Contacting Key Sales Accounts -4 January 1, 2008Posted by David Dirks in Keeping Your Customers, Managing Sales Accounts, Sales Metrics.
Tags: account management, sales contact, Sales Metrics
“I haven’t seen or heard from my account executive in over a month”
“I’m not sure who handles my account there”
“The other company seems very interested in helping us”
And a few you never want to find yourself saying:
“I haven’t heard from them in a while”
“Oh, that account…it’s dead”
“When I have time, I’ll give them a call”
It never ceases to amaze (and disappoint) me how often businesses fail to maintain even an adequate level of contact with sales accounts vital to their business. Some wait until the phone rings. For others, it might only be an infrequent level of contact. Either way, it’s more hit or miss, than purposeful contact management.
The Big Dogz have made a science out of superior contact management. They don’t leave anything to chance and just wing it. The good news for you is that most businesses fall on their face when it comes to maintaining the right level of contact with a customer.
That should spell o-p-p-o-r-t-u-n-i-t-y to you.
How often should you follow up on any sales account you have? Many books have been written on this subject alone. In my opinion, there are two key considerations:
1. How frequently does the customer want to be contacted? Ask your customer directly. I’ve always made it a habit to ask that question and in almost all instances, the customer is very clear about how often they want me to contact them. If they want you to touch base with them once a month, then you’d better be sure and do it. Don’t ask this question if you don’t plan on following the answer.
2. What is the value of this account and how does it perform? If you’re a small business owner, you can’t be everywhere. You can’t visit all your customers with exactly the same frequency. So, you need to prioritize your customers in a way that allows you to maintain a level of contact that fits those customers needs.
There is no ‘formula’ for evaluating the performance of an account. But there are some things to think about.
First, you need to determine how you are going to measure ‘account performance’ in the first place. Account performance is defined as how a particular sales account provides inputs that meet your set business goals. Inputs are those things that contribute to the measurable success of your business. For example, some common inputs are sales volume, profitability, longevity, frequency of sales, and new business referrals. Let’s break these inputs down a little further.
Every customer that buys your products or services contributes to your sales goals. Some customers contribute more than others. What percentage of your business is from this sales account? How do they stack up against your other customers? However, sales volume alone is not a good way to prioritize customers. Which leads me to the next input.
Everybody loves large accounts. Big accounts naturally seem to demand more of your time. But are those large accounts profitable? It’s entirely possible (and often happens) that a large account provides great sales but contributes poorly to your profitability, or in the worse case, makes you lose money. I do NOT advocate dropping an account just because it’s marginally profitable. The right thing to do would be to figure out why it’s marginally profitable and fix it. I am saying that you need to understand what level of profitability (or loss) that account brings to the table.
Longevity is an interesting input. Are they a long time customer? What value do you place on a customer who stays with you rather than jump to the next competitor who offers to save them 5cents more? Or what about the new account that is buying a lot of product or services? You’re always going to have a range of customers with some new, some old. My point here is that longevity does count for something.
Frequency of sale is a measurement of how often they buy your goods or services. Once per year? Every other month? Every day? When you look at frequency of sale, you have to look at sales volume at the same time. Your customer may order only once per year but it might be the biggest order you get all year long. Keep frequency of sale in perspective with sales volume contribution.
New business referrals are another key metric. How many new customers have been referred directly from this customer? If you don’t expect your customers to refer new customers to you, you’d better think again. If your business is exceeding the expectations of your customers, you have every right to expect that they can and will help you find more customers. So, you might have a customer who doesn’t contribute as much to your sales volume but they refer a lot of business to you. They are worth their weight in gold. Even if they are unprofitable.
How much contact time should you spend on a customer? The answer is not easy as you can see. However, by asking the customer what frequency of contact they want and understanding their performance contribution to your business, you’ll be in a better position to prioritize them.