Managing and Growing Customer Accounts

 

This article is about account management and the corollary to the sales model process. If you haven’t converted a prospect into a paying client, I recommend reading that article first.

Once you successfully land a client with an initial solution, your focus shifts to maintaining and growing the relationship. Over time, you come up with new services, products, and features and continue to build upon the original deliverable. This is what software as a service (SaaS) frequently talks about, layering the cake by coming up with an initial solution and adding more and more functionality to build the account.

Like the 10-step sales process, account management is also a pipeline system that needs documenting and monitoring. I developed a method at Seeq where we break down this reporting process into five steps with additional substeps. Basically, as with SaaS, I start with a land-and-expand strategy but add the final step of becoming so important to the customer that they ultimately become a strategic partner.

Step 1: Effectively Launched

You sold the customer your product or service, and now the work begins. The next step is to get them to use it and become comfortable with it because each product has a learning curve. Several hurdles may need to be overcome, such as delivery, installation, customization for individual customers, localization, training, validation, or proof cases. Whatever the situation may be, the product must be adapted to the case at hand. Until the client uses your product, you cannot move forward in growing the account.

Step 2: Generate ROI

Once they are using your product or service, you want to see the customer realize the value. It may be that they can deliver a product to their customers and receive value or increase their profits, safety, quality, or productivity. They need to create an ROI that is far greater than the cost of your product.

Step 3: ROI Recognized

As we know from the perception equation, just because value is being attained, the customer may not recognize or appreciate it. If this is the case, then it has no meaning to them. Sometimes, the customer takes it for granted, doesn’t see the ROI, or fails to appreciate how significant the benefit is. So, this step in the process is to ensure that the client realizes the significance of the ROI from buying your product.

Step 4: Customer Monetizes

After becoming invested in you, you now have the opportunity to monetize it. If the ROI is growing, the customer should be willing to increase the amount of resources they give you in return for the value you created. You had an initial landing package, but now, you want them more committed and to increase their investment in your company. To make this happen, you must continue to add more value. Once they increase their investment, you have the opportunity to become a strategic partner.

Step 5: Valued Strategic Partner

For ultimate long-term success, strive to make your customer a strategic partner. As they look to their future, they will think about how you can help them get there. The eventual goal is for them to consult with you and take your advice seriously and perhaps include you on their Board, advisory council, internal meetings, or discussions with their customers. Not only will they consult with you on future changes, but if they are a true strategic partner, they will provide you with input on how to adjust your product. Likewise, have them on your planning or advisory council, rely on them for making adjustments to your product plans, and count on them as part of your future from a financial aspect. When you have mutual collaboration about future plans and rely on each other, then you have attained a strategic partnership.

Tracking Process

Within each of the five steps, there are many activities to complete before moving on. Similar to the multi-milestone sales process, we closely monitor the progression, which ensures transparency with our accounts. I created an account management spreadsheet that we use at Seeq to track the progress of every customer during our weekly sales call and at the monthly Board meeting.

Every account has a name, sales associate, and account end date. For each account, we assign an Account Type.

• Type 1: We already have a signed, multi-year strategic agreement.
• Type 2: We expect this account to be important to our future, and they have the potential to be a strategic partner. We are interested in growing this relationship.
• Type 3: These modest accounts have potential upside but are not important to our future at this point. We need to monitor these accounts for upward mobility.
• Type 4: This low-level account will not make a financial impact, but we still maintain and monitor its progress.

The Overall Score ranges from 0 to 10. Zero means no progress has been made, and 10 means that they have the potential to become a strategic partner. First, we generate a score for each of the five areas based on three to five sub-metrics. Then, we average those to create the Overall Score.

For example, when determining the score for Effectively Launched, we could look at:

1. What percentage of expected users are using the product? Score: 7/10
2. How many use the product several times a week? Score: 6/10
3. How many people use the product at least five times a week? Score: 6/10

The Overall Score for Effectively Launched would be 6/10.

Regarding Generate ROI, we could document and deliver use cases to ensure a higher return than the cost of our product. We find out if they are generating an ROI far above our product’s cost.

For ROI Recognized, we try to get our customers to share information from their customer accounts because we can help by providing unique content to valuable clients. We can also send key people who created value with Seeq to industrial or strategic conferences, either alongside us or on their own. Their presentations relay their story, reinforcing the ROI and realized gains, but it helps us because they spread the word about our product.

When scoring Customer Monetization, we look at whether we have a contract with them worthy of the value we provide. We create a target for where we think their investment should be and see if they have funded that amount. The score is based on how far along they are toward that goal. If they are at 70%, then they receive a score of 7.

