Just in Time for Budget Season
A Proven Path to Drive Double Digit Growth!
How would you like to grow your sales by 20% or more next year without significantly impacting your costs or staffing?
The fall months will quickly roll into budget seasons for 2018. For most companies, the demands on sales for next year will look very much like they did this year. Specifically, grow sales while controlling costs.
Sales leadership will look in all the familiar places to drive the number - new logos, new markets, additional sales people, better marketing, better management of the CRM’s and a host of other tried and true strategies.
All too often as I have worked with companies that are challenged to “move the needle geometrically” on sales, one of the key solutions that can drive a good part of the growth is close by and either under leveraged or totally ignored.
The answer is, YOUR CURRENT CUSTOMERS!
Let’s review a sales meeting that I recently attended.
The SVP of Sales flashed a top 25 customer list on the screen providing the following information: Customer name, number of years of the relationship, Customer Division (s) with which they were doing business, Products or Services provided, three-year billing history and next year’s projected billing.
The list told a familiar story. The Top 25 customers consisted of an impressive list of Fortune 500 and Fortune 1000 companies. Billing dollars from top to bottom on the list were mid 7 to low 8 figures. Billings had been steady to growing incrementally in each year as was the forecast.
The list screamed a very clear message to me. “WE DO A LITTLE BIT OF BUSINESS WITH A LOT OF GREAT COMPANIES.”
A closer look revealed the following:
Although the company featured seven distinct and highly robust services and product offerings, 75% of the existing client’s were buying one product or service only and 25% were buying two services. An overlay of the company’s offerings to the purchasing requirements of their customers showed that in addition to what they were spending with the company, the customers were buying anywhere from four to as many as all seven of the other offered services from someone else! Simply put, this company had a low single digit market share with their largest and best customers! Additionally, there was no formal strategy in place to grow the business base with those customers.
I have seen this scenario played out in many companies in multiple industries and verticals. Three questions come to mind. How does this happen? What can I do about it? Why does it matter?
Let’s talk first about why developing a strategy to maximize new business opportunities with existing customers matters:
Sell cycles are shorter with existing customers – The fact that you are a current provider allows you to skip or drastically shorten the “this is who we are and this is what we do” of the sell cycle even if you are crossing divisions with different decision makers. Your performance record provides instant credibility. Your existing contacts and relationships will facilitate introductions to key decision makers and stake holders.
New business is more profitable with existing customers – You know each other! Therefore, costly start up or transition issues can be greatly reduced or eliminated. Existing service and support resources already in place can be used more effectively.
How did we wind up with such a small market share with our best customers?
Look closely at how you manage your sales reps – I often hear that “the sales rep has total control of Mammoth Company. He cracked the account and has the relationship. We stay out of his way.”
The sales rep has done a great job in cracking the account. He is incented to sell the products and services that he knows to the decision makers with whom he has connected. It is often not his job to look across the customer landscape for other opportunities which might generate a broader approach to the customer. As long as he is making his numbers and making money not only will he not look to “rock the boat” by expanding his scope, in order to protect “his” business he may actively campaign against it.
Management does not know enough about the potential of its customers – Do you have a clear understanding of all of the products and services that your client buys that pertain to you, how much they spend, current suppliers, contract lengths and decision makers across all divisions and departments? Knowledge is power. If you don’t have a current, detailed database outlining all of the above for each of your customers, you can be sure that you are missing substantial, profitable opportunities.
What do I do about it?
The company must own their customers – Each customer is a company asset. Like any other asset, it is the responsibility of Executive and Sales Management to insure that the asset is being leveraged to the fullest. In this case, it means that there must be a thorough understanding of the new business opportunities that the customer may offer and a plan to maximize the client’s potential. When was the last time your senior, non-sales executives visited your top accounts?
Sales and sales management must be accountable – Sales management and the sales executive must be drivers in this process. It is worth noting that the sales rep that “cracked” the Mammoth Company account may not look kindly on management getting into the mix on “his account." This needs to be properly managed by insuring that the rep has a lead role in the campaign to expand the company’s relationship with this customer. This is accomplished by showing the rep how it will benefit him financially and professionally. Importantly he must understand now that the size and scope of the opportunities presented by Mammoth Company are known , multiple leaders inside the organization will be accountable for developing and executing a growth plan for this company, including him.
Knowledge is power – leverage your CRM – Every account requires detailed information on all related services that the customer buys across all divisions and product lines. Decision makers and division interdependencies must be identified. Special attention should be given to identify services that your company is not currently producing.
Develop a Share of Wallet (SOW) plan and S.W.O.T. Analysis for Major Accounts – Target the services that you are not producing and develop a comprehensive value proposition for the customer highlighting the benefits of giving your company additional business across multiple service lines and divisions. Typical benefits can include but are not limited to, operational and administrative control enhancement, financial benefits from consolidating volume etc. Your Strengths, Weaknesses, Opportunities and Threats for each major account relationship need to be identified and analyzed.
Disrupt your sales and account management strategy – As you look to expand your relationship with the customer across products, departments and divisions, your sales and account management strategy has to expand as well. Recognize that additional product SME’s, finance, operations, sales people, marketing and importantly, senior management, will likely be required to best leverage your company’s capabilities and benefits into a solution that will resonate with the client. If they do not already exist, C level relationships between the two companies will need to be established as you must get to the top if you are looking to leverage your services across multiple divisions within your target company - think COO, CFO, CMO or CEO.
There is no better return on your investment in a growth strategy than insuring you have a comprehensive, executable Share of Wallet program in place for your most valuable assets … your existing customers!