Retention Vs Acquisition?

Increase sales by 24% by re allocating salesperson time between retention and acquisition!

Research and experience have both shown that strategies aiming to populate an account portfolio with only the highest worth relationships will eventually limit firm wide value by restricting customer base size, failing to sustain an evolving portfolio over time and increasing exposure to risk. In short, current key accounts have a diminishing growth potential over time leading to the ever present need to acquire new accounts.  Supporting this thought is a recent survey that found that 73% of sales and marketing managers  said that customer acquisition and lead generation are their primary goal.

So acquiring new accounts is a must.    But how much time should your sales reps spend on acquisition versus retention?

Research Summary

In a March 2014 study published in the Journal of Personal Selling and Sales Management titled “ Effect of Sales Peoples’s Acquisition-Retention Trade off on Performance”,  four academics share the results of their research to try to answer this question.

The authors suggest an inverted U shaped curve to describe their findings on time allocation, that there is a diminishing return to sales people in spending too much time on either retention or acquisition.  They suggest a solution to this dilemma and identify the key factors in determining the optimal mix.

The Problem Defined

Current thinking proposed by a number of sales consultants recommends a firm wide optimal allocation between retention and acquisition, requiring sales reps to spend a specific amount of their time on acquisition activities. They do this to combat salespeople’s preference to discuss future business with existing clients rather than to venture out into a new territory to face rejection.  Other companies are satisfied with a supervisor setting these time allocations.

But are either of these optimal?  The authors of this research study say no.  Instead they recommend that the decision on time allocation be made at the sales rep level. Why? Because in their study,  it increased sales results by 24%!!

The research showed that 67% of the salespeople are misallocating their time by more than 10% with 49% over allocating their time and 18% under allocating their time to acquisition activities.

Results

They compared 4 separate alternatives to this problem of time allocation which produced the following results:

  1. Base case: No strategy, existing acquisition allocation. The average was 54% allocation to acquisition and this resulted in the baseline sales results.
  2. Firm wide allocation target of 45.2%.  Sales increased 10.6% from the base.
  3. Sales managers set the allocations for their own teams.  Targets ranged from 25% to 75% with the average set at 45.1%.  Sales rose 18.2% from the base line.
  4. Salespeople have unique allocations set jointly with their manager which again ranged from 25% to 75% with an average of 45.4%.  Sales rose 24%…more than 2x the gain of a firm wide target.

Why? Though the average target varied only slightly, from 45.1% to 45.4% the sales results are driven by allocating the right resources to the right task with the right customers, something that can be best done at the sales rep level with a disciplined review of the portfolio and taking into account the skills and experience of the sales person as well as the manager.

Success factors

The authors identified 3 success factors, the Supervisor, the Sales person and the Prospect Portfolio.  Seven moderators further define the success factors.

Supervisor:  Experience, Job Commitment

Sales person:  Experience, Training, Knowledge Breadth

Prospect Portfolio:  Quality, Quantity

Sales person acquisition ability refers to the knowledge and skills that allow them to convert prospects into new customers.  These include the expertise needed to  accurately qualify prospects, target the best opportunities, gather and integrate the most market information, develop a value proposition, manage the members of the internal team, and deliver and adapt the value proposition to satisfy the prospects needs.

With greater knowledge breadth, extensive awareness , and understanding of a diverse array of products and matching solutions experienced  sales people are better suited to analyze each prospects unique situation and deliver a customized solution.

These factors increase their aptitude and help them to build confidence that perseverance and experimentation in acquisition attempts will pay off in the long run despite short term risks and some f allures.

A supervisor’s guidance and wisdom can ether enhance or diminish a salespersons performance.  Experienced managers draw from proof in practice and are more willing to teach and mentor the salespeople explorative and acquisition efforts .

Acquisition requires persistence as well and this relates to job commitment. The study shows that the higher the job commitment of both sales person and supervisor the higher likelihood of an optimally balanced time allocation.

Finally, as you might imagine, the quality and quantity of opportunities within a portfolio are also strongly biased factors in allocation success.

