| Ask the Sales Doctor |
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| This is a weekly column transcribed from my Radio Show. "Ask the Sales Doctor" is the segment of the show in which I answer questions sent in by listeners. Send in your questions by mail, email, fax or phone. If I pick yours to be "Question of the Week", you'll win an autographed copy of my best-selling book, The Six Steps to Excellence in Selling. |
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| Prioritizing Sales Accounts |
Melanie from Dallas, Texas writes:
"Warren, I have inherited a client base of over 300 accounts in the medical field. I work for a large pharmaceutical company. I can really only service effectively my top 50, and I'm thinking about prioritizing based on last year's revenue. What do you think?"
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Warren answers:
 Well, Melanie, thanks for that question. Congratulations, by the way, on inheriting a client base or a territory that has 300 accounts. A lot of people who start out in sales or are coming into a new territory are finding themselves in either a no business situation where they have to start from scratch, or a territory where they need 50 or 60 or 80 accounts to survive, and they're given 10 or 20. So you are in absolutely the catbird seat if you've got an account base of 300, and your challenge is to whittle it down to those top 50 or 60. I'm just thrilled that you're in that position. I hope you feel the same way.
It's a very interesting question, though. I don't say that I would prioritize those accounts based only on revenue. I think if you do it that way, you might be missing the boat. I'm happy that you wrote in with that question because actually, in my live seminars this question comes up pretty often. So I want to share with you the information I share with my clients in seminars and workshops.
I look at my client base in terms of A, B, and C. A is the absolute top 10% of my client base. I'm going to tell you in a few minutes how I define that. The B accounts are the next 20%, so my A and B books, so to speak, represent 30% of my overall accounts, in your case, about 90 accounts. And then 70% is the C book, or the rest of the accounts, in your case about 210 of those 300 accounts.
From a time standpoint, Melanie, what I want you to do, and I suggest this to all my clients, is that you spend 50% of your time with that A group of clients. In your case, carve out half of your time to spend with those top 30. Then spend 30% of your time with the next 20%, so that would be spending 30% of your time with the next 60 accounts.
Now what you see is the 80-30 rule. You're spending 80% of your time with 30% of your client base. Then the balance of your time, the 20%, would be spent with the other 70%. That would be the 20-70 rule. You might say why spend any time at all with the C accounts. It's because you are farming those for tomorrow or next year's A and/or B accounts.
Now to your real question, you want to know what I think about prioritizing the accounts based on last year's revenue. I think you should rate your client base in a number of different areas. I'll give you my own experience as far as how I rate my client base.
I pick five criteria in my consulting practice. The first criterion is actual or potential revenue. I have a scale that determines if that client is a one, two, three, four, or five. Five is the best score; one is the worst score. What I'm getting at is that I rank in terms of one to five based on actual or potential revenue.
The second category I look at is profitability. You can have great revenue, but if you're not making any money on that account, then it's really not as valued as you think it is. So I rate that particular aspect on a scale of one to five as well.
The next category I use is what I call loyalty. Is this going to be a transactional thing, where I just get one large order and that's it? Or is this something that's going to develop into a long-term relationship. Obviously in your field, I would imagine that you're calling on the same medical doctors and physicians and clinics and hospitals. They're not just going to buy a whole batch of pharmaceuticals from you once and never come back. So maybe that's not as important an issue in your business. I'm just showing you by my own example what those criteria are that I use. Anyway, the third one that I measure is loyalty on a scale of one to five.
Then I measure referral opportunity. In other words, once I get to know this customer, is there a way for them to refer me? In your case this would be to other physicians, to other clinics, to different hospitals. In my case I look for intra-company referrals in big companies into different divisions or geographically into other companies that they know of that I don't.
The final thing is people really are involved in branding and name recognition, so I look at my client base and ask if this is a leader in the field, are they an opinion leader, is it good name recognition. So if I aimed my efforts into developing this into an A account, and other people said whom do you work with, would that be a great account to be able to mention by name. It's what I call name recognition, and that's my fifth criterion.
What you can see if you use my system, there's a total potential of 25 points. Anybody in my view who's got 20 or more points is an A. Any account that has 15-20 points is a B. Everybody else who is below that is a C. I try to focus my energy on the A's and the B's.
Melanie, I really appreciate the email.
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– Warren
Wechsler |
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