Change Your Performance Numbers

We like to say that one of the main reasons our clients hire us is to help them “change their numbers.” There are two numbers in particular that we pay special attention to: the attrition of the Key Accounts and the growth of the Target Accounts.

To show you the impact these two sets of numbers can have on your performance, we are going to use actual performance numbers that we have helped our clients achieve, but we are going to show them to you in the context of a $100 Million company we will call Millennium Media.

The first number we look at is Key Account attrition. Key Accounts are your most valuable clients. They generally represent 70% of your revenue.

When we began working with Millennium Media, their Key Accounts were shrinking at the rate of 35%. This is a number that many in the media business consider to be normal. By carefully choosing the accounts they wanted to grow, setting specific growth goals for each, and taking a marketing approach to the development of the accounts, they successfully reduced their attrition to 22% in year one and 16% in year two.

By bringing marketing ideas to their most valuable customers, Millennium Media preserved $13.3 million that they did not have to replace with a lot of small accounts. Clearly, Key Account attrition is a number we want to reduce. Now, let’s look at the number we want to grow.

Target Accounts are small accounts that the sales people have deliberately chosen to grow into Key Accounts. These are accounts that spent either very few dollars or no dollars at all in the prior year, so you might say that they are the best kind of new business. Millennium Media’s annual Target Account revenue grew from $6 million to $ 11 million to $15 million.

All told, Millennium Media either preserved or created $28 Million.

You might find it interesting to conduct a similar analysis in your company. You might discover that your most valuable clients are shrinking at a much higher rate than you want them to. By the same token, take a fresh look at your new business effort to discover how many of those Target Accounts actually grow enough to become Key Accounts.

Let us know if you need any help changing your numbers.