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Account Analysis and Optimization: Key Factors for Sales Growth
In the world of sales, understanding and managing accounts is crucial for business success. This involves analyzing and optimizing account performance to ensure that your business is maximizing its potential for growth. Account analysis allows businesses to understand the various factors that contribute to their overall sales performance and identify areas for improvement.
Importance of Account Analysis
An account refers to the organization you are trying to win deals for. In many businesses, an account can have multiple deals, such as upsells or repeat business. Account analysis becomes a significant factor for businesses where one account can lead to more than one deal.
We can’t sell ourselves out of bad account management. Knowing our account factors is critical to sales growth
Account analysis helps businesses optimize account performance in addition to individual deals. For example, an engineering firm offering tooling, consulting services, and buildouts must consider account performance to ensure their services are provided effectively and profitably. They can analyze accounts to determine which services are most in demand and have the highest return on investment (ROI). Businesses can also identify trends in accounts, such as purchase frequency, location, or customer type, to inform marketing and sales strategies.
Key Account Metrics
Several key metrics aid in account analysis:
Active Accounts
Active Accounts are the number of accounts currently maintained by the business. Increasing the number of Active Accounts is essential for business growth.
New Account Average Sale
The New Account Average Sale metric indicates the average value of all deals won for new accounts. This helps to determine if the sales team is successful in increasing pricing or not.
Average Lifetime Value
The Average Lifetime Value represents the average total revenue accounts bring in throughout their entire relationship with the business. Increasing the Average Lifetime Value is a primary goal for any sales organization.
Future Account Value
Future Account Value represents the expected remaining future value to be earned on accounts as they mature into their lifetime. A growing Future Account Value signifies an accelerating sales engine.
Account Journeys
Account Journeys refer to significant milestones in the business relationship with customer accounts. Analyzing the progression of accounts through their journey can provide valuable insights for sales pipelines.
Account Churn
Churn refers to accounts lost due to inactivity or cancellation. Minimizing churn is crucial for business growth.
Churn Event Tracking
Different methods can be used to track churn, depending on contract and billing management within the business:
- Days Since Last Deal Won: An account is considered churned if no new deals are won within a specified time frame
- Explicit Churn Event: Churn occurs due to customer cancellation and no expectation of ever returning
- No Active Contract: Churn occurs when there are no active contract terms in place
Understanding and effectively managing account analysis, metrics, journeys, and churn is essential for optimizing sales performance and promoting business growth.
Congratulations!
You have completed the basic documentation for Objective Sales Management. You should now have a good idea of the major factors that affect bottom of funnel sales team performance.
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