A client asks "My company's sales are flat
this year
versus last. I belong to an executive round
table group for company Presidents and feel
fortunate compared to what some of my
colleagues are experiencing due to the
current economic conditions. Coming into the
last business quarter of the year, is there
anything I or anyone else at my company can
do to help the salespeople have the best
sales year possible?"
There are many, many different actions to
take with regard to helping the sales
representatives. One of the most effective
is to work closely with them to increase
business in their largest accounts.
The "80/20" rule that applies to most
businesses applies to most sales
representative's territories as well. In
other words, most companies find that 80% of
their business (or some other larger
percentage) comes from 20% of their customers
(or some other small percentage). A handful
of accounts are often responsible for the
majority of the
sales revenue from a geographic or vertical
territory.
Let's say that the salesperson has a
territory worth 2 million dollars and that
the breakdown of major accounts versus all
other accounts is as follows:
| Type |
Territory Production |
Number of Accounts |
Average Account Size |
| Major Accounts |
$1,600,000 |
4 |
$400,000 |
All Other Accounts |
$400,000 |
16 |
$25,000 |
A 5% increase from one of the largest
accounts ($400,000* 5% = $20,000) will bring
in an additional $20,000. A salesperson
would have to get a 5% increase from every
single one of their 16 smaller accounts
($400,000 * 5% = $20,000) to improve sales by
that same $20,000. This is not the most
realistic year-end goal, especially in
challenging economic times.
Run a Report; Review the Numbers
To begin, get an updated look at how the top
accounts are performing (1) year-to-date
through Q3 of this year versus year-to-date
Q3 of last
year, and (2) year-to-date through Q3 this
year versus total sales revenue all of last
year. If your
company sells multiple products or services,
have those broken out in the report so you
and the sales representative can see how much
each customer is purchasing in each category.
Once this report is complete, meet with the
sales representative and look at each top
account in depth. Ask a lot of questions and
get their input as to why the account is
underperforming (or ahead for the year as the
case may be). Refrain from criticism or
blame. This is a strategy session, not an
annual review.
Meet with the Accounts
Either in person or by conference call,
participate in a meeting with each
salesperson's largest accounts. Learn about
how their business is doing this year. Ask
about how recent economic trends are impacting
them (if at all). Agree to look into any
issues that they may be having with your
organization and set-up a time to get back
with them about a potential resolution.
Whether their business with you is up, down,
or flat for the year ask them what it would
take for them to increase their with you.
Interestingly, salespeople often avoid asking
this question of accounts whose business is
way up or way down for the year. If it's way
up, they are afraid to jeopardize the
momentum or appear greedy. If it's way down
they sometimes give up and assume there is no
hope.
Thank them for their time as well as their
candor, and then consider any thoughts they
may have voiced on what would entice them to
increase their purchases with your organization.
Customize Incentives
Many companies come up with year-end
incentives for their customers and are often
disappointed when the participation level is
low. One of the reasons for the lack of
interest is that the year-end offer appeals
to only a certain group of customers. It
simply doesn't interest or help a lot of your
company's other customers.
After analyzing the year-to-date report,
talking with your sales representatives, and
considering customer comments during the
meetings you had with them, create some
customized incentives that would appeal to
each customer based on their individual
needs - those whose business is up for the year
and those whose business is down. Perhaps
several different incentives could be created
and the customer could choose which one
appeals to them the most. In this way you
are truly engaging your most valued clients.
Many sales organizations try and reach out to
all their customers during the last quarter
of the year - and that's fine. But the real
pay-off comes in putting the bulk of your
efforts into the major accounts. Don't wait
until the end of the year to run a report on
the top accounts. It's too late, and it will
hold some unpleasant surprises. Furthermore,
incentives offered at the midnight hour can
take on an air of desperation. Run the
report now and then work with your top
customers to find out what would motivate
them to buy more between now and the end of
the year.