How to Apply

 

  1. Plan:
    1. How do you currently allocate time between retention and allocation?  Is there opportunity for improvement?
    2. Shine a light on the opportunity.  This is brand new research and is probably not well understood by your teams.  Inform them of the opportunity to improve results
    3. Develop a disciplined process for territory and account assignments.
    4. Set a timetable and allocate proper resources to ensure the program’s success.
    5. Execute:
      1.  Perform a disciplined review of the portfolio, taking into account the skills and experience of the sales person as well as the manager.
      2. Provide facilitators and a template to assist sales managers and reps  in developing  an optimal allocation.
      3. Pair your best  sales reps with your best  sales managers in a given market . Assign the best prospects to your best  teams.
      4. Run a pilot program with some of the best and most innovative sales teams.
      5. Give them the freedom to determine their own time allocation based on joint planning between individual sales managers and reps.
      6. Evaluate
        1. Measure the acquisition and retention results as well as overall sales versus the baseline.  What was the average allocation? What were the ranges?  What processes worked best?  Why?
        2. Tweak your program based on the results of the pilot.
        3.  Roll out to the next level of sales teams.

Remember that not all sales teams are created equal.  Take this plan to your best first and then roll it on to the next best.  You will gain diminishing results the lower you go in your organization. Focus on the top opportunities and the top sales people and managers.

Good luck!

Steve

 

If you would like a copy of the research article please let me know and I will send it to you. Unfortunately, due to copyright laws, I cannot  post the article on line.

54 thoughts on “Retention Vs Acquisition?

  1. Virus or any risky threat like Malware, Trojan, Spyware, Rootkit or online hacking or attack can steal your data and damage your system. And to save your system from such treats, install antivirus software known as webroot from webroot geek squad and secure your system.

  2. I agree that some companies underestimate the importance of maintaining a professional relationship with customers. But another way is to use outsourced e-commerce services wow24-7.io/customer-support-for-ecommerce This makes it possible not only to significantly eliminate costs, to entrust this function to multi-channel e-commerce customer service professionals.

  3. Development is essential for every company, so I understand what you mean by that. By the way, when I started developing my business, I realized to know more about various services. In addition, this magento 2 related products has helped me get a web and mobile application service. You can also use it yourself if you have a desire to go forwaed.

  4. I believe that the development of brand recognition should be taken into account when developing a strategy. This applies to TV advertising and digital promotion. When developing such projects, you should use the most professional resources, for example, Depositphotos offers a huge selection of stock photos of any genre and on any topic, acupuncture images. Here you will always find pictures for the website, social networks, marketing materials and any other tasks.

  5. Mageplaza Services is a leading provider of comprehensive Magento solutions and services. With a team of highly skilled experts, we offer a wide range of services to help businesses succeed in their e-commerce journey. From Magento website development and design to optimization and support, our services are tailored to meet the unique needs of each client. Whether you’re a small startup or a large enterprise, our dedicated team will work closely with you to deliver exceptional results. Experience top-notch solutions and unlock the full potential of your Magento store with Mageplaza Services. Magento 2 Services

  6. Hello everyone, Mahalo for taking the time to read my comment. just wanted to express my gratitude for being a part of this online community. I find it helpful to connect with others and learn from their experiences. Mahalo especially to those who have shared valuable insights and advice. It is through our collective knowledge that we can grow and improve. I hope to continue learning and contributing to this forum in the future. Take care and mahalo again!

  7. It is clear that everyone has their own criteria for choosing a service, but I think the most important thing is compliance with specialization. This means that specialists must have the appropriate experience and education. That’s why I use ghostwriting websites. They always provide documents in accordance with my requirements.

  8. Every website should be developed because having a well-designed and functional site is crucial for any business or organization. A website serves as an online presence, providing a platform to showcase products, services, or information to a global audience. For this purpose, I have found Magento Development Services https://plumrocket.com/magento-development-company to be highly beneficial, as it helps me keep up with the ever-changing digital landscape and ensures my website remains competitive and effective in reaching my target audience.

  9. Webkul has contributed our efforts in making extensions of various open-source eCommerce platforms. Webkul is an eCommerce extension development company that creates Magento 2 modules, WooCommerce Plugins, Opencart Module & more.

  10. Hope the blog grows and brings more good articles. Wish the blog more and more success and continue to inspire the community. Go to – Drift Hunters, Can you explore it?.

  11. Hi! I couldn’t contain my excitement about a recent discovery – African-Football.com! If you’re into football sports betting, this platform is a game-changer. Personally, I’ve found their range of betting markets and odds to be incredibly impressive. The site’s user-friendly layout makes placing bets a breeze, and the focus on African football adds a unique touch. If you’re looking for a genuine and exhilarating betting experience, I highly recommend checking out https://african-football.com/. It’s already upping my football excitement – give it a shot! ⚽🎉

  12. Такси в Желтых Водах https://www.mnenie.dp.ua/service/taksi-v-zheltyh-vodah/ представлено в основном частным извозом. Машины, как правило, не новые, но водители стараются поддерживать их в приличном состоянии. Салон автомобиля, как правило, чистый и уютный. Водители вежливы и стремятся предоставить клиенту максимально комфортную поездку. Цены на поездки по городу достаточно демократичные, хотя могут меняться в зависимости от времени суток, погодных условий и загруженности дорог.

