Fish where the big fish are! Go for the 80/20! Don’t mess around with the small end of town – spend your time at the big end of town. All laudable exhortations. As a fledgling Sales Exec decades ago, I heard them all. You probably did too, huh? Calls to arms like this aren’t good enough for sustained competitive advantage in field targeting of the customer base and prospect pool.
Calculate the cost of a visit in your sales organisation. Do it properly. Load up the full cost of the Sales Team with direct Sales Management PLUS the cost to directly serve the same customers by any other functionary beyond the Sales Execs. You might be (unpleasantly) surprised. Our studies show that the cost-of-visit across a wide range of B2B environs can run into several hundreds of dollars. Ouch!
The first critical success factor was outlined in one of our recent newsletters …………getting your value chain structure and sales strategy right. Being able to defensibly state who are your customers and exactly why. Then you need a means by which to compare every customer on your base on an even playing field …………from your biggest goliath all the way down to your tiniest rats and mice. The comparison needs to be fundamentally underpinned by quantified “current value” (CV) and “potential value” (PV).
The definitions will vary between different sales organisations, but essentially will feature actual sales/margin contribution over the most recent 12 month period (CV) and a same-period assessment of each customer’s total spend (sales/margin) in the category of interest in which your organisation competes (PV). From here, you can set up a scatterplot (CV = vertical axis; PV = horizontal axis). The scatterplot is a very good and proven mechanism for optimising the principles of superior classification system establishment.
The outcomes of an approach like this will clearly and mathematically define your loyal customers (moderate-high CV from low-moderate PV, i.e. those where you enjoy high share of wallet); your cultivate customers (low-moderate CV from moderate-high PV, i.e. those big fish where you suffer low share of wallet); your stars (moderate-high CV from moderate-high PV). The scatterplot will also help you identify your “small end of town” (i.e. those producing low CV with low PV), and will also help you scientifically set a PV benchmark for prospect profiling.
Glenn Guilfoyle is the Founder and Principal of The Next Level, a specialist B2B sales consultancy. For more insights like this, check out The Next Level’s proven sales process.
