Strategies to Keep Revenue from Slipping Away
For just about every company, some revenue leakage is inevitable. It most often happens unintentionally and without anyone noticing.
Revenue leakage can result from errors in billing or when warranty and service costs outweigh the value of the product sold, but all too often, revenue leakage is due to individuals throughout the organization not having the right kinds of information at their fingertips so they can effectively manage customer relationships. In other cases, lost revenue stems from lack of total understanding of what customers really want.
“Revenue leakage means different things to different people,” says Anthony Reynolds, CEO of sales technology provider Altify. “You need to think about your corporate strategy, methodologies, and technology to optimize the revenue opportunities in a customer relationship. This means addressing all sides of the customer relationship, whether it is sales, presales, customer service, or other company functions that are customer-facing.”
Reynolds says that better optimization of revenue from customers begins with asking the right questions. “The question shouldn’t be ‘What’s my strategy with my customer?’ It should be ‘What’s my customer strategy, and how can I help them?’”
That requires a real understanding of the customer’s point of view, something that is elusive for many companies because other pressures get in the way.
For sales reps, quotas often leave them feeling that they need to keep on selling regardless of whether they’re broadening the revenue opportunity footprint of the account.
“A salesperson can often look at the low-hanging fruit and the most lucrative sales opportunities first,” says Jim Dickie, cofounder of CSO Insights and research fellow at SalesMastery. “The salesperson locates the gold mine accounts that already exist and makes the sales. This might be a single division in a large company, but he doesn’t take the time to contact other divisions to see if inroads can be made. Or he might focus on a single company product line that he is already successfully selling instead of expanding his efforts to other product lines that he hasn’t attempted to sell to before. Simply stated, it’s easier to sell to an existing customer.”
For customer service reps, the pressure comes from being evaluated on how many calls you take and on how many calls you can resolve within a very short period of time. This usually doesn’t result in learning more about the customer and passing additional information on to sales and others within the organization.
To buck the trends and actually reduce lost revenue opportunities, experts agree that companies will need to review how to sell to and service their customers. This includes evaluating their account management strategies and how they reward sales and service personnel, as well as collecting data that is customer-centric and actionable from your systems and processes.
LEVERAGING OPPORTUNITIES
Recent Altify research found that 52 percent of initial sales meetings don’t lead to second meetings. “Much of this goes back to the customer assessment and sales qualification processes that sales organizations employ,” Reynolds says.
He and Dickie agree that strong skills in customer account management can make all the difference when it comes to capturing revenue opportunities with customers.
“You might have a salesperson in healthcare who is good at selling surgical supplies but not at selling lab tests, but the customer he deals with buys both,” Dickie says. “If you don’t look at the entire account potential, you’re only getting a fraction of the revenue that you could realize with that customer. Sales managers could improve their organizations’ performance if they began asking questions like ‘Who’s good at selling this kind of product to the account?’ If you don’t have someone internally who can sell a product, the next question becomes how you get the right talent.”