Key Objectives of a Key Account Sales Plan

The key objectives of a key account program are to retain your best customers, increase penetration within customers with whom your organization has only a small percentage of the potential business and to win over high-potential prospects.

Consider the following three points:

• A customer who generates a relatively large percentage of your organization’s business is, obviously, of great value. The business relationship must be nurtured, and every effort must be made to retain this customer.
  
  In addition, if this customer generates a large amount of revenue for your organization, then it’s almost a sure thing that your competitors are working hard to earn that business too! Thus the extra attention.
  
  
• A customer with whom your organization does a small or moderate amount of business, but who has the potential to become a much larger customer must be treated with extra diligence as well, as this customer is a good source of potential sales growth. Since it is typically easier to leverage a current, albeit smaller-scale, relationship than to start from scratch, the extra sales effort is justifiable.
  
  
• A prospective customer with high-potential – possibly one of your biggest competitor’s top ten customers – is worthy of a more focused and larger-scale sales effort. Therefore “payoff” for success in this area might be greater in terms of both sales dollars and competitive position, thus justifying the extra effort.

For more in-depth perspective and a list of action items to formulate your key account plan, please refer to this related article in our e-newsletter.

Contact Frequency

People often ask, "How many calls can we make on a prospect before going over the line?" Here are a few guidelines...

First, be consider research data indicating that approximately 80% of those involved in business development approach prospects two or three times and then give up.

Now, consider the importance of these National Sales Executive Association stats regarding the importance of following up:

• 2% of sales are made on the 1st contact
• 3% of sales are made on the 2nd contact
• 5% of sales are made on the 3rd contact
• 10% of sales are made on the 4th contact
• 80% of sales are made after the 5th contact

What these combined statistics tell us is, quite simply, 90% of new business is won by 20% of the sales people!

Next, consider the fact that sheer “frequency” does not guarantee success. Each contact must be “value-added” in order to properly impact your target prospects. This requires research, planning and good communication (probing & listening) skills.

Considering this information simultaneously, the best answer to the call frequency question is that we “cross the line” when our calls have no value for the prospect or customer.

What "Do" They Think?

What would you like your customers and colleagues to think and feel about you and your organization?

We have asked hundreds and hundreds of people this very question over the past ten years and, believe it or not, the answers are remarkably similar. But before we divulge what most people say, how would you answer the question?

If you'd like to give this some thought and, possibly, be surprised, then take a few minutes to jot down ten things you'd like others to think and feel about you and your organization. (More on this later...)

More Importantly...Driving Word-of-Mouth
Maybe of greater significance, how important is it? Many business owners and managers tell us it's very important; and if you agree, how will you impact or influence what others think and feel about you and your company?

This is, after all, the key driver of word-of-mouth advertising!

If you have made a list, we'll ask you now to review the list and answer one more question: Of the words on your list, how many can you actually say, with any degree of comfort, in a typical business conversation?

Surprise?
Now for what might be the surprise... after people have made their list of what they would like others to think about them and their oganizations, and how they would like to make others feel..., we then ask them the question posed in the previous paragraph - that is, "how many of these things can you actually say, with any degree of comfort, in a typcial conversation. Belive it or not, most people reply, "Not many..." *

While there may be many ways to affect what people think about us, the facts are that, when it comes to word-of-mouth, we can't buy it and we can't overtly talk about it or force it upon others; instead, it is a function of how we behave and communicate over time. So, consistent with the theme of our first article (above), having a strategic plan for impacting what others think might be a good idea after all...

* Click here to see the most-frequently given answers to the question, "What would you like customers and colleagues to think and feel about you and your organization?"

Growth Through Strategic Customer Service

There are many components to business development and many ways to grow revenue – and strategic customer service is definitely one of the often-overlooked pieces of the puzzle.

As we've suggested in previous posts, growing a business or sales territory is hard work, especially in more challenging economic times when referrals and leads are less plentiful, customers are spending less and the competition is tougher; and it is especially in times like these that the value of a customerbecomes most clear.

Assuming there are no extenuating circumstances such as a poor payment history, the simple rule is that we should do everything within our power to avoid losing a customer... and providing consistent, high-quality customer service is critically important to that end.

When asked, most people say they do their best to provide good customer service. However, the methods vary sigificantly and tend to be inconsistent. To maximize the effectiveness of your team's customer service effort, it's best to develop and implement a measurable, strategic approach that leverages your organization's unique benefits and that can become both consistent and cultural.

Simple & Strategic
Creating a plan, setting goals, enhancing communication and monitoring results are the key elements of the process. Here are some specific ideas on how you might get started:

• The first step is to learn three key things about your customers what they like, what they don't like and how they feel about your organization
  
• Next, identify your organization's unique offerings from a products and services perspective (what you offer/do) as well as a cultural perspective (how you offer/do it)
  
• Note the alignment between these first two items, and then determine the things associated with your culture and unique offerings that your customers value the most: the real benefits
  
• Develop a communication style that expresses these benefits in terms that are relevant to your customers (rather than to you and your staff)
  
• Define action steps that exemplify and reinforce your group's culture; keep in mind that in most cases an organization's most distinguishable assets are people
  
• Create and implement a system in which your organization consistently executes the action steps and communicates in the style noted above
  
• Monitor and measure results... continually discuss and refine the process; regularly include this topic on staff meeting and sales meeting agendas

Growing a business or sales territory is not easy work, but it will become easier if we can delightand retain our customers.

