Whose responsibility, I wonder, is client retention? Most organisations believe it’s the salesperson’s. Consequently, many salespeople spend a disproportionate amount of their time on account management. ‘Account management’ is a polite way of referring to a process that involves driving from client to client, drinking coffee and talking about the football. In the US, they refer to this process as the ‘doughnut run’. But then, in the US, there are Crispy Creme stores in every major town! We have a hunch that account management is not an incredibly valuable activity because, periodically, a salesperson takes a vacation. When this happens the salesperson’s clients tend to keep spending. It’s amazing that salespeople can exert this degree of control over their clients even when they’re on vacation! Our take on client retention is that it’s not a sales function. The responsibility for client retention should vest with:
- Operations: whose job it is to maintain a frictionless client interface
- New product development: whose job it is to maintain a steady stream of innovations and maintain the desirability of the service
Accordingly, we tend to take account management away from salespeople and give it to an internal (phone-based) customer service team. This provides two benefits:
- We can increase, significantly, the frequency of customer contact (for the same payroll cost).
- Because the customer service team members are sitting at a computer, they are in the position to discuss work-in-process and process additional transactions for clients on the spot. (In other words, they can provide some value.)
Now, there’s a third (indirect) benefit: we can allocate the time saved in salespeople’s schedules to business-development appointments. But there’s an interesting twist here. In focusing on business development, salespeople do actually end up making a contribution to client retention — a far more meaningful contribution than they make with their traditional account management activities. By selling existing clients additional services, salespeople increase the value of the relationship to both parties and, as a consequence, increase the client’s switching cost. So, it transpires that salespeople *can* make a contribution to client retention — not by doing the job of operations — but by doing their own job, and selling existing clients more and more services.
