One of my customers derives 50 percent of its revenues from nine accounts. The other half comes from about 30 accounts. Yet, until recently, their salespeople lacked any meaningful plans for how to sustain those revenues and further penetrate the accounts that have significant potential.
In today’s hyper-competitive market you can imagine what a threat this poses to a company’s existence. Having well thought-out plans for your top accounts is even more important during times when new customer acquisition is tougher and very expensive to come by. So how do you develop the right approach for generating more revenue from your key accounts?
Here are seven tips for building a solid key account plan:
- Establish clear revenue goals for the account. Split your territory revenue target between existing key accounts and new accounts. If you’re a key account rep, you’ll probably want to achieve your quota from your existing key accounts. Based on historical growth and account potential for the year, establish a revenue target for each account. Should you be reasonable or challenging? You can be both by establishing “count on,” “most likely” and “optimistic” targets. I recommend adjusting these targets during the year.
- Know thy funnel. Salespeople may have heard the term “sales funnel,” but they often don’t know what it looks like. What shape is it? Short, long, wide, narrow? This tells you a lot, for example, about the velocity of your deals through the funnel. What’s the total dollar value of the sales opportunities in the funnel? If you use a sales process, at what stage of the process do these opportunities occur? At the least, knowing what’s in the funnel tells you whether you can take a vacation or not.
- Know your share of the wallet. How much of the pie do you have already? If your key account is giving you 70 percent of the total they spend on your type of products and services, you’ll have a hard time growing that much more. But it’s a different story when you have only 30 percent and the remainder is split between two competitors.
By knowing the facts, you can decide how many resources (and what type) to apply to the account. It also helps you develop the right strategies and approaches. If you already have a major share of the wallet, you’ll want to develop “maintenance” strategies and plans, and “growth” strategies if you don’t. Each strategy type demands that you establish appropriate goals and tactics for deploying that strategy effectively. These goals and tactics constitute your road map to success.
- Understand the account’s key strategies and initiatives. Your customer is in business to make money, and they’ll do business with those suppliers that can help them achieve that goal. If you want to be part of that enterprise, you need to be very knowledgeable about their key strategies and prioritized initiatives (at least for the current and upcoming year). This will help you show how your products and services can add value by assisting them with their initiatives, thereby impacting the deployment of their strategies.
- Identify SWOT (theirs, yours and your competitors). What are the Strengths, Weaknesses, Opportunities and Threats? After you’ve clearly identified these, you’ll want to compare and contrast to determine where you can help your customer, leverage your strengths, and take advantage of your competitor’s weaknesses. Knowing this helps you establish the right strategies and the right goals for winning more business by adding value in the right places.
- Develop your value propositions. For one of my customers, the primary selling contact is a VP of R&D. During a recent planning session, it turned out that the VP of Marketing has a significant influence on their key accounts. But these sales reps aren’t comfortable talking with this person.
One step for increasing your comfort level in such a situation is to better understand the customer’s key success factors. What do they worry about? What do they need to do well so that they make their objectives and their bonus? Determine what it is about your company’s capabilities that will appeal to them. Based on this, you can develop the appropriate value propositions and begin a productive dialogue.Depending on the account, you may need to develop value propositions for each key contact. In this way you go from being viewed as a supplier to being seen as a value-added partner.
- Follow MGOSPA. Accomplish the Mission, by attaining the Goals, achieving the Objectives, executing the Strategy, implementing the Plans, and completing the Activities. If you’ve followed the previous six tips, you should be ready to:
- Define your mission in the account. What’s the ultimate philosophical purpose for developing the account? What’s going to get you up in the morning and help you to enjoy pursuing your next steps in this account?
- Establish the goals to help you get to your mission. What are you going to accomplish over the next 12-24 months?
- Establish the objectives for each goal. Are they specific, measurable, achievable, realistic, and time bound?
- Develop the right strategies. How are you going to achieve each objective?
- Formulate the plans. What programs and activities are needed?
- Complete the activities. What resources do you need, who’s going to do what, by when?
As Dwight D. Eisenhower once said: “Plans are nothing. Planning is everything.”
Anup Mody is president of The 3C Group, a sales consulting firm based in Wilton, Connecticut. He is also a partner in PERFORMAX Technologies, Inc., a sales and marketing effectiveness company whose methodologies were used as the basis of this article.