Possibly Matthew Tashjian, a Senior VP at Merrill Lynch in Hartford, CT sums it up best as he often says, "One way to make money is to not lose any!"

Common Challenges to Sales Growth

While there are proven methods for achieving sales growth (see previous post), there are still many challenges associated with increasing sales revenue.

Here's a list of common obstacles:

• Fewer available resources for attracting new customers or retaining current ones
  
• Shrinking customer base – even if we do an excellent job taking care of existing customers, over time our customer base will shrink! Like it or not, customer needs change; in addition, some of our customers will close or sell their businesses, and others will move to another region.
  
• Heightened competition
  
• Customer’s spending less
  
• Fewer referrals
  
• Longer buying cycles / more deliberate decision-making

Proactive Business Development: Activity v. Results

If you would like to grow your business or sales territory this year, try making a true commitment to the proactive components of your business development plan.

We all know that growing a business or sales territory is hard work, especially in more challenging economic times when referrals and leads are less plentiful, customers are spending less and the competition is tougher.

A good start is to create an annualized business development plan. But simply crafting the plan isn’t enough! We must commit to the plan as well as to the proactive components of the plan.

Honest Self Assessment
It’s important to realize that business development consists of both reactive and proactive elements. Running advertisements, updating a web site, posting blog entries, distributing newsletters or attending networking events might all be parts of the plan, but once these action steps are taken we often find ourselves in a reactive position – that is, waiting for someone to call.

These reactive action steps are the “easy” components of business development.

The more difficult aspects of business development include proactively working to make things happen. These activities include sending follow-up emails or letters suggesting next steps, leaving proactive voice-mail messages, making follow-up calls and scheduling meetings.

Research, pre-call planning and some imaginative thinking are also part of the mix, but the “hard” part of business development is staying the course. Statistics indicate that most things “happen” after someone (a seller) completes five or more contacts with a prospect. But most “sellers” make fewer than three approach calls – thus the challenge most of us face when trying to make things happen.

Setting goals and monitoring results are the best methods of ensuring success, and now is the time to get started for 2010.

• The first step is to identify the number of new customers or clients you’d like to add each month or each quarter
  
• Using a reverse funnel approach, the next step is to estimate the number of appointments, lunches or meetings you’ll need to conduct in order to achieve the new customer goal
  
• Step three is to determine the number of prospects you’ll need to contact (and how many times) in order to schedule the desired number of meetings
  
• Now the real work begins… make the calls and measure the results

If appointments or meetings seem hard to come by, then review your metrics as well as your message.

Growing a business or sales territory is not easy work. If you are able to achieve sufficient growth in a primarily reactive way – advertising, referrals, and so on – then you’re among the fortunate. For the rest of us, committing to proactive business development is the best approach.

Performance Management - Balancing the Rear-view Mirror

A strategically balanced performance management plan is a key component of effective sales management. The most successful approach not only enables sales managers to identify opportunities for team improvement based on analyzing past activities and results, but to also identify preemptive action steps and strategies that can impact future results.

Balancing the Rear View Mirror
Managers who place all or too much focus on analyzing past performance analytics and then initiating improvement plans after-the-fact miss the opportunity to salvage what otherwise might be a sub-standard month, quarter or trimester.

Circumstances and competitive offerings within the marketplace are constantly changing. While the practice of reviewing past performance and using the data as part of a performance improvement plan is necessary, this “rear-view-mirror” approach can be costly in terms of lost opportunities if it encompasses ones entire sales management approach.

While there are different ways to accomplish a more balanced approach or sales management system, here’s a well-tested example consisting of five key components:

1. Team meetings - for teambuilding and team motivation; best if scheduled regularly on a "same time same channel" basis. Must be well-planned with a group-level agenda
2. Individual strategy sessions - also scheduled regularly; based on your sales process and model, the same topics should be discussed each time, such as territory management plan, key-account plan, pipeline, activity plan, etc.
3. Field support & team selling - regularly scheduled with each Rep; an ideal opportunity to lead by example, build relationships with key customers (key in times of transition!), stay current on market conditions and gather data or input for your team and individual meeting agendas
4. Proactive "impromptu" interaction - similar to Hewlett Packard's well-known practice of MBWA (Management by Walking Around); can be done in a variety of ways, such as email, voice mail, telephone, face-to-face (at the water cooler...) depending upon your logisitc structure. These interactions must be made in a spirit of being "interested" or "supportive" rather than "I'm checking up on you..."
5. Proactive to-do list - on which each Rep has a slot every week, and the manager has a proactive reason to interact with each Rep based on issues of the day, plans made during strategy sessions or team selling days, etc.

Finally, an organizational system - either electronic or in three-ring-binder style for field-based managers - must be created and maintained in order to implement this system. For additional information, please refer to paulcharles.com.