Preliminary findings from the Alexander Group’s 2016 Modern Media Ad Study indicate most media companies achieved double-digit growth last year in digital sales (compared to 9 percent in 2014¹). However, many companies labored to retain existing business. High-performing companies continue to exceed digital sales expectations, while mediocre sales organizations haven’t figured out how to manage customer churn. How can struggling companies raise the bar on digital sales like their high-performing counterparts who successfully manage all three of the growth levers – Retention, Penetration and New Sales? AGI has uncovered six hidden culprits of customer churn for digital solutions that undermine retention and hinder potential revenue growth.

A recent client example illustrates the problem.

Retention-penetration-conversion chartV2-20160322blog

This client’s sales force has to make up for over 44 percent of lost business by a) keeping more of the revenues they have, b) selling more to their current accounts and c) capturing new logos. That’s a lot of work.

What are the hidden culprits in sales organizations that can lead to this type of customer churn?

  1. Poor Understanding or Misalignment of ROI – Either customers don’t know the type of ROI that media advertising can deliver or companies haven’t effectively aligned the campaign goals and client expectations.
    •    A multi-product solution can be difficult for many clients to understand. Continue to simplify the education of the customer on what ROI really means.
  2. Lack of Courage to Ask for Necessary Investment – Successful campaigns need to have the right reach, product mix, frequency and duration. Sales reps need to arm themselves with market intelligence, success stories and ROI to justify a significant investment.
    •    Sales reps must have the courage to say “no” if they know that the solution the client is willing to buy won’t provide the desired results.
  3. Limited Generalist Skill Set Unable to Renew Specialist Sale – When Specialists make the initial sale, it’s important to ensure that the generalist reps have the skill set or support to follow up on campaign statistics, optimization and the next sale.
    •    Ensure sales reps do the proper planning before re-engaging with the client. The event of the sales starts at close. Make sure that the client is willing to spend time after the close to participate in iterative optimization discussions.
  4. Inadequate Operations and Analytical Support – The transition to digital solution selling requires significantly more support than a traditional product-centric model. This includes pre-sales support in the form of market intelligence, consumer research and vertical-specific value propositions. Post-sales support — from integrated campaign analytics, optimization and fulfillment – requires additional investment.
    •    In the evolving, complex world of digital solutions, sales reps can’t know everything. Companies should consistently arm their sales reps with analytics.
  5. Generic Value Propositions – Value propositions can’t be generic. They must be tailored to the specific industry, customer and campaign. The overall value proposition must provide differentiation from the competition.
    •    Articulating value must be a multifaceted approach – company, seller, solutions and results.
  6. Unequipped Sales Managers – Digital solutions selling requires a lot from our field sellers, but even more from sales managers. The sales manager must ensure proper client impact analysis, impactful proposals and consistent sales excellence in improving client outcomes.
    •    As with any sales organization, the sales manager is the link between strategy and results.

Clearly, competition in the digital media space continues to be fierce. Retaining existing client spend may offer a foundation for delivering growth. However, just looking at aggregate results may not convey the entire story. The six hidden culprits of customer churn can be making your sales organization work much harder than necessary and undermining your ability to grow even more!
¹AGI 2014 Media Ad Study

Learn more about the 2016 Modern Media Ad Sales Study.

Read more media insights in the Alexander Group Chief Sales Digest.

Contact an Alexander Group Media practice leader.


Insight type: Article

Industry: Media Sales

Role: C-Suite, Sales and Marketing Leadership

Topic: Digital, Revenue Growth

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