Business Journal, November 6, 2004
your sales, adopt a major-accounts strategy
Barbara Bix and
Beth Somers Stutzman
Did you know you can increase your company’s revenues—without necessarily
adding more resources? The key is to capitalize on past success. Consider redistributing
sales resources to concentrate more energy on accounts that currently spend more
with your company and those with similar profiles. Chances are good that you
can develop these “big spenders” into higher volume purchasers and
long-term partners through a major account strategy.
Here are the steps
to take advantage of this opportunity at your company.
Step 1: Categorize
your accounts based on historic performance
Group existing accounts
into 3 groups by revenue: high revenue accounts are frequent purchasers.
Average revenue accounts have bought more than once from your company
and have had a positive experience. Below average revenue accounts
are occasional purchasers.
Step 2: Determine
if your highest revenue accounts represent the majority of your business
Look at your high
revenue accounts. Do they represent a disproportionate percentage of
your revenues? As a rule of thumb, if at least half of your revenues
come from the top 20% of your clients, you many want to consider a
major accounts strategy to cultivate them further.
Step 3: Evaluate
each high revenue account individually to test for future success
Can you replicate
success in each of these accounts? Frequency is not sufficient. Have
you laid the foundation for a relationship that will motivate loyalty?
Your high revenue accounts hold the keys to your success because they
have repeatedly demonstrated that they are willing to do business with
Ask yourself whether
it is likely that they will continue to be your highest revenue generators?
It largely depends on the relationship. If you have fostered trust
and established a good relationship through either a string of positive
experiences with these customers and/or working successfully through
a number of product or service glitches along the way, then you have
sown the seeds for a long-term partnership. It is likely that if you
spent even more time at these accounts you could come up with additional
opportunities to serve them. Moreover, as the relationship grew even
stronger they would have a greater propensity to buy any new products
or services from you over your competitor. Given these tendencies,
it makes good business sense to focus majority of your sales efforts
on these accounts.
Step 4: Intentionally
cultivate your high revenue accounts
A Major Account strategy
concentrates on building relationships with a few high revenue potential
accounts and then selling each one as many products or services as
possible over a long period of time and across different product lines.
The major account salesperson’s role is to cultivate or “farm” a
few select high revenue potential accounts for new and repeat business.
The emphasis is on
investing in the relationship and creating future opportunities, rather
than merely consummating the sale. Each interaction gives both parties
the opportunities to learn more about each other, strengthen the relationship,
and ideally create additional opportunities to work together.
The desired result
is to sell more and more products and services to each major account,
create win-win relationships that block competitor entry, build long-term
customer loyalty, and ultimately, develop a sustainable growing business
from each major account. In essence, you are asking the customer to
collaborate in the selling process. Over time you and the customer
will develop a joint interest in the success of your products or services
as they relate to each major account.
Step 5: Complement your existing sales strategy
Implementing a “major
accounts strategy” does not mean jettisoning your current sales
strategy. While the major accounts role focuses on a few pre-identified
high revenue potential accounts, the remaining salespeople sell to
everyone else. Whether they are assigned to a territory, a vertical
market, or a particular product line, these salespeople continue to
perform business as usual. Major account salespeople farm; everyone
else hunts. Their job is to sell as many products or services to as
many different customers as possible.
Step 6: Track
If you don’t
already have one, create an infrastructure to track success. This will
help you verify that you are getting increasingly greater revenues
from each major account. It will also help ensure that you are getting
the other expected business results from the reallocated sales efforts.
Ongoing evaluation is critical for providing the management information
you need to steer your Major Account program effectively.
By recasting sales efforts as described, your company, in time, can experience
many of these expected business results and continue to farm your Major
Accounts to new heights.