Q: I’ve heard you mention several times the importance of prioritizing and targeting customers. Can you shed some more light on this?
A:Prioritizing accounts is a key issue for me, as I believe it is one of the ways to make the biggest, most rapid change in your results. Too much good quality sales time and talent are squandered on customers who aren’t
worth the investment. If I can help salespeople adjust their investment in time so that they are spending more time on the high potential and less time on others, they’ll see an almost immediate improvement in results.
So, over years of trial and error, I have developed a simple but incredibly powerful system for prioritizing and targeting accounts. While I don’t have space here to describe the whole system, I can suggest several things you can do to institute this practice in your sales team’s routines.
First, you’ll need to make sure everyone understands the difference between ‘potential’ and ‘history.’ Too many sales teams prioritize their time on the basis of history. In other words, “A” accounts are those who spent the most last year. In today’s rapidly changing economy, I don’t think it’s wise to make
decisions based on the past. A more powerful and useful concept is to make decisions based on the future. So, a high-potential account is one that could buy the most next year, not one that did last year.
1. Define How You Are Prioritizing Accounts
Set up some company-wide definitions. Everyone should understand what an “A” account is. Likewise for B and C accounts. In addition, there ought to be some standards for how you define each of these. For example, you might say an A account is one that could buy $1,000,000 of your stuff each year. OK, how do you determine that an account could buy $1,000,000? Does the salesperson guess? Or do you use some more sophisticated means of coming to that number?
In our system, we account for two variables within each customer. First, what is the QPC of each account? QPC stands for Quantified Purchasing Capacity, and is the answer to this question: If this account bought everything they could from me in the next 12 months, how much would that
be?
After having worked, personally and contractually with over 329 individual companies, I am continually amazed at how few (less than a handful) actually collect that information. Doesn’t it seem like an elementary thing that every salesperson should be collecting?
The second variable is “partnerability” which is the measurement of a number of subjective variables, all having to do with the likelihood that this account will develop into a significant, committed customer sometime in the future.
With those two variables in hand, we can rank every prospect and every customer by their potential. Addressing these issues is the first step, and can often set off light bulbs in the salesperson’s heads all by themselves.