  13. I liked the fact that the study’s authors suggest that time allocation decisions should be made at the level of each salesperson, and not at the level of the entire company. Considering the experience and skills of the seller. This is a very interesting point. https://lord-of-the-rings.org/books.html
    Therefore, one bookseller in a bookstore may sell more Lord of the Rings books than another, but the fiom will make more profit according to the average distribution.

  14. https://skycoach.gg/ stands as a beacon of excellence in the gaming world. Boasting an impressive lineup of professional coaches and boosters, this platform is a must-visit for gamers looking to level up. Its affordable rates make it accessible to all, and the quality of service is unmatched. Whether you’re into FPS, MOBAs, or RPGs, Skycoach.gg has you covered.

  15. In the competitive world of online gaming, players often seek an edge to enhance their gameplay experience. Enter Gamingcy, a reputable platform dedicated to providing top-tier professional boosting services for various online games. Catering to gamers looking for an extra push in their in-game achievements, Gamingcy boasts a team of experts who ensure efficient and reliable results. One of the standout services they offer is their WoW Amirdrassil raid runs, designed for players aiming to conquer the challenges of this specific raid. With a focus on customer satisfaction and security, Gamingcy.com continues to be a leading choice for gaming enthusiasts worldwide.

    • Pressure washing can be done by yourself or by a professional pressure washing company, depending on your needs, budget, and preferences. However, using the right equipment, techniques, and safety measures is crucial, as pressure washing can also cause damage or injury if done incorrectly or carelessly. You should always follow the manufacturer’s instructions, wear protective gear, and avoid spraying on electrical outlets, windows, or plants.

  16. The implementation of this strategy requires a comprehensive analysis of the existing client base, determination of the growth potential of current accounts and, at the same time, an active search for new opportunities. It is important to maintain a holistic view of the sales process, ensuring that efforts are strategically focused on maximizing both retention and acquisition for sustainable long-term success. In addition, one can look for supporting resources, such as buy written essays , that can contribute to the integrity of the sales process, provide new perspectives on interactions with customers, and strengthen relationships with them.

  17. Offering a compelling perspective on the balance between customer acquisition and retention, this information is particularly relevant for landlords looking to maximize their property portfolios. The key takeaway is the importance of personalized time allocation strategies in sales, which can be effectively managed with the right property management software https://www.tenantcloud.com/. Such software can streamline the process of managing both new and existing tenant relationships, ensuring that landlords allocate their resources optimally. By integrating these insights with advanced property management tools, landlords can not only enhance their sales strategies but also improve overall tenant satisfaction and retention.

  18. The insights on balancing time between customer acquisition and retention are incredibly valuable, not just in sales, but in many aspects of business and personal life. It’s all about finding that sweet spot where effort and reward align optimally.

    This concept can even apply to those of us in the rental market. Just as salespeople must balance acquiring new clients and retaining existing ones, renters often weigh the decision between staying in their current apartment or seeking a new one. It’s a similar kind of trade-off – the comfort and familiarity of a current home versus the potential benefits of a new place.

    For anyone currently in this decision-making process, exploring apartments for rent https://www.rentler.com/ can provide a wealth of options and perhaps offer that perfect balance between the old and the new. It’s always worth checking out what’s available, even if you ultimately decide to stay put.

    Your point about the importance of tailoring strategies to individual circumstances really resonates here. Every renter’s needs and preferences are unique, and what works for one might not work for another. Just like in sales, a personalized approach can make all the difference.

  19. Future Bar redefines vaping with its sleek design and advanced technology. Immerse yourself in a range of flavors that embody the future of vaping, blending innovation, style, and satisfaction.

  20. I love this. It is soo informative. Are you also searching for cheap assignment help we are the best solution for you. We are best known for delivering the best services to students without having to break the bank

  21. I love this. It is soo informative. Are you also searching for cheap assignment help we are the best solution for you. We are best known for delivering the best services to students without having to break the bank

  22. Your blogs are great.Are you also searching for Nursing papers online? we are the best solution for you. We are best known for delivering nursing writing services to students without having to break the bank.whatsapp us:+1-(951)-468-9855

  23. VENTURA https://in-green.com.ua/gelevye-gel-akkumulyatory-dlya-ibp/ гелевые аккумуляторы оправдали все мои ожидания в системе бесперебойного питания в офисе. Их надежность и возможность длительного хранения без подзарядки привнесли уверенность в стабильной работе наших ИБП. Высокий пусковой ток и устойчивость к многократным циклам заряда/разряда делают VENTURA отличным выбором для бизнес-приложений.

