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TSIA’s CEO, J.B. Wood, has often stated that “Growing Annual Recurring Revenue is a process, not a heroic act,” and we at TSIA believe this to our core. We have seen that the process, rather than any one individual or team, “owns” the customer. But when it comes to big deals, especially with new customers or new groups within your customers, your company’s top salespeople are still the only ones for the job. Only they can accomplish the tough tasks of gaining stakeholder alignment, negotiating price and contractual terms, and casting strategic visions. No one else at your company can do what your best salespeople can do. Unfortunately at most companies, that’s not what your salespeople are doing.
In our recent Expand Selling Benchmark survey, we found that on the median, account executives are spending an astounding 83% of their time with existing customers. They handle not just the upsells and cross-sells, but also much of the account management, customer service and other “administrivia” that goes into dealing with large customers. Instead of doing the deals that only they know how to do, they get wrapped up in lower-value tasks. It would be like Superman spending his time rescuing kittens from trees. Is he good at it? Sure. Is it the best use of his time and skills? Absolutely not.
Account executives are spending an astounding 83% of their time with existing customers instead of selling.
So, how do you free up the time for your salespeople to do what only they know how to do? Well, first you have to get them to let go a little bit. They have to offload some of their duties to your Services and Customer Success reps, who not only drive adoption of your offerings, but also can handle many of the incoming projectiles that cause your Sales team to be reactive instead of proactive. This isn’t easy for them, by the way. Salespeople like control. They like to feel as though they are the only person the customer needs to go to when they need something. Unfortunately, this approach doesn’t scale. It leads to a lack of productivity and, perhaps more importantly, a lack of customer growth.
When teams other than Sales are in charge of upsells, ARPA can grow to more than double at 15.4%.
In TSIA’s recent 2017 Upsell & Cross-Sell survey, we found that when account executives are primarily in charge of upsells, their accounts grow at a rate of 7.3% (measured by ARPA—Average Revenue per Account). However, when everyone but your Sales team is in charge of upsells (including Customer Success and Services, channel partners, and e-commerce), ARPA growth more than doubled to 15.4%. Having other teams handle these smaller opportunities not only leads to more customer growth, but also better outcomes, as in many cases the upsells they handle are helping the customer meet their goals and drive value from their technology investments.
Don’t pull Michelangelo off the ceiling to paint the fence. Don’t make Tom Brady play both quarterback and equipment manager (maybe not the best example…I don’t want to take the air out of this blog post). TSIA Expand Selling and Customer Success research can help you keep your best salespeople doing the things your company needs them to do, that only they can.
Post Date: November 9, 2017
Steve Frost is the vice president and managing director of revenue research and advisory for TSIA. He also serves TSIA’s vice president of expand selling research. Throughout his career, he has held various leadership and business development roles at companies like Google, Netscape, and Loudcloud, helping them define their go-to-market strategy and business development tactics. Steve is dedicated to helping technology organizations grow their services, subscription, and XaaS revenue by optimizing their practices for growth throughout the customer lifecycle.
The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.