Oh you of little faith. There is only one caveat to that statement and that is you have to work in a company that sells more than one product or put another way, your customers can buy an assortment of products from your company. If you have one product and that’s it then you would have to approach this process from a different angle.
This is so simple as to be maddening. It’s so simple that salespeople either don’t think of it or they don’t want to take the time to work through the exercise. Let’s say that you work for a company called Packaging Supplies Inc. You have a catalogue that is 2 inches thick and virtually any company on the planet can use products from that catalogue.
You have 7 salespeople covering a three state area. You have 500 customers, 100 of which represent 80% of the business. (Ah, that pesky little 80/20 rule again.) You were fooling around with numbers one night (don’t all sales managers do this?) and you realized that in only 20 of the 100 accounts do you have more then 40% of the business. In the other 80 accounts you have anything from 5% of the business to 25% of the business. All of which gets the wheels turning.
It is almost October 1st and you know that when the owner of your company gets back from his Canadian fishing trip his first priority will be to set revenue goals for 2009. What you know and he doesn’t is that the revenue goals are sitting in those 100 accounts.
The reason? Salespeople are not supremely well organized when it comes to selling deep into their accounts. If an account is worth $100K if you had all the business and you only have 30% of the business why not try to get all of it? Good question. Obviously, it’s not always possible to convert an account to all your products but it is possible to expand the amount of business you have. And that is where next year’s quota comes in. If I had 7 salespeople with a large number of accounts where they could expand business in many of them, then that is where I want to grow the business and more than likely that is where the majority of next years growth will come from.
The Final Thought: “Wisdom is not a product of schooling but of the lifelong attempt to acquire it” Albert Einstein