A challenge I hear from many salespeople and business owners alike is that there is never enough time to keep in touch with all their clients. The results can be many lost opportunities and indeed lost clients.
Our existing clients offer the best opportunity for future growth for a couple of very good reasons. Firstly we have already earned their trust as an advisor/supplier, and are therefore most likely to be offered the first opportunity of further work. Indeed, in many cases we are only getting a percentage of the business. Some studies have shown that most of our better clients are in fact only giving us slightly more than 50 per cent of their potential business.
Secondly, a key reason for the missed opportunity is a lack of account strategies and planning, particularly in smaller businesses. This may come as a surprise to many salespeople who seem to believe if we look after the clients we will automatically get all their business. So to maximise sales to our existing clients, we need to develop an account strategy.
The first step in this process is to identify the services and products they are already buying from us, then work out what other needs we can fulfil for them and build these into our call objectives.
Another step is to work out a call cycle. This will depend largely on what type of client you are dealing with. A common trap is to categorise only by turnover. It is very important to look at a number criteria when categorising accounts, such as gross profit, margin, lifetime value, wallet share, or potential growth.
Categorise your accounts
All accounts, including those of prospects and customers, should be categorised to keep their call frequency as productive as possible. You must decide which accounts are most important to your company. Categorising helps determine this. For every prospect or customer, there is a call frequency that will give you maximum return per call.
It is based on the belief that a greater portion of time should be spent on prospects or customers who offer larger volume potential. Less time should be spent on lower volume prospects or customers.
You will categorise your prospects or customers as A, B, and C accounts. ‘A’ accounts are major; statistically they number about 15 percent of your accounts and give you 65 percent of your volume. The following 20 percent of your accounts are ‘B’, or minor accounts. They give you 20 percent of your total sales. Of the remaining prospects or customers, 65 percent are ‘C’, or marginal accounts. They give you 15 percent of your total sales. These percentages apply in most industries and are an excellent rule of thumb for determining account classification and setting sales call frequency.
In most businesses, this simple analysis is rather startling. You will probably find that a small number of accounts produce the majority of your sales dollars, whereas a majority of your prospects or customers provide you with a small percentage of your sales. The classic statement that “80 percent of your business comes from 20 percent of your customers” is refined somewhat in the three account classification – A,B and C.
If you go through your database of clients and categorise them as A, B or C, you can then manage your time more effectively and look after the 20 per cent of your clients who are indeed giving you 80 per cent of your income, and more importantly, retain these very valuable clients through regular call cycles.