We look at the degree to which we are part of an account’s future when evaluating the level of Valued Strategic Partner. Seeq was founded in 2012, so we are still early in the life cycle and developing relationships. We need to continue to build deeper and longer-lasting relationships, and we use this tracking system to move us in that direction.

The three columns in the next section focus on the financials. We start with last year’s Annual Recurring Revenue (ARR) and include the delta ARR number for how much we what we want to increase that number in the current year, which is the subscription number. The final column in this section tells us how we are tracking year to date (YTD) based on the target for this year, including new accounts.

The final column of the Account Management Progress Report represents our Progress. [This model is from early February, so the numbers are not accurate as of the posting of this article.]

Using this tracking mechanism, we assess the progress toward building a close relationship with an account and seeing it grow. It also identifies gaps, and we can devise a plan with action items to correct the situation and move forward. If we have a low score of below a four, then we look to the left in the spreadsheet and identify the problem and correct it.

Evolving Process

With every solution, any company must be open to adapting their strategy based on the tracking information and the data. The only way to do this is to have clear metrics and a monitoring plan, weekly and monthly. No solution fits every situation, so devise a customized reporting mechanism that works for your circumstances.

https://tinyurl.com/32paf8u7

Calculating the ROI of AI strategy

 

Christian Cobb

The hype of AI has led to AI “champions”, AI “task forces”, and AI “working groups” at any given company, but we are seeing organizations pivot from aimless AI tinkering to driving real impact. 

Sam Altman has said we will see a billion dollar company run by one person in our lifetimes. Whether or not we do (I think we will), this hammers home the idea that 1) AI’s flexibility means it can support any part of the business and 2) benchmarks for ROI are going to change radically as AI native systems emerge.

In this blog, we’ll break down how you can calculate the ROI of AI Strategy with a simple, actionable approach to get ahead of the crowd. And how you might maximize that return.

A simple frame for AI ROI to set you up for success

Before diving into the details, let’s establish two things:

1. The definition of ROI hasn’t changed. You need to get more out than you put in.
2. We need to develop business cases, as (after all) investment decisions are made by humans. 

That is not new. What has changed is the flexibility of the technology we are looking to apply. 

That is, AI can support almost any process, function, business unit, or customer interaction.  We’ve found in the past 2 years that answering the questions of where and how to start are deceptively tricky.

 

To simplify, think of AI ROI in three primary buckets:

1. Cost Efficiency – Reducing costs, increasing productivity, and getting more out of existing assets.
2. Revenue Optimization – Enhancing customer lifetime value through upsells, cross-sells, and retention improvements.
3. New Revenue Streams – Unlocking new products, services, or business models.

These also are not new. Any investment will probably fall into one of these categories. This is the best frame to figure out where to go deeper.

Single use case, or flooded with options? Here’s how to prioritize

Organizations making build or buy decisions typically fall into two camps: either they have one clear AI use case or they’re overwhelmed by too many possibilities. 

If you have a single use case: focus on defining one key KPI that aligns with your strategic objectives. If you’re working on AI-powered customer support, for instance, your KPI might be reduced response time or decreased customer churn. Simplifying your objective helps tell your story to stakeholders and streamline execution.

If you are comparing multiple use cases: use the three ROI buckets (cost efficiency, revenue optimization, new revenue streams) to categorize and compare your use cases, apples to apples. This helps prioritize investments with the highest impact. If you really have a lot of use cases, you can start with a simple 1-5 score in each bucket to prioritize and then go deeper.

Three waves of AI adoption: where are you playing?

AI-driven transformation doesn’t happen all at once. AI adoption will unfold in three waves, much like previous revolutionary technologies such as electricity, digital, or mobile:

• Wave 1: Time, Cost & Efficiency – applying AI to existing ways of working, focusing on time savings, cost reductions, and efficiency gains
• Wave 2: Quality & Better Output – leveraging AI for better quality and enhanced outcomes. It’s not just about being faster or cheaper; it’s about delivering superior results and higher standards. 
• Wave 3: New Systems & Transformation – creating entirely new systems and ways to deliver and capture value, and redefining markets. 

It’s important to understand that success in the first wave doesn’t guarantee success in the third. Businesses must plan their AI strategies with a vision for all three waves, ensuring that investments made today help build towards transformative opportunities tomorrow. We advocate for a portfolio approach: invest across all three waves, with a clear vision for the third wave in mind.

Efforts across all waves can begin now and happen simultaneously

Investment in a given wave will naturally have different impacts on returns.

