Adapted from Sell Better: How to Create a Sales System to Grow Your Business by Dave Kahle
Whereas acquiring a customer typically requires an investment, the “creating a client” process is generally where you re-coop the investment and start to make your sales system profitable.
Again, it is typical of most selling organizations to delegate this process to the sales force. This is where most sales people spend most of their time. Unlike acquiring a customer, which may not happen at all if it’s entirely delegated to the sales force, because this process is easier and more lucrative, it’s likely happening every day in your organization.
So, this issue isn’t making it happen, the issue here is doing it well. Alas, most sales people don’t do it well, and most sales organizations don’t manage it well.
Here’s a typical scenario. The sales person inherits a set of customers, and dutifully makes the rounds. Over time, he/she is naturally drawn to some customers with whom he feels some natural affinity. They get along. Those customers like him. So, he naturally spends more time with them. Sounds reasonable.
The problem is that the determinant of the sales person’s time is the sales persons’ feelings and comfort zones. These are not the most effective basis on which to determine the application of your assets – the sales person’s efforts.
For 25 years I have been proclaiming the wisdom of measuring the potential of each customer, classifying customers into priority groups based on that potential, and then directing the sales force to spend the most time on the highest potential.
Whose responsibility is this?
What seems so simple and straight forward really takes a concerted organizational effort to make happen. Most organizations are miles away from making this process happen systematically. For example, I have personally and contractually worked with over 349 separate organizations. I have only once come into a business and discovered they already had a requirement that the sales people collect information on a customer’s potential, and a system in place to record and use that information. One out of 349.
If you understand that the definition of a client (that’s the process we’re talking about here) is a customer who buys routinely, and that the key to doing this well is to expand the business with those customers who are worth the time and effort, doesn’t it make sense that we have some way to measure when that has happened?
It’s not just measured by the volume of sales dollars coming out of an account. They could just be buying more of the same thing, which only meets the minimum definition of expanding the business. A higher value definition would be to measure the increase in the number of items (skus) purchased in the key accounts. The measurement of the success of this process would be reflected in the breadth of products or services the key customers bought.
So, in other words, if you sell cutting tools and abrasives to manufacturers, and one customer buys more of a particular cutting tool from you because he has a new contract that requires more use of it, that’s good. But it’s better when he buys more than one cutting tool, and your abrasives as well. That means that you are expanding the business, becoming more important to that account, and wringing more value out of that asset. Doesn’t that seem like common sense, basic stuff?
In my 25 years of working, personally and contractually with over 349 different companies, I have never yet come into an organization and found that they were measuring the increase in the number of items purchased in their key accounts. In other words, few companies think to measure it.
Once again, as in the first key process, to implement you follow the same steps.
- Understand the process.
- Describe it for your business. What specifically does it look like?
- Create some measurements for success. If you have successfully expanded the business with a customer, creating a valuable client, how do you know that?
- Create a goal for better performance in this process.
- Ask, ‘What is the best way(s) to do this?”
- Then, measure and manage this process.