Lesson 1
If you are really into B2B then you will know all of your customers quite well because they have been ordering with you for a while and they should continue to order with you for quite a while longer. The reality is that many salespeople, for whatever reason, not only dislike administrative tasks like database maintenance, but they also view their customers as their customers, not as businesses.
Point of action
Make sure your company keeps an up-to-date record of the most important decision makers and key influencers. If necessary, give the database a non-threatening title, such as the Christmas Card List.
Cost: £ zero
Lesson 2
Who are your most important customers? Are they the customers who spend the most with you? Are they the ones who give you the highest margin or the highest profit? Or is it the organizations you currently do business with but could do a lot more?
Point of action
Make it clear to sales teams exactly what kinds of customers are important, what kind of mix is required, and why. You may need large accounts to pay overhead, high-margin accounts to contribute to earnings, and potential growth accounts to accommodate the growth plans you have. Not to mention the inevitable loss of customers. Once this is done, the Director of Sales can manage how time, effort and resources are spent, making sure they are in line with their plans.
Cost: £ zero
Lesson 3
We all need to sell more to stay put due to the nature of customer churn. When we are pressured to produce Growth Plans, we must always keep in mind the “risk hierarchy” map. This hierarchy is divided into three stages.
The low risk is selling more to existing customers.
The medium risk is selling your existing range to new customers and selling new products to existing customers.
The high risk is selling new things to new customers.
The safest route to take is to sell more to your existing customers and the easiest way to do that is through Windows of Opportunity.
Point of action
Take the list of your most important customers (the Christmas Card List), perhaps also using Pareto’s 80:20 rule to further refine the list, placing the names in the left column. Then at the top, list the products or services that you offer. They can be nuts, bolts and washers; Valves, Pumps and Actuators; or public relations, writing and consulting. Now, against each element of the matrix, put the estimated level of penetration (or wallet participation) that you have with each customer against each product or service that you offer. Show this as a rough percentage, 100%, 80%, or 30%, something simple that everyone can understand. You may need help from the sellers on this. Better yet, use delivery drivers. They often get to see inside customers’ warehouses and know who is buying what from whom. This is your window of opportunity.
Cost: £ zero
Lesson 4
So far, this exercise has cost you nothing more than time, effort, and the embarrassment of not having this vital data on hand. We should now have in a single spreadsheet a list of the key decision makers and influencers of your most important customers, cross-referenced with who buys what and how much of their spending they have. This list needs to be prioritized a bit more.
Point of action
Take the customer list and add a column for Annual Income. This can be for the last year, or the last twelve months, or even the last six months annualized. Now sort the list with the highest earning customer at the top.
Cost: £ zero
Lesson 5
Adjusting the list based on Windows of Opportunity can have a major impact on the direction of the business as a whole. It’s better to take the full figure for penetration rather than the individual scores for each market segment, as this next stage doesn’t want to be too complicated.
Point of action
Create a new column titled Overall Penetration and stick to simple percentages like 50% or 75%. Now divide the income by the percentage figure and the result should be the potential of the account. Sort the spreadsheet again, with the highest potential, shown in Pound Notes at the top. This should be a list of your softer goals.
Cost: £ zero
Lesson 6
We have already addressed customer churn in this exercise. Some churn (mergers, acquisitions and bankruptcies) is inevitable, but in general, at least two-thirds of customer migration can and should be detected before it happens. If you have a 15% churn rate, it should be possible to reduce that figure to just 5% in a few months, thus putting an additional 10% in the revenue forecast.
Point of action
To do this, you need to listen to your customers. Discover its little things. Find out if there are personality conflicts between your sales people and your buyers. Find out what’s stopping them from turning over all their business to you; to pass it on to other buyers of your goods and services within your organization. And find out what problems might be leading them to look elsewhere.