The Three Waves Framework provides a strategic roadmap for growth, ensuring organizations capitalize on immediate opportunities while building toward transformative, long-term change. Its principles are universal, applying to technology, business models, and industry evolution

Where to find higher AI ROI - stacking AI investments

One of the biggest missed opportunities in AI strategy is failing to connect use cases for systemic returns. Let’s look at an example: let’s say a company implements three AI solutions:

• AI-powered customer support to reduce response time.
• AI trend prediction to anticipate market demands.
• AI product design to develop better products.

Individually, each offers a return. But when interconnected, they create contagious ROI—customer insights from support feed into trend prediction, which informs better product development, leading to improved sales. The more these AI solutions talk to each other, the more improving one will have compounding, contagious return.

There’s no wrong way to start. Wave 1 improvements reduce costs, but these are the easiest to find and will be adopted quickly. Wave 2 makes for better customer experiences, raising revenue with repeat or new customers from differentiating features. Wave 3 starts to emerge when you have a synergistic system of AI tools that complement each other, adding to the return each provides

What does a good AI use case look like?

To ensure AI delivers real ROI, assess potential projects through this lens:

1. Does it solve a user problem? If it’s solving a real pain point, adoption is more likely.
2. Does it solve an organizational problem? If it improves efficiency or revenue, it justifies the investment.
3. Does it align with your business model? AI should enhance your competitive edge, not distract from it.

Bonus points if your solution also:

• Solves a leadership problem – e.g., enables strategic decision-making that helps steer the ship.
• Includes a clear capability vision – e.g., lays the foundation for Wave 3 transformation
• Activates your data – AI transformation is a data transformation, and figuring out data ASAP is in your best interest. If you wouldn’t bet something dear to you that your data is ready – then it’s not ready.

Key takeaways of calculating ROI of AI

 strategy

• AI ROI falls into three buckets: cost efficiency, revenue optimization, and new revenue streams.
• Prioritize AI use cases strategically by aligning them with measurable KPIs and business objectives.
• AI transformation happens in waves, from cost savings (Wave 1), to better output (Wave 2) to systemic reinvention (Wave 3).
• Interconnected AI use cases multiply returns, creating a contagious effect of business growth.
• Successful AI investments require a solid data foundation—if your data isn’t ready, you won’t be able to execute on your AI strategy.

The bottom line: be strategic about AI ROI

AI is one of the most flexible tools we’ve ever had. But flexibility without focus leads to inefficiency. By categorizing use cases, aligning investments to the right wave of AI maturity, and stacking solutions for interconnected value, businesses can unlock real, measurable returns.

https://tinyurl.com/ja5pbtkt

Marketing ROI

 

Alexey Cherkasov

It is known that the main goal of business is to make a profit. If there is no profit, the company will not be able to continue its existence. An entrepreneur must pay for labor, purchase resources, invest in promotion, provide equipment, spend money on logistics services, and much more. If you do not invest in your business, you are unlikely to get the expected result.

But despite the need for expenses, you should analyze them. We can’t just spend money and think that we did everything right, so rarely anyone adheres to such tactics. Therefore, it is necessary to track your costs and their effectiveness in order to understand what profit you will get in the future from this, how much your actions have justified themselves. Perhaps you are doing something wrong and you should think about the fact that you need to change something to get, as well as increase income. For this, the business uses the term Return on investment (abbreviated ROI).

ROI

Different formulas can be used to calculate the ROI, depending on the goals set. One of the most common formulas is the following:

Since this indicator is calculated for a certain period of time, you can add this additional value to the formula, then it will look like this:

The value can be either positive or negative. If the ROI is > 0%, then the company earns. If the ROI is <= 0%, then the company is at a loss.

ROI is used for various business lines. Today we will talk about ROI in marketing or, as it is called, ROMI (Return On Marketing Investment). Marketing ROI or ROMI shows how effective your investments in marketing activities were: marketing events, advertising, the use of individual tools, and so on. There is no single formula for success in marketing.

What works for the B2C sector is not always applicable for B2B, what is good for one enterprise in B2B will not necessarily become profitable for another, even if they produce a similar product or service. Any subtleties are important here. If 20-30 years ago marketers used some tools to attract attention and promote, now with the widespread development and use of digital technologies and the Internet, tools have adapted to a different approach, and completely new ones have appeared.

Therefore, in marketing, it is always necessary to try, try and try again. But, unfortunately, marketers do not have unlimited monetary resources for this, so they need to defend their projects, they must be responsible to the top management. And most managers are used to trust the numbers and make decisions based on them. You can show these figures using ROMI.

