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How To Trim and Score Your Customer List

I heard a great quote recently; “If a salesperson is calling on more than 50 prospects and customers, that salesperson has a hunting license instead of an account list.”

It is unrealistic to think you can manage more than 50 accounts.  The only exception to this rule is if you are selling high end capital equipment that is purchased once every 20 to 30 years.  But, if you are making repetitive sales to the same customers over and over, you are kidding yourself to think you can manage more than 40 to 50 accounts.

After you slim down your customer list do some analysis and I’d wager that somewhere around 80 percent of your revenue comes from the top 20 percent of your account list.  Furthermore, those last few accounts that make up your top 20 percent of the revenue are substantially smaller than those at the top of your list.  Do some account review and balance your accounts with some new larger accounts.

Next, implement an RPM Customer Scorecard.  Yes, just like purchasing does with your suppliers, but they call it a Vendor Scorecard.  An RPM Customer Scorecard measures three critical components of a customer:

  1. Revenue.  What is the gross sales volume of each customer?  Those accounts at the top receive a value of 10 and those at the bottom get a score of 1.
  2. Profit.  This is a measurement of the percentage of revenue that goes to the bottom line.  The highest get a 10 and lowest get a 1.  Here’s a chance to work with your controller!  Controllers are pleasantly surprised when salespeople ask this question.
  3. Maintenance.  Here’s the fun measurement, sometimes called the nuisance factor.  Those dream customers that you enjoy working with, although demanding, are fair and when they need a favor you go out of your way to help them.  On the other end is the person’s name that makes you flinch every time you see it in your inbox.  They ask for discounts, shorter lead times and never say thank you.  You can guess who gets the 10 and who gets the 1.

Total up the scores.  A score of 25-30 represents a customer you want to make sure you have a plan to keep them as a customer.  A score of under 10 is a customer you should refer to a competitor.   With this scorecard in hand think about the creative conversations you can have with your customers, particularly at the time of a price increase.  With those customers scoring between 10 and 25 you can have great conversation reviewing the scorecard.

 

 

Salespeople Sell and . . .

As a young salesman many years ago, my sales manager caught me doing some project sketches. He interrupted me, looked me straight in the eye and said “Salespeople sell and engineers engineer. Do you call that selling?”

Repeated surveys over the years estimate that most salespeople spend about 30% of the available selling time in a day actually selling. The remainder of the day is spent on non-sales activity. Unnecessary meetings, responding to other department information requests and getting dragged into projects that have nothing to do with sales consume a lot of salespeople’s time on the daily basis.

Here are some scary statistics that the TAS group and SalesforceWork.com uncovered that should have you looking at where your salespeople are spending their selling time.

  • Two thirds of all salespeople DO NOT meet their sales quotas.
  • More than half of all salespeople have a closing ration under 40% on qualified opportunities.
  • Only 46% of salespeople feel their pipeline is accurate.

While there may be other reasons for these staggering findings, one easy point of attack is to find out how much time your salespeople are actually selling. A simple exercise is to have them log their time for a week. It is a real eye opener.

Next, as a sales manager, you can act as a filter for requests coming from other departments. If it takes time away from your salespeople selling and is not critical, postpone, reject or deflect such projects. Think of the increase in revenue if your salespeople were able to spend even 10% more time in front of customers.

When we look at key account selling, so much depends on salespeople developing strategies, meeting multiple contacts within the customer’s organization, staying in contact with multiple decision makers and maintaining a multi-level relationship.  That is a monumental task if you only devote 30% of your time to it

 

8 Steps to Effective Time Management in the C-Suite

Time and again people in leadership roles tell me how they simply cannot find the time to get all the things done in the time available (day, week, month, quarter, year, etc.). And what ultimately suffers the most is their personal/family life, which results in a sense of being stressed out.

So, with this in mind, I offer you what has worked for me for more than 30 years…

Frank’s Simple Time-Recovery Formula

  1. Make a list of all the things you personally do.
  2. Put a check mark next to those things that only you can do (you cannot delegate).
  3. All of the other things on the original list are things you can delegate to your direct reports. Go through the long list while considering which of the people that report to you are capable of taking on these tasks.
  4. Sit face-to-face, one at a time with your reports and explain that you are looking to add some growth opportunities to their current responsibilities. Be willing to explain this process you are using. Give them permission to challenge your assumptions and assure them you are not in any way trying to merely “dump your work” on to them.
  5. Coach each of them. What to do, how to do it, what your expectations are; such as quality of deliverable, time frame, reporting, tools available, etc.
  6. After a few coaching sessions to insure they have demonstrated mastery, let them know you will now “count on them” to be responsible for these specific tasks going forward.
  7. From this point forward, your role is to become their coach and mentor:
    • Measure performance of activities against agreed upon expectations.
    • Monitor behavior and attitude.
    • Mentor with personal growth and sense of fulfillment in mind.
  8. Set up a monthly reminder to go back to Step #1 and write down the new list of all the things you personally do. The reason for this is it is so easy to get “seduced” by these tasks you have done for years and start doing them again!

As you see this simple method working well for you, require your reports to use this same process with all of the people they provide leadership to.

You will be amazed at how you and your entire organization will become more productive.

Now this is leadership!