Docs / Accounts

An account refers to the organization you are trying to win deals for. Also referred to as the customer, or client. In many businesses, an account can have multiple deals, such as upsells or repeat business. In these cases, account analysis becomes a significant factor for the business.

We can’t sell ourselves out of bad account management. Knowing our account factors is critical to sales growth

Optimizing Account Performance

Account analysis helps businesses optimize account performance in addition to individual deals. For example, an engineering firm offering tooling, consulting services, and buildouts must consider account performance to ensure their services are provided effectively and profitably. They can analyze accounts to determine which services are most in demand and have the highest return on investment (ROI). Businesses can also identify trends in accounts, such as purchase frequency, location, or customer type, to inform marketing and sales strategies.

Key Account Metrics

Several key metrics aid in account analysis:

Active Accounts

Active Accounts are the number of accounts currently maintained by the business. Increasing the number of Active Accounts is essential for business growth.

New Account Average Sale

The New Account Average Sale metric indicates the average value of all deals won for new accounts. This helps to determine if the sales team is successful in increasing pricing or not.

Account Lifetime Value

The Account Lifetime Value represents the average of the total revenue that accounts bring in throughout their entire relationship. Increasing the Account Lifetime Value is a primary goal for any business.

Future Account Value

Future Account Value represents the expected remaining future value to be earned on accounts as they mature into their lifetime. A growing Future Account Value signifies an accelerating sales engine.

Account Journey

Account Journeys refer to significant milestones in the business relationship with customer accounts. Analyzing the progression of accounts through their journey can provide valuable insights for sales pipelines.

There are 4 primary events within the life of an account:

Originated

When accounts complete their first sale, we say that we have ‘Originated’ an account

Upgraded

When an account has passed an objective milestone in their journey, we say they have ‘upgraded’. Each upgrade step in the journey is correlated with increased lifetime value.

Every business has a different set of upgrade steps.

Downgraded

A downgraded account has moved backwards in its customer journey

Churned

A churned account is an account that is no longer a paying customer.

Universal Account Journey lifecycle, curtesy of salesinsights.io

Account Churn

Account Churn refers to accounts lost due to inactivity or cancellation. Minimizing churn is crucial for business growth.

Churn Event Tracking

Different methods can be used to track churn, depending on contract and billing management within the business:

Days Since Last Deal Won: An account is considered churned if no new deals are won within a specified time frame
Explicit Churn Event: Churn occurs due to customer cancellation and no expectation of ever returning
No Active Contract: Churn occurs when there are no active contract terms in place

Understanding and effectively managing account analysis, metrics, journeys, and churn is essential for optimizing sales performance and promoting business growth.

Revenue Models

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You have completed the basic documentation for Predictable Revenue Operations. You should now have a good idea of the major factors that affect sales & revenue performance.

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