Marketing ROI (ROMI)

So, based on the formula by which the ROI is calculated, you can make a formula for Marketing ROI. It will look like this:

It is worth noting that for marketing, this indicator is not always easy to calculate. This is due to the fact that marketing uses a multi-channel approach, that is, to sell one type of product, it uses several types of promotion channels that have different payback periods. So you will most likely see the result of the activity from content marketing, not earlier than in six months, and maybe even later. Therefore, this formula should be adjusted to your business, and not to adjust the business to the formula, for example, you can calculate indicators for a separate type of channel or combine several channels with similar indicators.

Let’s try to figure it out with an example.

Internet Promotion ROI

Let’s imagine that Marketing Psycho is a company that produces power semiconductor devices. We need to calculate the ROMI for Internet product promotion, and we have a huge marketing budget to carry that out. To begin with, we will draw up an annual action plan and a budget for it.

Description	Approximate cost, USD.
Internet promotion
Placement of a banner on the website of industrial magazines	80 000
Placement of a banner on industrial portals	200 000
E-mail marketing	142 000
Targeted advertising in professional social networks	400 000
Total	822 000

First of all, it is necessary to count the effectiveness of banner advertising. To calculate it, you need to use an indicator such as CTR. CTR (click-through rate) is the ratio of the total number of clicks to the total number of impressions and multiplied by 100 %.

Marketing Psycho company has information that for the selected industrial portals, the average number of home page views is about 370,000 per month, that is, 4,440,000 per year. At the same time, based on research data, the minimum CTR indicator for the B2B market is 0.17%.

Thus, we get that during the year of placement of banner advertising, 7548 representatives of industrial companies will be interested in the products of Marketing Psycho (they will click on the banner). Also, taking into account the fact that the conversion rate for banner advertising on the B2B market is about 2.8%, we get that Marketing Psycho will have 211 potential consumers ready to place an order for the year due to this marketing event.

Let’s consider that the average cost per unit of Marketing Psycho products sold over the past year is $ 4,260. As a result, even if you place an order for just one product, the sales amount will be $ 898,860:

Sales amount = 211*$ 4,260= $ 898,860

Over the past year, the average marginal profit of the company’s products was about 50%, which indicates that $ 280,000 invested in banner advertising will bring the company $ 449,430 in profit. This indicates that banner advertising will be effective.

Next, let’s move on to E-mail Marketing, here you also need to take into account the conversion rate.

According to a research company in the field of E-mail Marketing, the conversion rate for industrial production companies is about 2%.

The potential customer base of Marketing Psycho is about 5,000 enterprises, which makes it possible to count on 100 future customers of the company. With a minimum unit order of $ 4,260, the total sales amount will be $ 426,000, and the total profit will be $ 213,000 with an investment in a marketing channel of $ 142,000.

Thus, E-Mail Marketing, as well as banner advertising, will be a justified choice in the company’s marketing plan.

To predict the effectiveness of targeted advertising in professional social networks, it is necessary to analyze data on the conversion of this channel for attracting customers. Based on the data of an agency specialized in this field, the minimum conversion rate of targeted advertising in professional social media is 10%, and the maximum is 20-30%.

For Marketing Psycho with a budget of $ 400,000, the approximate audience coverage will be about 500,000 employees from 2000 companies, potential consumers of power semiconductor devices.

With the lowest conversion rate, the company can count on 200 customers, and with an average of 400. With a minimum order, the sales amount will be from $ 852,000 to $ 1,704,000, and the profit will be from $ 426,000 to $ 852,000 with an investment of $ 400,000. Based on the data obtained, the inclusion of targeted advertising in the marketing plan is justified.

To confirm the effectiveness of the proposed marketing activities, we will use the Marketing ROI calculation formula.

The total minimum revenue of the company for the selected marketing activities will be $ 1,088,430 at a cost of $ 822,000. Then, substituting the data into our formula, we get:

That is, ROMI = 32.4%, which is more than 0%, so investing in marketing for Marketing Psycho company will bring profit.

The numbers provided were fictional so you can understand the method. You can try to calculate Marketing ROI using your own data for various marketing channels.

And keep in mind that every theory has to be tested and verified. It concerns marketing activities as well.

https://www.marketing-psycho.com/

How to calculate the ROI of lead nurturing

 

ROI of lead nurturing

Lead nurturing helps you build a relationship with potential customers and accelerate their buying journey. By staying in touch regularly, you ensure that your brand comes to mind when they’re ready to buy.

Most marketing leads never convert into customers. Lack of lead nurturing is the most common cause of this poor performance.

