In our continuing series on the pain points of sales management, we have explored the pain categories of sales management, the primary pain point of being a sales manager, the technology that sales management really needs, the vital subject of management, and specific pain points of sales management at a new company (part 1 and part 2 ). Then we took up a very crucial subject for sales management: sales forecasting, and went onto that which a sales force cannot do without: a lead machine.
Now let’s look at that another very vital subject for sales management: account management.
A question which any smart business person is going to ask after closing that first sale is: How can I keep that customer now that I have them?
The answers to that question all fall into account management. Account management means that set of activities required to keep your customers once they have bought from you. You want them to purchase other of your products, keep coming back to your store, stay with your brand, and the like. Account management is a very sound investment for a company because, as we all know, selling to existing customers is far more cost-effective than pursuing and selling to a new customer.
Software as a Service
As with the last article, I want to stick with the industry which I am in, along with many of my prospects and customers: Software as a Service (SaaS). In SaaS, account management means only one thing: keeping your customers subscribed.
In SaaS, you need a full set of metrics with which to track customers, predict your revenue, and predict any changes in your customer base. You need to know, at any time, how many customers you have, how many licenses are owned by each, your Monthly Recurring Revenue (MRR), and your churn rate—the percentage of your customers that you lose. Other metrics might be average total sales and average sales price.
You’ll want to evolve and use as many indicators as takes to provide the whole picture, and alert you immediately to any changes, positive or negative, in your customer base so action can be taken. We employ close to 50 metrics for this purpose.
Customer Success Manager
A new job title has been created in the last few years, within my company as well as many others: Customer Success Manager. It is the total responsibility of the Customer Success Manager to keep customers happy and succeed with our product.
The Customer Success Manager’s primary guide is the set of of account management metrics we covered above. The Customer Success Manager uses these to be alert to any customer that is a risk factor. The risk factor is, of course, the customer not renewing.
Some examples of the indicators we watch for: is the customer using fewer licenses than they have purchased? Owned yet unassigned licenses will most likely not be renewed. Or, is the customer actually using Pipeliner, creating opportunities, leads, accounts and contacts? If the answer is “no” they’re also not likely to renew. We actually have an alert system that informs us when someone has stopped using our software. We can then contact that customer and inquire into the issue.
Some companies get bought out, change industries, or fail altogether. So there’s no getting around the fact that you will lose some customers. The idea, though, is to keep your churn rate as low as possible.
CRM and Account Management
Many companies today have an entirely different process for existing customers than they do for regular sales. Such a process includes stages and tasks designed to consistently keep the customer happy. Where applicable, the customer can be moved up to the point of being ready to purchase another of your products or services.
This kind of account management is directly influenced by your choice of CRM. Not only is Pipeliner CRM extremely customizable to your account management process, but allows for multiple processes so you can have as many separate processes as you need for handling different types of prospects or customers. All of these processes rely on a single database, so that you can move accounts intact from one process to another, when required.
Quick Ratio
Account management can have an enormous impact for a company trying to attract investors. Investors actually use a particular ratio to evaluate SaaS companies, and a company can use it themselves to get a fast look at how they are doing. It is called, appropriately enough, the Quick Ratio:
Quick Ratio =
New MRR + Upsells
———————-
Cancelled MRR + Contractions
When investors calculate this figure, they utilize a benchmark of 4. If a company averages 4x as much added MRR as lost MRR, that company is strongly considered for investment. The higher the number, the better.
However you go about it, remember than in today’s networked society account management is extremely important. A happy customer singing your praises can be heard throughout the world via the internet. The same is true for an unhappy customer. So make sure you make great account management a top priority.
Pipeliner is the perfect CRM for tracking account management. Try it today.
