Prioritizing Accounts
by Dave Kahle
Q. I’ve heard you mention several times the importance of prioritizing and targeting customers. Can you shed some more light on this?
A. This is a key issue with 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 is squandered on customers who aren’t worth the investment. If I can help sales people 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 who could buy the most next year, not one who did last year.
1. 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 who 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 sales person 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 sales person 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.
2. Once you’ve created the criteria and definitions, train the entire group in the use of those concepts. Require that, by a certain date, they have analyzed and rated all of their customers. You may even develop some forms, electronic or hard copy, which everyone uses.
This process can also be an eye opener all by itself. When you help sales people analyze the potential in their accounts, and then examine their accounts from that perspective, you (and they) will be amazed at how much time is spent in accounts that just aren’t worth it.
3. Now, legislate that everyone should spend the biggest portion of their time with the A accounts. My rule is 50% of your time with the A accounts, and 50% of your time with everyone else.
4. Manage the implementation. Every time you ride with a sales person, discuss it and look for evidence that indicates the sales person is following through on using the system. Make it an issue in sales meetings and in evaluations.
When sales people actually spent more time in those accounts with greater potential and less time in those with little potential, they discover a dramatic improvement in their productivity.
I have developed a variety of resources to help you with this. The system is described in detail in Chapter Six of my book, 11 Secrets of Time Management for Salespeople. It’s also dealt with in the time management addendum to How to Excel at Distributor Sales. If you are looking for a training class, consider the Kahle Way B2B Selling System Course in The Sales Resource Center.
The reason I have so much material on this subject is that I believe that it is one of the key behaviors for sales success. Everyone should be using it.
Dave Kahle is one of the world’s leading sales authorities. He’s written 10 books, presented in 47 states and 10 countries, and has helped enrich tens of thousands of sales people and transform hundreds of sales organizations. You may contact Dave at 800-331-1287, or dave@davekahle.com.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
