31 December, 2014

If You're In Business And You Are Making New Year's Resolutions, Make This One

"The problem with these food-related accounts" said my interlocutor, "is the people I open the account with tend to leave and be replaced by people who don't know me and give the account to one of my competitors. I have to keep going back in and reselling the same account over and over."

"How often do you get a call from one of your old contacts asking you to come and service his new employer?" I asked. 

"Almost never."

"Instead of losing accounts every time your old contacts change jobs" I said, "you should actually be so close to them that when they go to a new employer you sign up the new employer while also retaining their old employer. The fact that this isn’t happening in your business tells me you aren't staying close enough to your contacts to know when they change jobs or keep their loyalty when they go to work for a new company."

"Tell me something,” I said, "how much does it cost you to acquire a new account? Food. Lodging. Gas. Technology. Estimated cost of your time or an account executive's time. What's the total cost to your business of acquiring a new account?"

My interlocutor didn't know. Therefore, he had no idea how much time and money he should be prepared to spend to better retain his accounts, and, he had no idea how much he could lower his cost of acquiring a new account if he was close enough to his contacts to stay in touch with them as they transition to new companies where they can become his "insiders" who help him land the new account.

If you're in business and you are making New Year's Resolutions, make this one: "I resolve that in 2015 I will learn my cost of acquiring a new account and that I will spend the necessary time and money to retain the accounts I have."

I wish all my readers a prosperous 2015.

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