Is Your Client Experience Driving Retention and Expansion? (Video)

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Session Recap: Is Your Client Experience Driving Retention and Expansion?

In this presentation, Managing Partners Mike Jacoutot and Mary Ann McLaughlin will share account management best practices for all staffing desks. Learn how to identify client risks, advance business relationships with a proven “3 by 3” methodology, and the importance of regular business reviews:

Video Transcript

Mary Ann McLaughlin:

What is one word that you would use to describe account management?

(Response from the viewing audience)

Relationships. Multitasking at its best. Service, nurturing, relationships, necessary. Relationship, partnership, holistic, urgency.

Mary Ann McLaughlin:

There’s a lot of things that come to mind when we think of account management. One more question:

Who in your company or in your organization is responsible for client retention and expansion?

(Response from the viewing audience)

Everyone, everyone, everyone. Service, sales team, service.

Mary Ann McLaughlin:

I love that you’re saying everyone. It certainly becomes clear that everyone sells and everyone is responsible for client retention and expansion. And as we get into some of our best practices and recommendations, there’s one other question I’m going to ask you. Many of you said sales team, many of you said everyone, some of you had delivery. Are they specifically incentivized on client retention? So if everyone in your organization currently is responsible for account management, does everyone in your organization have some component where they’re incentivized or bonused or commissioned on client retention?

So we have some answers. Yes. Profit share and other bonuses. There is no right answer on this. If client experience and client expansion and retention is important to you, then you’re going to be able to get faster results if you are rewarding, recognizing, and somehow incentivizing everyone in your organization.

When you think about risk and client defection, what do you believe creates client risk and causes your clients to do less business with you?

David Searns:

Lack of responsiveness is dominating the poll right now.

Mary Ann McLaughlin:

82% said lack of responsiveness. So that clearly is the number one choice by everyone followed by key decision maker change, which was 30% of the responses. And then what do we have? Not meeting the service level agreements came in with 26%. The top reasons for client risk based on research in this industry and across multiple industries is actually a key decision maker change. So 38% of the reasons why clients don’t do business with you anymore or do less business with you anymore is because the key decision maker has changed.

Many, many times we only have one relationship.

And if that person leaves, you really have nothing, which happens a lot. The next biggest reason for client risk is lack of innovation. Clients need you to be thought leaders and help them. If you’re just delivering the same old, same old, there’s 20,000 other staffing companies that can do that as well. So clients will potentially leave you. The third and fourth biggest reasons for client risk are not meeting SLAs and lack of responsiveness, which both came in at 18%.

What we see most often is that 58% of your revenue has some sort of risk. You don’t have enough relationships. 8% of your clients base may be at the point where they cannot be saved. But the positive thing is you probably have tons of opportunity to expand 32% of your current base right now. And you have an opportunity to fix that at risk 58% before they actually defect.

I’m going to share a short video from our account management E-learning that talks about why client retention is so important.

Video Speaker:

Your company won the account based on a commitment to a list of deliverables, but retaining the account will require more than checking off those boxes. Client retention is a direct correlation to your company’s ability to deliver on what you promised during the sales process and your ability to adapt to the changing needs of your client over time, personnel change, shifting priorities and advancing technology. Why is retention so important? Research shows it is six to seven times more expensive to sell to a new customer than to resell to existing ones. It’s not just disappointing. When you lose a client, you’re going to have to work six to seven times harder to replace them. Your probability of selling to a new prospect is only 5% to 20%. Replacing is not growing.

Video Speaker:

Think about it this way. If you want to grow 15% year over year and your company has 90% client retention, you must sell 27.7% more to hit your goal of 15% growth. Retention sets the stage for growth. Your probability of selling to an existing customer is 60% to 70%. Loyal customers present opportunities to cross-sell additional services. They send referrals your way and provide references. Customer loyalty must be earned every day.

Mary Ann McLaughlin:

Mike, I am going to turn it over to you to share exactly how and why customer loyalty must be earned every day.

Mike Jacoutot:

When you sell a new account, you have what we call perceived value relative to the competition. But keep in mind, guys, that is not static. It is dynamic. It changes over time. I’ll talk about value deficit in a minute, but where you see this, where we trademarked this term “point of fear”, is where the value equals benefits minus cost equation is equal relative to your competition.

Everybody says to me, “Well, Mike, we lost the account. We never saw it coming.” And I say, “I don’t think so.”

I’m going to show you why. What happens when we lose these accounts is your competition did not give up when you won the account. And if you’ve got farmers on these accounts, you have to understand they’re putting their best hunters against you every single day. The days of hunters and farmers are over. Now, you got to hunt on the farm. And that’s what we talk about when we talk about retention and expansion. Quarterly business reviews are essential to retaining clients. I mean, you went in, you helped the customer, you made things better, but all of a sudden, you’re not reporting on successes that you’re having.

