Boston Business Journal, November 6, 2004

To drive 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 you.

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 and measure

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.

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