In today’s video I’m going to share how you can hit your sales targets easier, by prospecting less. Sound crazy? It’s actually pretty simple.
You’re going to learn how to uncover the key accounts that will knock massive, sledge hammer sized holes in your sales target, rather than chipping away at it, with crappy small deals.
Targeting key accounts
So I get it, you’ve a sales target to hit and the sooner you hit it the better. Otherwise you’re prolonging the pain, the stress and the lack of a bonus.
With that said then, why do most sales professionals spend their days chasing their tails. They fire off hundreds of spammy emails and make dozens of random calls with no real system in place to make sure they’re likely to bag the bigger deals?
Is that what you’re doing?
The small deals will get you close to hitting target, the big ones blow the target to bits.
Additionally, do you know the likely size of the deal before you reach out to a potential partner so that you can prioritise your time accordingly? Or are you reaching out regardless, hoping to get something… anything closed?
Well if this is you, the solution is to start picking and choosing specific key accounts to go after rather than spraying and praying with your prospecting and that’s what we’re going to cover in this post.
Because if you can close just a couple of these key accounts a year, you’re likely to smash your sales target, no matter what the number is.
Defining key accounts
So first lets define our key account selling approach as –
A selling approach which offers strategic value to specific accounts, whilst distinguishing you from your competition.
So that begs the question, “what are strategic customers?” Let’s use an analogy of the people in your life to explain it. You probably have hundreds of acquaintances you’re happy to speak to every now and again. Perhaps you’re happy to help them out too if it’s a job that takes five minutes or less. But there are likely only a handful of individuals that you will drop whatever you’re doing to go and spend time with or help out. These are the strategic people in your life.
So in a business context, if you think of a pyramid, with your best few partners at the top, then the next layer down is bigger in number, but the partners offer you less value and you continue this downwards, this is how you should look at your accounts.
As you can see, even though there are far fewer of these “key” accounts, they drive more revenue than everyone else combined. Here we can see the value of focusing on the few, larger key accounts.
OK great, you know what key accounts are, but where can you find them?
Well everyone in your marketplace can be broken down into 4 types of accounts –
- Strategic Investment account – You have good relationships with and there is good potential for new business.
- Selective investment account – You have low or poor relationships but there is high potential for new business.
- Proactive maintenance account – You have great relationships but there is a low chance of growth.
- Avoid these bastards at all costs account – You have poor relationships and a low chance of winning new business.
If we put this on a chart with the potential revenue on one axis and then the current relationship with the account on another, it would look like this –
Here it’s clear that our targets for key accounts are the top two layers of the chart as that’s where the biggest potential upside is. We should be especially focused on the top right hand side as we already have relationships here and the potential upside is great. This means that we’ve the potential to build a powerful key account quicker here than anywhere else.
Can you think of any current partners where there’s massive room to expand? Or are there any potential partners in the market that you don’t have relationships with but could become huge accounts? These are what we’re going to focus on in this training.
Strategic investment account example
An example for of this from my medical device selling days would be a hospital that uses all of our endoscopic equipment in their 10 operating theatres, who has just been given £100 million to build out 30 new hospital operating rooms. This account can potentially 4x in size overnight and I’ve already the relationships in place to get a jump start on things. Additionally, at 40 operating rooms, this would be a large hospital for the UK and so it would be worth the medical device organisation backing me and perhaps providing additional services that there wouldn’t be the scale to offer elsewhere. This is when the relationship goes from a normal seller–partner relationship to a strategic one where both organisations are in bed with each other and are getting additional benefits on top of just a supplier providing products at a fair price.
Sound like a good place to be? It is! When you get these accounts in your crosshairs, you’ll be more focused, more productive and you’ll be able to prospect a few accounts and smash your target rather than prospecting many and missing it.
Building your key account list
For the rest of this training, we’re going run through a step-by-step process to put each of your potential key accounts into these different categories. This can also be added to a larger account or sales plan if you’re building one of those too.