How to Calculate the ROI of Lead Nurturing

Lead nurturing has many benefits:

• Accelerating your sales cycle
• Educating people who want to learn more but aren’t ready to buy
• Growing your revenue by reactivating cold leads and creating new sales opportunities
• Increasing awareness for your brand or product
• Increasing lead-to-customer conversion rates
• Generating more qualified leads, while driving down cost
• Despite these benefits, optimizing your first nurture journey can take some time. That’s why it’s important to start with a quantified return-on-investment (ROI) goal, against which you can measure your success.

The two main drivers of calculating expected ROI from lead nurturing are your lead-to-customer conversion rate and your average sales price (ASP).

You’ll want to forecast ROI separately for nurturing new leads and reactivating stale leads.

Calculate the ROI of nurturing new leads

The ROI of lead nurturing comes from the revenue generated from nurtured leads, compared to those who are not nurtured.

How to calculate the ROI of nurturing new leads

Calculate your current monthly revenue from new leads

Take the number of new leads you bring in each month. Multiply that number by the rate at which you convert them (currently), and then multiply that by the average amount each customer spends. It looks like this:

New Leads x Current Conversion Rate x Current ASP = Monthly Revenue from New Leads

For example, if your baseline lead-to-customer conversion rate is 10%, and you attract 500 new leads a month, that’s 50 new customers each month. With an ASP of $100 per customer, that converts to $5,000 in new revenue for that month.

Calculate the new monthly revenue generated from nurtured leads

When done well, lead nurturing should increase your conversion rate by at least 25% and your ASP by 40%.

New Leads x Increased Conversion Rate x Increased ASP = Monthly Revenue from New Nurtured Leads

Using the above example, lead nurturing should increase our conversion rate from 10% to 12.5% and our ASP from $100 to $140. If 12.5% of 500 leads convert, that’s an additional 12.5 customers for that month. At an ASP of $140 per customer, that’s $8,750 in surplus revenue.

Calculate the difference between the two

Take your estimated monthly revenue after nurture and subtract the monthly revenue you currently generate from new leads each month. The difference is your predicted lead nurturing return on investment.

In our example, we subtract $5,000 (monthly revenue from new leads) from $8,650 (monthly revenue from new nurtured leads): $8,650 – $5,000 = $3,750

Lead nurturing gives us an extra $3,750 dollars per month or $45,000 in incremental revenue per year. That’s a 75% increase in total revenue just through effective nurturing of new leads.

Calculate the ROI of reactivating old leads

What about the costly leads that are sitting idle in your database? They clearly had a relevant need or interest in your solution in the past. Yet, apart from sending them occasional newsletters, they likely haven’t heard from you in months (or even years). If you aren’t actively nurturing these leads, you’re leaving money on the table.

How to calculate the ROI of reactivating stale leads

The ROI of reactivating old leads is relatively simple. It’s the revenue that you generate from stale leads in your database, who otherwise wouldn’t have converted. Let’s walk through it.

Estimate how many leads you’ll re-engage each year

Armed with a solid nurture journey, you can conservatively expect to reactivate 2-5% of your contact database.

Let’s say you’re sitting on 50,000 cold leads. If you can reactivate just 2% of those, that’s an additional 1,000 leads per year.

Calculate how many of these leads will convert into new customers.

It may take longer for these leads to surface, but when they do, they’re likely further along in the buyer’s journey — leading to higher conversion rates. It’s safe to estimate that your nurtured leads will convert at three times your baseline.

Continuing with the example above, our conversion rate for these leads would be 30%, three times more than the 10% conversion rate we see with new leads. That’s an additional 300 customers per year.

Now multiply those new customers by the ASP

Remember: Nurtured leads spend about 40% more than new leads. With an ASP of $140, those 300 customers contribute $42,000 in additional revenue per year: 1,000 (reactivated leads) X .3 (conversion rate) X 140 (ASP) = $42,000 (revenue from reactivated revenue).

The potential ROI of lead nurturing

In the examples above, we’ve shown how a company that generates 500 leads per month, with an ASP of $100, and 50,000 contacts in their database, can generate $87,000 in revenue each year from new and reactivated leads through lead nurturing.

While this is a terrific result by itself, a less tangible (but equally valuable) outcome is that you’ve educated your customers. And nurtured leads that become customers are your best customers. They tend to extract more value from your product, purchase more often, spend more, stay customers for longer, and drive more referrals.

If you haven’t done any nurturing in the past, you’ll likely see an initial spike in reactivated leads when you launch your first journey. As new leads go cold, you’ll have an ever-growing base of cold leads to reactivate — meaning the ROI of nurturing cold leads is an ongoing process.

https://bit.ly/3mi3GO8