Sales Management Tips
by Suzanne Paling, Sales Management Services

September 2008

Path to Q4 Success
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.

  • Though my clients come from many different industries, the challenges they face are similar. In "Sales Management Tips," I regularly answer questions that have been posed to me by my clients. I hope the answers will help you to solve some of the sales dilemmas you face in your own sales organizations. If you would like to ask a question, please contact me. The identity and affiliation of those submitting questions will be kept confidential.

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