As once you know where you should be spending your time and where you shouldn’t, you can make more strategic decisions about your day to day prospecting activities.
So, let’s run through the steps to classify your potential key accounts.
Step 1 – Identify potential accounts
If you have a CRM system, then you can potentially apply this selection criteria to your entire customer base. However for the purpose of this video I am going to suggest creating a list of 10 potential key accounts for you to focus on. I want you to be open-minded about the accounts that you include here, as it doesn’t matter at this stage if the account as a target or current partner.
Step 2 – Ranking
So next up, list your key accounts with the hottest prospect at the top and the lowest at the bottom in relation to potential revenue that could be generated.
This shouldn’t be a guesswork job. We need to uncover a variable that all of these accounts have in common, that relates to the potential profits we can generate. For example if you are selling management services to haulage companies, you could rank these businesses by how many trucks they own.
For me selling medical devices, it might be how many endoscopes the account currently has, or how many operating rooms they have.
Step 3 – Strengths
Next, we’re going to evaluate our strengths in each account relative to our most relevant competitor. Think about how you compare on price, deliverability, uniqueness of offering, additional business services you can provide and things like this.
Give yourself a score out of 5 verses the competition.
It is important to be objective when we are putting this together. We have to see our qualities as a supplier from the potential key accounts point of view rather than through our own rose tinted spectacles. For example, one of these accounts you’ve highlighted might be a high-growth company and so they need flexibility in delivery terms that you might not be able to offer. This could be a deal breaker for them and so this would reduce their ranking.
Step 4 – Hypothesis
Now we’ve actually built up some data, we can use start to make some hypothesis about the potential accounts we should and shouldn’t go after.
If you’d like to make this data visual, then you can plot the data from step two on the vertical axis of a graph and the data from step three on the horizontal axis. If you then split this up into the quadrants we’ve already discussed of –
- Strategic Investment account – You have good relationships with and there is potential for new business.
- Selective investment accounts – You have low or poor relationships but there is high potential for new business.
- Proactive maintenance accounts – You have great relationships but there is a low chance of growth.
- Avoid accounts – You have low relationships and a low chance of new business.
You’ll have a strong visual representation of where you should be spending your time that will look something like this –
The red spots are your hottest key account prospects, orange are your maybes and blue and purple are not worth prospecting.
At which point you’ve massively narrowed down your potential key accounts, you’ve dismissed all the crappy potential partners that you have no hope of ever closing and you can be far more productive with your time and energy.
Summary
So to quickly recap –
going after key accounts is important because whilst the small deals get you close to hitting target, it’s the big ones blow your sales targets to bits.
At Salesman.org we define the key account approach as –
A selling approach which offers strategic customer value to specific accounts, whilst distinguishing you from your competition.
OK great, you know what key accounts are, but where can I find them?
Well everyone in the marketplace that you could possibly sell your product into can be broken down into 4 types of account –
- Strategic Investment account – You have good relationships with and there is potential for new business.
- Selective investment accounts – You have low or poor relationships but there is high potential for new business.
- Proactive maintenance accounts – You have great relationships but there is a low chance of growth.
- Avoid these bastards at all costs accounts –You have low relationships and a low chance of new business.
You can visually rank your potential key accounts by –
- Step 1 – Identify potential accounts – Create a list of 10 potential key accounts and I be open-minded about the accounts that you include.
- Step 2 – Ranking – List your key accounts with the hottest prospect at the top and the lowest at the bottom in relation to potential revenue that could be generated.
- Step 3 – Strengths – Evaluate your strengths in each account relative to our most the relevant competitor. Give yourself a score out of 5 verses the competition.
- Step 4 – Hypothesis – Plot the data from step two on the vertical axis of a graph and the data from step three on the horizontal axis.
You’ll have a strong visual representation of where you should be spending your time that will look something like this –
The red spots are your hottest key account prospects, orange are your maybes and blue and purple are not worth prospecting.
Now you know where you should be spending your time prospecting!
