Question: Our “A” customers do 90% of our business. How much time or effort would you put into your “B” customers to bring them up to “A” customers?
Answer: This is the kind of question I field in almost every one of my seminars. The answer is a little more complex than the questioner may have in mind.
First, let’s make sure we’re using the same language. There are two common ways of classifying accounts. One way, which is what the questioner is using, is to classify by the total volume of sales and/or gross profits. Thus, an A customer is someone who bought more than a B customer. The other way, which I believe is more effective for sales people, is to classify the customer based on potential. Thus, an A customer has the potential to buy more than a B customer, regardless of what they have actually purchased.
In the first, the focus is on history and the past. As soon as a sale is made, it becomes history – an event which has occurred. Thus to classify accounts by the volume of business is to look at your customers historically. While there are uses for this system, it’s not a good way to determine the best investment of a sales person’s time.
It assumes a view of the sales person’s job as primarily taking care of current business, not necessarily investing in the growth of future business. Thus, the more the customer buys, the more time you should spend with them. Followed to its logical conclusion, eventually the sales person ceases to be a sales person, and becomes a mobile customer service representative – spending all his time taking care of current business.
I believe sales people should be sales people. They should focus on growing the business, not necessarily just taking care of existing business. So, I recommend the second classification system: Classify your accounts according to the potential for future business. In that system, it’s possible that an A account has never bought anything from you.
In order to do that, you need to collect some fairly detailed information about each of your accounts. For example, you‘ll need to answer this question: “If this account bought everything they could from me over the next 12 months, how much would that be?”
The answer to that question is what I call QPC (Quantified Purchasing Capacity) and it is the objective measurement of an account’s potential.
But that is only half of the equation. You’ll also need to collect subjective observations about the account, and compile those into a criteria that I call “Partnerability.” Combined, those two measurements amply describe the account’s potential and allow you to rate every account into one of three categories, A, B, or C.
By the way, this whole system is described in detail in Chapter Five of my book , 11 Secrets of Time Management for Salespeople. It’s a bedrock discipline of my Kahle Way B2B Selling System, and a part of almost every seminar I present.
Having established that, let’s go back to the reader’s question: How should you invest your time?
If you classify your accounts by history, then you need to further divide each class into two sub-classes: Growth and Management. Thus, if you have an account in which you have all the business, it is a “management” account. If, however, there is room for more business, it is “growth” account.
If you have an A or B account in which you have all the business, then work to reduce the time and effort you put into that account. Facilitate relationships with your customer service people, with your operations and inside people and try to remove yourself as much as possible from interactions with the account. The selling is done, now it is just a matter of servicing them to keep them happy.
If you have an A or B account which has lot of room to grow, then invest heavily, as this will likely be the best investment of your time.
The issue is not how much they are currently buying from you, the issue is how much more they could be buying from you — unless, of course, your job is to be a mobile customer service rep and not really a sales person.
Which brings us to the place I recommend for every sales person. Classify your customers according to their potential for future business. Create three classes: A, B and C. Spend half of your time with the A’s and the other half of your time with everyone else.
Making this change in how you view your customers is one of the single most powerful things you can do. By investing your time in those accounts that have the most potential, you can reasonably expect to double or triple your business in two or three years.