Give the most attention to your biggest accounts? |
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Mid-sized accounts, on the other hand, may occupy a space where the competition for their business is not so intense, and where higher margins are possible, and therefore offer greater potential for profitable business. Smart companies now are no longer ‘performing unnatural acts’ for clients just because of the size of the account. Instead, they’re looking at potential, profitability, and the ability to lock in revenue stream – and they’re discovering that their most valuable accounts, in terms of lifetime value, are not necessarily their largest accounts.” There are two strategic questions here: First, how does an organisation deploy its most talented resources? Traditionally, top-performing sales reps have been assigned to the largest accounts. As we’ve seen, this may be a mistake. Second, most territory reps have a range of accounts: how can they best invest their time and energy? Sales managers often teach their people the “80/20” rule: 80 percent of the profit comes from 20 percent of your accounts. That can be a good rule of thumb, provided you don’t confuse large accounts with profitable accounts. How Major Sales are Really Made:
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As recently as ten years ago, the biggest accounts tended to be the most profitable accounts. And the more attention they were given, the more profitable they were likely to be. However, we now live in an age where the old rules no longer apply. The most profitable accounts now may very well be the middle-sized accounts. “In fact,” says Neil, “your largest accounts may turn out to be a pain in the neck, requiring a lot of resources and squeezing you so hard on margins that you end up with razor-thin profits.