  24. Companies can employ effective practices to attract and retain talented people. However, most of them struggle to acquire and keep employees. They can hire HR experts to guide and help them adopt friendly HRM policies and create a motivating work environment.

  25. Your blog post intricately explores the human experience, seamlessly weaving personal anecdotes with universal truths. The depth of your insight resonates, creating a tapestry of relatability. i want to share some information with you
    Obtaining a Turkey visa for Indian passport holders is crucial for travel. Ensure a smooth application process by adhering to Turkey visa for Indian passportguidelines. Submit all necessary documents to facilitate a successful visa application and enjoy your journey seamlessly.

  26. Your article is truly remarkable, and I want to convey my admiration for it. The clarity in your submission is superb, and it’s clear that you have expertise in this subject. If it’s agreeable to you, I’d love to subscribe to your RSS feed to stay informed about your forthcoming posts. Thank you sincerely, and please continue your rewarding work. When looking for the top SIM cards to purchase in Singapore, consider options from providers like Singtel, StarHub, and M1. These carriers offer reliable coverage, competitive data plans, and excellent customer service.

  27. This portion of your content is really attractive. Your post is truly wonderful, and I stumbled upon your blog recently. I’d like to mention how much I’ve enjoyed perusing your blog posts. The website’s style is just right. I’m planning to subscribe to your RSS feed, and I’m eagerly anticipating your next writing! Kenyan Passport Soars 6 Places in 2024 Henley & Partners Ranking, In 2024, the Kenyan Passport ascended 6 places in the Henley & Partners Ranking, signifying improved global travel access and enhanced international standing for Kenyan citizens.

  28. Your article is truly impressive. The clarity in your writing is excellent, and it’s evident that you’re an expert on this subject. I would like to request permission to subscribe to your RSS feed to stay updated on forthcoming posts. Thank you, and please keep up the excellent work. Indore Airport Now Accepts E-visas, Great news! Indore Airport embraces convenience with the acceptance of E-visas, streamlining the entry process for travelers. Experience hassle-free journeys with this welcome digital advancement.

  29. Hello! While this might be a bit off-topic, I’m curious if you have any recommendations for a captcha plugin to integrate into my comment form. I’m using the same blog platform as you, and I’m struggling to locate a suitable one. Any help would be greatly appreciated. Brazil visa fee for us citizens, You can check more Info via our website.

  30. Your blog is a captivating haven where words dance and ideas flourish. Each post is a testament to your passion for storytelling and depth of knowledge. The Saudi visa application process is now more convenient than ever, catering to the needs of travelers worldwide. With user-friendly online platforms and efficient embassy services, applying for a Saudi visa is a seamless experience. Whether you’re planning a religious pilgrimage, a business trip, or a leisurely exploration of Saudi Arabia’s rich heritage, the application process ensures smooth entry and stay. Entrust your visa application to reputable agencies or follow the straightforward steps outlined by the Saudi embassy. Prepare for an unforgettable journey filled with cultural wonders, historical marvels, and warm Arabian hospitality, facilitated by your hassle-free Saudi visa application.

  31. What an exciting find! Whenever I stumble upon blogs, I encounter fresh and stimulating material. There’s great merit in absorbing insights from fellow authors and incorporating them into my own growth. I’m eager to explore more articles related to this topic in the future and deepen my understanding. Brazil visa requirements for US citizens include a valid passport, completed visa application, proof of travel arrangements, and a passport photo. Apply online before traveling.

  32. Those are really great ideas for sales managers! I would like to add some technical tips for managers to secure their documents and files. The newest and the safest approach to safe the important information is a cloud storage.

    Cloud storage solutions offer sales managers the ability to securely store and access sales collateral, such as presentations, product catalogs, and price lists, from anywhere with an internet connection, facilitating seamless client interactions on-the-go.

    Additionally, these platforms enable easy collaboration among sales teams by allowing document sharing and version control, ensuring everyone is working with the most up-to-date information, thereby increasing efficiency and productivity.