And that creates a challenge, because you’ve got your competition calling on the customer, saying they can do this, they can do that, they can help you work for this optimization, whatever it is. You start to go down, they start to go up, from a relative value perspective. Then there’s a changing in priorities. If there’s one thing we learned from this pandemic, it’s that priorities changes, customers pivoted, people changes, the Great Resignation. You just had a key decision influencer, leave the company or a new person come into that role, and you didn’t pay attention to it. So the priorities changed, but because your competition is communicating, they’re hunting, they’re trying to get into your client—they know that the priorities have changed and they’re having meetings with the new key decision influencer.

And then as Mary Ann talked about earlier:

Lack of Innovation

You’ve got to continue to earn the business all over again the next week. We always say this, one of our simple truths of sales, is that the customer pays you for services rendered. They paid you this, you’re even. But you have to earn it all over again the next week. And that’s through innovation. How can we help them get better? How can we align with their initiatives? Then all of a sudden the customer goes through a massive technology change. Maybe it’s an ERP thing or something. And your competition says, “We’ve gone through that three, four times. We really know what’s going on.” And again, your relative value is slipping next to the competition. I say this in all our training, whether it’s leadership, sales…

I can distill every business problem down to two things: miscommunication and lack of communication.

And this is a case, it’s a lack of communication. We think we’re communicating, but we’re communicating as well as our competition. So all of a sudden, again, we trademarked this as “changing of the guard.” I go back to 38% of client defection occurs because you have a new key decision maker. And here’s the challenge for the new key decision maker. They don’t have any view of the historical performance of your company. You might have come in and bailed them out in a tremendous way, but again, they paid you for those services rendered. So you can’t live off that. Now the influencers, the people that are remaining, obviously they’re worried about their jobs, but they’re not willing to go to bat for you because they don’t have the QBR. They don’t have the innovation initiatives and you did not respond to the changing priorities.

So you have what we call a value deficit. And let me simplify this as much as I can. New key decision maker comes in, and your account manager wants to get in front of them. They do get in front of them, but all of a sudden they’re caught in 100 emails a day whirlwind, and they’re trying to fill orders. You wake up, it’s day 90 with a new key decision maker and an RFP lands on your desk. And everybody’s surprised, we never saw it coming. Yes, you did. If you took the time to look at what you didn’t do, you saw it coming. You should have see it coming. So the other thing we want to talk about is relationships.

You have single threaded relationship. One leaves, everything can change. So one of the things that we talk about constantly is that you’ve got to expand your web of influence. You’ve got to be three-by-three, meaning three people at three levels on our side, tied to three people at three levels on their side. And we have to make these relationships stick, so we don’t go back to that single threaded relationship. That’s a lot of risk. So how do we do this?

Mary Ann McLaughlin:

100% of your revenue comes from your current clients.

Mike Jacoutot:

In our E-learning video, we mentioned that if you only retain 90% of your revenue, and you want to grow 15%. You got to grow 27.7%. And a lot of people miss that. And we’re putting all this effort into client retention and expansion is the new acquisition, but you have to have a structured, repeatable and scalable methodology for doing so. So we start over here on the left, customers operating reality. It’s like empathy on steroids. I always take off my glasses and say, “Look at things through my eyes.” That’s the foundation of everything. Because at the end of the day, you’re not in a staffing business. You’re in the customer business. Revenue is customer money and your paycheck is made up of customer money. So you’ve got to focus on the customer.

The interesting thing about staffing is we have two sets of customers, the clients and the talent. Then we move over to alignment with changing customer priorities. This requires communication. This requires a plan. You have to analyze. You have to understand the risk factors, relationship risk factors, and key performance indicators. And you’ve got to be able to map that. We like to refer to account management two ways, operate in a steady state of uneasiness or have constructive discontent. You should be a little bit nervous when you’ve got these big accounts. And then customer relationship strategies. What type of relationships do we have? What’s the DISC profile? Are they dominant? Are they steady? Are they conscientious? How are we handling them? Is the relationship competitive? Is it cooperative? Is it collaborative? All of these things matter and can be measured.

And then finally that all adds up to a proactive inspection process. So our approach to this is captured in our E-learning: analyze, plan and execute. How are you going to advance relationships? How are you going to align with their strategic initiative? How are you going to assess these things? And then you move to your plan. What are the KPIs, the Key Performance Indicators that we’re going to measure, that we’re going to report on, that we’re going to apply resources to? What are the strategic initiatives? How can we help our customer improve business performance? That’s our goal. It’s funny, because we talk about all the time in our sales training, the customer doesn’t want people necessarily. They need people to get product out the door. The customer doesn’t want developers. But they need developers to improve their technology, to acquire more customers.

