SALES ANALYTICS

Account Penetration Strategies

We all want to grow our business and close more sales. Unfortunately, many small businesses and even big companies are also not making use of highly effective strategies to increase their profits. For them, just selling their products and services is enough because digging deeper into their microeconomics is too time consuming and wasted effort.

We understand that learning about marketing strategies, penetration, and account management can be overwhelming, however, without thorough investigation into account activity, you’re more likely to lose valuable profits instead of strategically growing your company. Understanding account penetration can be extremely useful.

What does Account Penetration mean?

Account penetration, also called market penetration, is a sales metric used to determine the amount of money that a specific company has put into your business compared to their total spending on other competing companies. It is primarily used to determine the effectiveness of a business’s marketing strategies and paves the way for improvement that is meant to yield an increase in profits.

““We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little better.””

— Jeff Bezos

Since account penetration can effectively display the processes that are working and highlight the ones that aren’t, it is an important long-term strategy that companies have to invest in to improve their account-based marketing (ABM) strategy. It is also a process that determines the “loyalty” your consumers have with you, which allows you to act on the things you need to develop to boost your profits and improve client relationships.

According to GlobalPartnersTraining.com – 61% of companies say, “training in strategic account management,” can enable them to enjoy greater revenue, profit, and customer satisfaction. (1) For many organizations, they use penetration to determine the success of their salespeople and offer relevant training to improve the performance of their team.

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How do you measure account penetration?

Before discussing the techniques behind improving account penetration, you’ll need to understand how to calculate your data first. This is called the account penetration ratio.

To get the ratio, use this simple formula:

Account Penetration = (Account Revenue ÷ Customer’s Total Comparable Spend) × 100

If it’s somewhat confusing, here is an example of the formula in use:

A company that sells specialty soap gets an average of $60 every year for every customer they have. The usual spending every year for a customer with specialty soap is $500.

Account Penetration = (Account Revenue ÷ Customer’s Total Comparable Spend) × 100)

Account Penetration = ($60 ÷ $500) x 100

Account Penetration = 12%

The Keys to Successful Account Penetration

Aside from a variety of methods and tools to assess data, account penetration requires utmost patience before one can see the benefits of their hard work. Here are the top strategies you can implement to positively impact your marketing and improve your penetration ratio.

Choose the right customers

Since profit maximization is a goal of every company, an effective account penetration strategy starts with targeting the right consumers for your products. Experts would say: penetration is not just a tool but a process that begins with owning an account that brings value to its consumers. Penetration is not a single event in time, more so, it’s a commitment to a daily process that has a compounding effect.

If you aren’t reaching your desired penetration rate, you may want to evaluate your existing consumer base. Are you marketing your services effectively to the right consumers? Are you offering your goods to a company that will use your products best? If you know your target market, you are one step closer to getting the conversions you’re after in the upcoming months or years.

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Implement a good cross-selling technique

Simply put, cross-selling is the process of selling new goods, products, or services to your existing consumers. This technique works best when you suggest additional products that are highly related to your current product line. As a result, consumers may buy more when the products nicely complement each other.

An example of cross-selling looks like this: If the Smooth and Silky Company sells shampoo and conditioner, they may want to sell combs and hair ties to their clients.

In commerce, you want to know and identify what products your customers need and place value on. This is exactly the reason why a business needs to analyze its ideal customer profile and invest in research to further improve its sales.

Maintain quality relationships with existing customers

To improve company profits, you need to take care of your existing customers. That’s why customer retention is an important factor every company needs to focus on. What is the most effective way to keep customers? Simple: create the best product in the marketplace, stay in front of them, and don’t give them a reason to leave in the first place.

It’s understandable that many of us think the way to revenue growth is by acquisition of new customers – that’s certainly one way to do it. Unfortunately, focusing on new sales defeats the purpose of getting repeat customers. This means that there may be something lacking in our products or the way we run our business that leaves clients unsatisfied. Going for the quick wins could be nice at the moment, but it could also be a shot in the foot in the long run..

Apply an effective customer marketing strategy

It’s evident that recurring clients can be the lifeline to a business, so let them know that their patronage is appreciated by doing small gestures of appreciation, like providing small discounts or freebies. These small gestures go a long way with many customers. If you’re creating products that are complimentary to others in your product line, it’s reasonable to expect a current client to be interested in the other products as well. This is how you create “stickiness” within your customer base.

Marketing your products can be complicated, it can also be costly and take time to nail down before you get the right message in front of the right audience. Make sure that you are offering high-quality and high-value goods that you clients will love.

As an example, a dog food company may offer a free bag of kibble to its consumers after every 10 bags of kibble they buy at retail price. Not only is it evident that they like your consumable (they’ve already purchased 10 bags) but getting a free bag is a benefit to purchasing from your company. Not all dog food companies offer this loyalty benefit, so it’s another way to stand out and take up market share while increasing penetration rate.

Do not be afraid to target enterprise clients

Marketing your services to big companies can be intimidating, especially if you are still starting to make your way in the industry.

However, if you really want to reap more rewards for your services, targeting enterprise clients can be very lucrative. When it comes to sales, never dismiss opportunities before looking into them. Make sure to encourage your team to get high-ticket companies and you may cultivate a beneficial relationship between your small business and their already established one.

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Establish an account management framework

st but certainly not least, a business will need to establish an account management framework if its ultimate goal is boosting its penetration percentage. By definition, account management is the process of building a long-lasting partnership with your existing customers.

What must be included in the framework? Since account management begins when the client is acquired, the process involves the onboarding phase and continues even after they are no longer a client for any singular product. Hopefully you’ve created some “stickiness” with this client, so this phase should never really end. Your account managers need to continuously market your ancillary products and services to this client to regain their business, again increasing penetration.

Do you want to increase your account penetration strategies?

Without sufficient knowledge or training, breaking into the world of acquiring and keeping clients can be laborious and difficult, but if you are equipped with the right tools and data, it is now possible to improve your Account-Based-Marketing to grow your business without wasting too much of your team’s valuable time and resources.

Check out ReconInsight’s Ri360 – a brilliant business analytics software. We also provide consulting services that will not only help you manage your data but also help with other important analytic tasks such as data strategy, optimization, management, and more. If your goal is to increase company revenue, jump on a call with our strategists and we’ll show you exactly how our tool can help you achieve that goal!