Develop and Maintain a Customer Strategy for Profitable Growth
This month's topic is relevant and timely. CSO Insights has just released its 2008 Sales Performance Optimization report and tuning into and strategizing for customers both need attention. More than 1500 companies responded to this year's survey and more than half of them (54%) indicated a need to improve in the area of developing strategic plans for key prospects.
This isn't just a nice thing to do. We looked at overall company quota achievement and found that companies that need to improve in this ability averaged 87% of overall company revenue targets; those meeting expectations in this ability averaged 90% of company quota; those exceeding expectations reported 92% of quota.
It appears that taking the time to develop a strategic plan does in fact pay tangible returns. Many companies think that sales training can help with the strategic account planning aspect of selling. And we found that sales organizations that have formal training programs performed better than those which do not. But an even more interesting trend that our analysis surfaced is related to the type of sales methodology the companies were using.
In general, firms using a commercially licensed methodology perform much better at strategic plan development than firms using an internally developed methodology. And when we drilled deeper into the commercial methodologies being used, we also found differences in performance.
These differences mirror the companies' adoption of and adherence to whatever methodology they standardize upon. Years ago when we were running a large account management program it was interesting to see the differences within the same company. Even though everyone had been sent the same pre-course assignment some teams arrived having done little while others had done a great deal. The most surprising example, however, was seeing various members of one account team introducing themselves to other members; they had done everything by on-line communications and had never met before in person before but had done a super job of prepping for the session.
This highlights another key piece of the puzzle: Taking the time to thoroughly research prospects prior to calling upon them. This is vital in today's competitive marketplace and with today's customers expecting you to have done your homework on them (as they have likely done on you!). Again, nearly half (48%) of survey respondents felt they needed to improve in this ability. While you might think that the Internet would be the great equalizer here. Just as prospects can get a lot of facts and figures on you and your products, doesn't the Internet offer a great way to get access to information about them? Well, the answer is both yes and no.
We see that the Internet does offer "a" way to get information on your clients, but it's not always an effective way. As one research client shared with us, "The Internet is like the Library of Congress without the Dewey Decimal System. I know the data I want is in there, but I don't have an easy way to find it."
More sales operations and training groups realize that it is their responsibility to find ways to help reps quickly pull the information they need from the vastness of the Internet. Tools are now available to greatly enhance these research efforts. One of our favorites not only provides background on executives, tear sheets on the general business description and competitive situation but also benchmarks financial performance. Revenue growth and operating profit are both automatically mapped against industry peers and world class performers. Several other financial measures including cost of goods sold (COGS) and days sales outstanding (DSO) are also provided.
These are the types of business measures—and business issues—that reps today need to be knowledgeable and conversant about.
The final aspect of strategic plans we'll discuss today is your reps' ability to find this information in order to use it. Here things become genuinely troubling. In our survey section on sales knowledge management we look into how much effort is required to access various sales knowledge components—including strategic account plans. 61% of firms reported some to significant hunting was required to even find the plans; another 14% reported they could rarely find them! The complete list is shown in the graphic.
To summarize, there appears to be real value in taking the time to actually develop a strategic account plan for your key accounts. Commercial methodologies score somewhat better in this regard but internally developed programs also provide good results.
Fundamental to sales in general and to developing strategic plans in particular is doing appropriate, current and thorough research on these accounts. The Internet is an amazing resource/repository but also can be an amazing time sink. Check out applications that leverage the Internet, deliver the goods and minimize time out of selling.
Finally, like that certain wrench with the bent angled head to get at that the back spark plug, a tool is only useful if you can readily lay your hands on it. Otherwise it will only be that much more frustrating to know you have it but can't find it when you need it!