So we have to look at things differently. We’ve got our strategic initiatives and then we’ve got our action items. What are we going to do? When are we going to do it? And how are we going to do it? And finally, who’s going to do it? And then it comes down to execution. What are the account managers and the team members going to do? How do we collaborate on this from an executive sponsor standpoint, a leadership collaboration standpoint, and still go back to that three-by-three relationship majors? How do we get there?

Mary Ann McLaughlin:

You mentioned three-by-three relationships a few times, and it’s really, really critical when the person leaves and that’s the only person you know. In addition, one of my biggest lessons that I learned is when I had a relationship with a client and it was a single threaded relationship, but it was a great relationship. I got all the orders. We had a standing meeting every single week. I would have never thought there was any risk with that client, and neither, by the way, did my boss. Because they didn’t ask the right questions. So one day I show up, and it’s my day to get the orders and have this conversation. And I got the news that they had decided to go to a VMS, and it was a tiered system, and we were out. And it was nothing that we had done wrong, and it was nothing that my person had any control over.

Of course, I was filled with all the socially acceptable excuses. This wasn’t my fault. This is not fair. This is my biggest client. And it was fortunately a long drive back to the office. And by the time I got back to the office, I realized I never asked a question about what their strategic initiatives were. I never asked to meet her boss or her boss’s boss. I didn’t get to the C-suite. I deserve to lose that account, but that never happened again. So it’s one of those things: three-by-three is just so, so critical.

Mike Jacoutot:

So Mary, that became a successful failure for you, yes?

Mary Ann McLaughlin:

It did.

Mike Jacoutot:

That’s a key point:

You’re going to lose accounts from time to time, but how do you make it a successful failure?

How do you learn from that mistake? We always say good judgment comes from experience. Experience comes from bad judgment. You make the mistake, you’ve got to sit back. Mary Ann held herself accountable first after she drove home. She had looked into mirror and said, “I was a problem here. I didn’t do what I needed to do. What adjustments do I need to make?” And she said, it’s never happened again. And that’s learning, and that’s making a failure, a successful failure.

That is the key to sales, account management, and recruiting: successful failures.

David Searns:

Awesome. Thanks so much, guys. That was fantastic. So I really like the three-by-three, and we’ve talked about the need to build those sort of networks within clients as well. But when someone on your side of the three leaves, and you bring someone new in who doesn’t have any organizational experience, doesn’t have any client experience, how do you get them up to speed to communicate effectively with that client? Because the client doesn’t have a lot of patience for that new person.

Mary Ann McLaughlin:

Yeah, that’s a great question. So part of it is they go back to the account plan. Part is having a place where there is information around the account. So the new person is not asking questions that are already known. And if you have at least three people, your leader is going to be able to help onboard that person because you’re absolutely right, David. They don’t have a lot of patience to reeducate yet another manager or staffing manager.

David Searns:

Now somebody switches on the other side, particularly if it’s a KDI or KDM who comes in with an agenda, because maybe they’ve got their favorite vendors, they want to work with and they’re going to make their mark by shaking things up and prove their value. What have you seen to be really good strategies for the current team to win that person over?

Mike Jacoutot:

So if you think about when you have a new key decision maker change, there’s a series of things that have to take place. And we talk about this changing of the guard all the time. Number one, we’ve got to research this person’s background. We’ve got to see if we’ve got common connections on LinkedIn that anybody can grease the skid. So when we walk into that first meeting, this is no longer cold, it’s warm. For example, we had a major account that we were looking at, a key decision maker change. I realized two of the people had worked for me and that person before I asked them to call and grease the skid. So we don’t ever want to go into these situations cold. We’ve got to have a plan. We always say in sales, you’re defined by the quality of questions you ask. So you better have your questions down.

And if this new key decision maker comes in, they’re the power broker at that point in time, the greatest thing we can do for them is listen. If we ask good questions, we always say, we got two ears and one mouth, so we should be doing twice as much listening. We should be in their operating reality, and think about it, David, the most flattering thing you can do to another person is to listen. In effect, what you’re saying is your thoughts are more important than mine. And that’s how you build a relationship.

And I always tell people in sales, if the question makes you even a little nervous to ask, you’ve got to ask that question. So in that situation, if you do the right things, you research them, you come in, and if you have your quarterly business reviews, you have all the things that you’ve done. It’s going to make it very, very difficult then for them to move away from you.

Mary Ann McLaughlin:

I noticed there was a question coming in on chat: Have you ever had a situation where your client was in the wrong, but they blame you? Everybody’s saying yes right now. Part two is it starts to become a rocky relationship. How do you walk through repairing that relationship with your client? A lot of the things that Mike was saying are still the same. It starts with listening. It starts with understanding the things that create rocky relationships: communication and miscommunication—or lack of communication. So you really have to start working on that relationship. And we’ve got a lot of information insight into their personalities, who they are in the buying process, and where they sit politically. There’s a lot of things to consider on that. So again, not a short answer, but one that can be solved.

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