Every industry I have ever heard of has had customers that fall into different “LEVELS”. Some companies call their best accounts “A” accounts, other companies call them “BLUE CHIP” accounts. I have also heard them called “Gold” accounts, “Diamond” accounts, “Preferred” accounts and many other names. The bottom line is that as the levels drop the designations also seem to drop, for instance the level below “Gold” is usually “Silver” then “Bronze” and “Tin”.
These designations are supposed to signify a lowering in potential of the customers and therefore a lowering in value of the customers.
I want to try my best to set the record straight on this. Although I tend to agree that the top tier of accounts are usually the accounts that have the potential to spend the most, I will also contend that these accounts are the fewest in number and the hardest and longest to close. Along with that these are usually the customers from which you make the least margins on when you do close them.
Every sales rep has their stories about chasing the “ELEPHANTS” and working for extended lengths of time only to come away with nothing. For many years now I have been training reps on prospect selection and what mix of customers they should have in their pipeline.
What I have found is that a majority of reps will pursue a certain type of customer and rarely go after other levels of accounts. Meaning a rep that chases “A” accounts will only go after “A” accounts, a rep that chases “B” accounts will only go after “B” accounts and so on at all levels. This is a poor strategy.
What I have taught reps to do is to have the right mix of accounts in their pipeline at all times. The number of accounts in each level or the percent of accounts at each level will change depending on the rep and industry. The important thing is to make sure you are looking at all levels at all times.
Just like the number of accounts at each level usually increases as you go down in levels, the number of accounts you should have in the pipeline increases as you go down in levels. Let me give you an example. If you are a rep in an industry where you maintain 100 accounts in your pipeline at all time a good mix for you may be 10% “A” accounts, 50% “B” accounts, 30% “C” accounts and 10% “D” accounts.
What makes this a good mix? Easy, the accounts that usually take the longest to close and are the most difficult to close, the “A” accounts are in the mix but not occupying too much of your time. I have seen reps literally go broke waiting for “The Big One” to fall. By limiting the top accounts to 10% you can spend less time with the group but still give each account the necessary time they deserve. With 50% of your prospects “B” accounts you can focus the majority of your time on accounts that are more accessible, easier to close, ad more plentiful. The same thinking goes with “C” accounts, the difference being the potential of the accounts make them less appealing so you have fewer of them.
Every sales call using this method can then be judged against the opportunity of the account. The greater the opportunity the more invested time you should put into the account. Not the account group, the individual account.
As one account in a level closes or drops out you replace the account, always maintaining the proper percent in each level. This may sound like a lot of work to some of you, but the return on your time investment is much greater than the hit and miss process most reps use today.
Not every rep will be able to use this tool. Some of you are locked into calling on a select group of prospects by your company. No problem. If you are a dedicated “A” account rep what you need to do is to break your accounts into levels based on a criteria that will best differentiate your prospects into potential. It may be number of employees if you are selling a service or product that every employee uses. Whatever the criteria is make sure that you dole it out across the board equally to each prospect to maximize the system.
Lorin
No comments:
Post a Comment