Review Accounts to Set Sales Priorities
/I always advise my clients to run a report of their current accounts, sorted by the amount of sales revenue they represent. The largest clients should be at the top and the smallest clients at the bottom. These are the questions they frequently ask me about this activity.
What am I likely to find?
Most of my clients discover the following:
- Once they get past the top 10 or 20 accounts, the remaining accounts represent much less revenue than they thought. The dollar amount drops off fairly quickly.
- One or two accounts that they think are top accounts and have paid considerable attention to are not in the top 10 or 20.
- Several accounts spend a lot more money with their company than they realized and they do not spend any appreciable time with them.
- The account list is “top heavy” and “bottom heavy” with few accounts in the middle.
- Many accounts are stagnant. They spend the exact same amount of money every year and buy exactly the same type of product. There is no growth.
What should I do with this information?
Once you have established who your top customers are, determine what percentage of your allotted sales time should be spent with each one and on what type of activity. Some may just want to meet and discuss business; others might like to play golf.
- Figure what the top companies have in common as well how they are different from each other. Let the commonalities help you to identify the ideal customer.
- Let the differences serve as a guide to the type or size of company that might be missing from your account list. Create a sales and marketing plan to proactively add those types of companies to your account roster.
- Make sure that your salespeople understand who the very top accounts are, have the skills necessary to grow the accounts, and are spending the right amount of time with them.
- Learn about and get to know the second tier customers to determine which ones might have strong growth potential in the coming years.
What should I do about the large number of companies who do almost no business with my company?
Divide that group of companies up and have the salespeople call on them. Determine which ones have potential and which ones do not. After that activity is complete, there may be some companies that should move into inactive account status. You might consider dropping them from sales territories and marketing campaigns. Put your efforts into bringing on the type of accounts that you really want to do business with.
How often should I run this type of report?
Every other month. If you do this exercise on a regular basis, you will rarely be as surprised by what you see as you were the first time. But you will become more adept at spotting trends within your customer base and you will be more aware of how individual companies are performing.
There is one added bonus that my clients often overlook. Running a report like this makes you less dependent on your sales representatives “take” on how things are going with a certain account. You now know. It makes conversations with them more constructive and you won’t be caught off guard late in the year when a particular account is down by a significant percentage. You will have the account information at hand.
Though my clients come from many different industries, the challenges they face are similar. In “Sales Management Tips,” I regularly answer questions that have been posed to me by my clients. I hope the answers will help you to solve some of the sales dilemmas you face in your own sales organizations. If you would like to ask a question, please contact me. The identity and affiliation of those submitting questions will be kept confidential.
