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Winning and Losing Key Accounts

Key accounts can be significant for a variety of reasons: their premium volume, profitability, marquee status, relationship with producers, or a combination of these factors. Losing them is never easy. In this article we discuss learning from the experience, replacing it, and preventing future losses. On the positive side we also talk about winning a new key account, maximizing the experience and replicating the success.

Key accounts can be significant for a variety of reasons: their premium volume, profitability, marquee status, relationship with producers or a combination of these factors. Losing them is never easy. In this article we discuss learning from the experience, replacing it, and preventing future losses. On the positive side we also talk about winning a new key account, maximizing the experience and replicating the success.

WHEN YOU LOSE A KEY ACCOUNT

UNDERSTANDING WHY
Learning from the loss is vital to regain your momentum as well as to prevent further slides. Since this is a key account, you most likely have a relationship with people on the inside of their organization. Contact them, express regret you weren’t able to meet their needs this time around, but hope you will be back in contention in the future. Then ask for specific reasons why you lost the account. Position this as advice so you can do better next time. Interview your staff for their perspective as well. Make sure their view of why the account was lost is consistent with the account’s view as a reality check. If a key contact has left that company, try to find out where they went – it may be a good lead for new business opportunities.

EMPLOYEE MORALE
Staff, particularly those with direct contact with the lost account may react in any number of ways from disappointment, to surprise, to betrayal. As a significant relationship they may feel pressure on how this impacts overall results and their job. Often these discussions are called Post Mortems, an unfortunate choice of words, but somewhat accurate. Better to use this time as a Lessons Learned Meeting. The employee may need reassurance or motivation so they don’t fall into a slump. Getting them back on the horse is a priority.

REPLACING
No one is insightful enough to accurately predict retention – there will always be surprises. But a lost account impacts both revenue and profitability. The revenue is obvious, profitability a little less so. New Business is generally less profitable than existing business due to acquisition costs and that you just don’t know an account as well in the first year as you do in the 5th. The longer an account is with you, the more profitable it should be, not to mention the opportunities to penetrate it better with more products and services, and get referrals. So when you replace a profitable key account with a less profitable piece of new business you impact your entire book of business.

Of course it takes longer to obtain a piece of new business than it does to lose one, so you have to anticipate loses as well as new business growth by proper pipeline management. Go beyond your sales objectives with more targeted accounts, more producers and more submission flow. In any part of the market cycle, this is just good sense – in a market where you have significant adverse potential due to vulnerable key accounts – its even more important.

PREVENTING FUTURE LOSSES
One loss happens, 2 is a problem, 3 is a trend. Before that happens, make sure you use the information from your Lessons Learned Meeting. If it is a change in the competitive environment you may need to adjust your strategy, if it is a process problem – you may need to put resources together to address it, if it’s service, look at workloads, employee skills and attitudes. Training may be a solution to consider.

Look at your book of business and objectively appraise which accounts are vulnerable, then do something about it. You account appraisal should be part of your annual review or forecast and its even more critical when you are beginning to see some indications of a trend. Make sure you have good points of contact with all accounts and redouble your efforts with ones who may be vulnerable.

WHEN YOU WIN A KEY ACCOUNT

Congratulations are in order for your entire team. Let them know your success and make use of the following tips in communicating with them.

UNDERSTAND WHY
As with a lost account, you need to understand why a piece of business came over to you. With lots of choice as to whom to do business with, the criteria a client uses to select you has implications on product and services you will provide them and the level and type of communication that should be part of the Account Plan. Use these successes as stories you can tell others (prospects and producers) who may have similar issues.

USE PUBLIC RELATIONS
Make sure everyone who is in contact with the new account – or who may be – is aware of the account’s critical issues. It may be helpful to have a central control for all account contacts for anyone who may interact with them to get current on the account’s concerns. This internal communication keeps you on top of any changes.

Externally you may wish to let others know about your new account. News releases, client lists etc, have their place, but beware the impact of such openness. In addition to it being a benefit to let other prospects know of your expertise, it also lets your competitors know whom they might be able to rustle come next year.

REPLICATE SUCCESS
Don’t rest on your laurels. Build on your momentum. A good win is the beginning of a good trend. Capitalize on the lessons learned from the success by communicating how it happened and any unusual aspect of your product and service offering that contributed to it. Use these as context for re-examining targeted accounts to see what similarities you might leverage.

Balbresky Consulting Services
INSURANCE TRAINING FOR BOTTOM LINE RESULTS
(856) 985 – 0955
pbalbresky@verizon.net
visit our website at
www.insurancetrainingbypaul.com
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