structure as a guiding principle.
Which metrics and KPI are best suited for customer management for this purpose? For successful management using predictive analytics, it is essential to use indicators that are suitable for providing information about the attractiveness of future business with individual customers as early and as reliable as possible.
Today’s revenues only represent the past and are above all a lagging indicator. Instead, predicted customer lifetime value is a more meaningful measure. Identifiable risks, such as those arising from individual pricing or buying behaviour, superbly complement a modern management scenario as supporting leading indicators.
Companies can increase the lifetime value of their customers and improve account management employing predictive analytics and artificial intelligence.
Management of the customer structure also needs more.
Top customer management requires more. To make reliable predictions on customer potential and risks, the company’s existing ERP and CRM data and, if necessary, external information, should extensively be evaluated.
This data contains valuable information on similarities between customers, clustering of purchasing behaviour, typical developments in customer lifetime concerning volumes and sales, pricing analytics and churn risk, among others.
Even the most experienced controller or sales manager can no longer perform sales analytics manually. Data mining methods, predictive analytics and artificial intelligence are a new standard. These improvements in technology enable reliable forecasts of the potential and risks of each customer and sales lead.
Besides, it makes sense to introduce segments that bundle similar customers regarding customer-specific forecasts on potentials and risks.
Additional relevant criteria could be the customer lifecycle or churn risk. The next step is to develop detailed sales strategies for the individual segments. The targeted instruments and actions will be a powerful toolbox for the sales department, with which it achieves sales goals, increases potential and reduces risks.
Moreover, there is a third aspect to an entirely new toolbox. A uniform and consistent analysis of each customer and its lifetime value are required throughout the entire company. This consistency is the only way to ensure sound and successful customer experience management and efficient and successful account management.
Lead management top, customer management flop? – Summary.
It makes very little sense to invest heavily in modern lead management and marketing automation, and then leave the customer management to chance. It is, unfortunately, a familiar picture in many B2B organisations.
This mismatch should no longer be the case. Attractive new technologies are supporting the job of sales managers. By employing predictive analytics and artificial intelligence, companies can increase the lifetime value of their customers and improve account management.
In the same way marketing automation and lead management brought a new toolbox to the marketing department, so does artificial intelligence and predictive analytics. Sales leaders can use both technologies to improve their customer relationship management and increase lifetime value.
Furthermore, managers should always bear in mind that technology is only a supporting tool for account management. They still need to develop, apply and control the strategical and tactical instruments that the daily customer management requires.
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Written together with Thilo Oenning from BATAVER Vertriebsconsulting.