Preventing Attrition Part One: Avoid the Competency Trap.

finger trap

During a recent conversation a colleague speculated as to why client attrition happens.  “Sometimes the competition buys the business,” he said,  “and we might be complacent at some point.”  These can be deal breakers.  Most customers, however, are willing to forgive the occasional service gaff or price negotiation unless it goes uncorrected or unaddressed–especially if the service is no worse than the competition’s.  That aside,  attrition happens when a salesperson loses her expertise gap or because firm’s value-added offerings are built primarily from a narrow supply-side perspective.  Correcting these problems will help salespeople and organizations reduce attrition while improving customer loyalty.

Attrition occurs when a salesperson’s capabilities fail to evolve with the customer’s needs and expectations.  One salesperson can successfully influence a start-up sized client.  A small number of decision makers coupled with a fervor to grow their business is fertile ground for nearly every salesperson.  Engaging this account, introducing new services and support, and normal follow-up procedures are enough to retain the business during the early stage of the relationship.  For salespeople these are gratifying times because organizational value can help nearly every small business–it widens the expertise gap.  Attrition starts when this gap starts to shrink. Salespeople who respond to this contraction by using strictly organizational solutions quickly fall in to the competency trap.

Salespeople continue losing ground when their customers’ businesses evolve faster than they can keep pace.  In lieu of practicing what Clayton Christensen calls “demand-side selling,” reactive salespeople maintain an entrenched supply-side perspective.  As a result their retention strategy is constrained by either the quality of the client relationship or pre-packaged talking points: products, programs, and price.  This supply-side efforts risk immediate parity while increasing the likelihood of a price bake-off.  Without considering the applicability of their offerings, salespeople attempt to create positive leverage with annual marketing programs, cheaper web services, loyalty incentives, and fancier trips.  They risk getting “better and better at things their customers care less and less about.”  At some point a growth-oriented client is simultaneously inundated with these offerings yet inclined to look for fresh and innovative offerings outside of the familiar.

In larger accounts attrition is the result of Dunbar’s Number.  Beyond a certain point one salesperson is functionally unable to effectively “manage” an account that includes multiple-decision makers, varied priorities, and busy schedules.  As a result the salesperson may seek out her comfort zone–spending an inordinate amount of time with the people they feel they can best work with.  At this point the competency trap happens because firms have historically categorized salespeople as solo specialists.  Unable to adapt quickly or to build collaborative teams they attempt to retain business with a “mighty edifice of obsolescence.”  In order to prevent attrition among high-value accounts a salesperson must rely on a collaborative effort that is contrary to many firm’s definition and handling of a sales team.

Ultimately, attrition reflects a systemic problem that sales managers are expected to prevent.  Sales managers, generally promoted from the ranks, often encourage the high-performing salesperson who just “gets it done.”  The description probably applied to sales managers themselves.  As a result, many sales managers that I’ve worked with utilize collaborative strategies to a very limited extent: under duress or with high-value accounts.  Organizationally, inside and outside sales teams are coached in isolation rather than as a team.  Sharing best practices becomes a word-of-mouth transmission. Practical collaborative competencies that become force multipliers are viewed as aspirational if disruptive.  And as if often the case, the rules and expectations for collaboration are undefined.  Bear in mind, this is no fault of the sales manager.  Busy sales managers deal daily with their own competency trap.  They are some of the hardest working professionals in any firm.  Yet, preventing attrition cannot be the job of one salesperson or of one sales manager.  It requires a deep rethinking of how sales teams are managed, what “sales teams” are, how they function, and how they use resources in order to retain accounts and prevent attrition in a world in which the pace of change is only accelerating.

 

 

 

Published by Matt Plughoff

Exploring the next evolution of small business success.

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