    Here is the ultimate guide how to choose the right cloud storage: https://cert-trace.com/cloud-storage-for-business-how-to-choose-the-right-one/

  33. Producing blog content is a regular practice for me, and I genuinely value the quality of your work. This compelling article has caught my attention. I’ve made it a priority to bookmark your website and stay updated with new information, typically on a weekly basis. Can Indians get on arrival visa in Baku? Indian citizens can also apply for a visa through the Azerbaijani embassy or consulate in their home country. This traditional visa application process involves submitting the required documents, including a visa application form, passport, photographs, and supporting documents, directly to the embassy or consulate.

  34. I must say, your blog post left me utterly fascinated and enlightened. The seamless combination of informative content and personal storytelling made it an engaging read. I truly admire the depth of your analysis, as it offered readers a valuable and insightful perspective on the subject. Your ability to break down complex ideas with such clarity and elegance is truly commendable. I’m eagerly looking forward to more thought-provoking content from your blog. Keep up the fantastic work, and I can’t wait for your next enlightening read. How can i get Indian visa from Ethiopia. To obtain an Indian visa from Ethiopia, visit the official website of the Indian Embassy or Consulate in Ethiopia to access the visa application form. Complete the form, gather required documents like passport copies and photographs, and submit them along with the visa fee. Once processed, you’ll receive your Indian visa, permitting travel from Ethiopia to India.

  35. In your recent blog post, you embark on a literary journey skillfully navigating the realms of intellect and emotion. Vietnam visa free for Indian news. Recent news indicates Vietnam Visa is not free for Indian citizens. While the process is available, there are applicable fees for obtaining the Visa.

  36. Get on the fast track to smart financial decision-making with our everyday news of personal financial products — from credit cards to personal loans and insurance. Welcome to TheHolisticWriter, your go-to destination for a comprehensive and holistic approach to personal finance, budgeting, and bankinh news https://theholisticwriter.com/banking/ We understand that managing your finances can be a complex and sometimes overwhelming task. That’s why we’ve created a one-stop platform to empower you with the knowledge and tools you need to navigate the world of money with confidence.

  37. Creating blog posts is something I do regularly, and I genuinely admire the quality of your content. This captivating article has caught my attention. I’ve made a point to bookmark your website and stay updated with fresh details, usually on a weekly basis. Additionally, I’ve subscribed to your RSS feed. Can I travel to Azerbaijan with UK BRP? Yes, you can travel to Azerbaijan with a UK Biometric Residence Permit (BRP). However, you still need to obtain an appropriate visa from the Azerbaijani embassy or consulate before your trip.

  38. May I inquire if it’s acceptable for me to reference your posts on my blog? I assure you full credit and proper citation of your sources. Considering our shared niche, I trust your content would enrich my audience. Grateful for your consideration. Do Indian passport holders need visa for Egypt? Yes, Indian passport holders do need a visa to visit Egypt. It’s advisable to check the specific requirements and application procedures beforehand to ensure a smooth travel experience.

  39. Your blog is a hidden gem! I’m impressed by the wealth of information and the clarity of thought in your articles. Your passion for your topics shines through, making every post a joy to read. It’s rare to find a blog that balances depth and readability so well. Discover the Saudi Arabia e-visa fee Pakistan for applicants from Pakistan. Access transparent information regarding visa costs to facilitate your travel plans. Ensure a seamless visa application process by staying informed about fees applicable to Pakistani citizens.

  40. Your blog post embarks on a captivating literary journey, seamlessly delving into the realms of intellect and emotion. The flawless integration of profound insights and relatable anecdotes is truly remarkable. Each sentence unfolds like a masterful stroke of the pen, crafting a narrative that resonates deeply with readers. The India e visa for us citizens fees vary based on duration and type.

  41. Crafting blog posts has become a habitual practice for me, and I must admit, your content stands out remarkably. This intriguing piece has piqued my curiosity. I’ve made a conscious effort to save your website in my bookmarks and keep abreast of fresh information, usually on a weekly cadence. Additionally. How do I get to Baku from the UK? To reach Baku from the UK, consider flying from major airports like London Heathrow or Gatwick. Direct flights are available, or you may opt for connecting flights through European hubs.

  42. Your blog is a pleasure to read, effortlessly fusing valuable knowledge with a concise and eloquent writing style. I’m genuinely impressed by the depth of your analysis and how effortlessly you break down complex concepts. ETA to Kenya is required for travelers from visa-exempt countries visiting Kenya. It permits stays of up to 90 days for purposes such as tourism, business, or medical visits. Applicants must apply online, pay a fee, and receive approval before traveling.

Leave a Reply

Your email address will not be published. Required fields are marked *