| Classifying
& Prioritizing Accounts An
Introduction to Managing Your Time and Territory
Copyright 1999-2009 Michael Markette
In order to penetrate a
market, you must first understand its components. For a
sales professional this means taking a look at your
database and classifying it's accounts into logical
categories. Once classified, you must then prioritize
the resources you spend selling to each account.
Classifying and Prioritizing is a both a methodology for
organizing your accounts and an approach to working them
efficiently. It is more than just organizing your
prospects in a best-to-worst, A-B-C fashion and going
after them. Classifying and Prioritizing incorporates
elements from Sales Positioning in it's category
definitions. This strict objective view of your accounts
acts as a guide for working them, and a balance to your
subjective view of the accounts. Information is a key
component to properly classifying and working accounts.
Before defining each account classification we will
explore account management from a sales person's point
of view and cover the role information and subjectivity
play in account management.
Account Management
Managing accounts means
many things to many people. For the purpose of
Classifying and Prioritizing Your Accounts, it means
managing the process of uncovering and selling to every
need an account possesses. The individual sales
opportunities are not classified under Classifying and
Prioritizing, neither are the contacts within an
account. So long as an account has possible or definite
needs, the account should be classified. Let's look at
account classification versus sales opportunity and
contact classification.
One account may have
several sales opportunities. For example, ABC Company
may have 50 stores across the country. One store is
undergoing a major facelift in route to becoming ABC's
flagship store. Another store is being built as a
prototype for future stores. And the bulk of stores are
being reviewed for image consistency purposes. There are
three selling opportunities here. Without knowing the
details of each, we can still assume that each
opportunity could be classified in a good-better-best
fashion. When one opportunity is eliminated, be it by a
sale, lost sale, or no change on part of the customer,
the other opportunities still exist and the account must
be worked accordingly. The account itself is only as
good as it's best selling opportunity.
Contacts influence the classification of an account. It
is up to the sales professional to digest all of the
contacts' views and properly classify the account as a
whole. One contact at ABC Company may not voice a need
for a flagship store, while another does. In this case
the sales pro must determine if the contact voicing the
need is significant enough to represent a need on behalf
of the prospect. That determination affects how the
account is classified.
Account management means
classifying an account, while working it's selling
opportunities and contacts individually. In order to do
this properly you need a lot of information on each
account.
Objectivity
The path to selling an
account becomes clearer with each piece of information
you gather about the account. The sale does not
necessarily become easier, but at least you know where
you stand and what needs to be accomplished in order to
reach your goal. In other words, you know enough to
properly classify the account. Since each classification
has a definition, you are tasked with the duty of
uncovering facts about accounts in order to classify
them. There is no guesswork here, just the facts. What's
more is that you will have the nomenclature to use in
classifying accounts. For each definition there is one
classification description. The benefits of everyone
using the same categories and descriptions are
threefold:
· Account management
decisions become clearer as you possess a solid
understanding of the composition of an account and have
experience working from common positions in the past.
· Communicating with
your peers and coaches with regard to an account becomes
easier due to a common language and understanding of the
classification system.
· Database integrity is
greater and reporting is more thorough due to the
consistent use of terminology.
Information leads to
objectivity. The best sales professionals know when to
add subjectivity into their decision making.
Subjectivity
Buying is an emotional
decision. Even large complex business sales incorporate
a lot of emotion in the buying decision. This makes it
difficult not to add your gut feel into account
classification. Especially when in the past you have
landed a sale and saw no valid reason for doing so. In
the end, the customer just wanted the product or service
being offered. Emotion can not be quantitated, but is
recognized by good sales professionals. So how is it
incorporated into account classification. It isn't. But
it's important! The role subjectivity plays in
Classifying and Prioritizing is on the action plan side.
Ultimately, you make
decisions on how to handle each account. The closer to
the sale you get, the more personal each decision
becomes. And as you understand all the factors within an
account you may start to place greater importance on
your subjective views of an account. The classification
of accounts continues to be based on the same factual
criteria they have always been based on. The sales
professional's role is that of a decision-maker weighing
all the facts against their experience and feelings.
There is nothing worse
than taking the time to visit an account only to find
that they weren't as qualified as you thought they were.
You made a gut decision and it was not a good one.
Conversely, you hate to hear that the competition is in
on an account that you're not because you could not
justify to yourself or others that the account was
qualified. With a mutually agreed upon classification
system, everyone understands how an account is qualified
and when to meet with them. You subjectively determine
how to pursue them, not when.
Account Classifications
In this section we will
define how accounts in the prospect universe are
classified. Classifications will be based on information
gathered on each account and the criteria it matches.
For the criteria itself we look to Sales Positioning. In
Sales Positioning we identified the four basic ways your
company addresses client needs. Those are:
· Reason 1 from Sales
Positioning
· Reason 2 from Sales
Positioning
· Reason 3 from Sales
Positioning
· Reason 4 from Sales
Positioning
These four or so needs
are the central point for classifying accounts. Should
there be no needs present after a thorough investigation
of the account, there is not a fit for your company's
offerings. If at least one of the four needs is
identified by either the sales person or the prospect,
the account is classified as having identified needs. In
order to move the account into the sales cycle, both the
sales person and the prospect must work down a path of
identifying and agreeing on the prospect's needs. It is
not enough for the sales person to see that an account
has a need in order to sell the account, the prospect
must recognize it themselves. We can build these
classifications into a matrix (Figure 1)
From this matrix we can
classify prospects into four categories of which only
three are contained in the matrix. The fourth is a
category resulting from our efforts to develop accounts,
Gold Accounts:
Unknown
Accounts.
We have data that suggest they
may be a fit for your company. An example if you sold
business music services would be high Passion Fashion
Retailers. Many would be clients so others may be a good
fit for your company. In this classification, we see a
need but the account does not. Maybe they are not in
tune with that part of the business or have a different
concept than their direct competitors. From your
company's view, they have a need and so we target them
in hope of identifying and agreeing on concrete needs.
It is possible that the
account feels they have a need but we do not see it.
This is typical of an account that calls in and asks for
a quote on music services. The account uses a competitor
now and wants a bid. It is common to thrust them into
the sales cycle without agreeing on needs. Often these
great opportunities turn in "no change"
situations.
Dormant Accounts.
There is not a fit with your company. This may be
because we know little to nothing about them. Literally,
we may not know they exist. On the other hand, we may
have so much information on an account that we realize
that they have no needs and therefore are not a fit. The
bottom line is that accounts in this classification do
not have identified needs.
Targeted Accounts. We
have data that confirms the prospect is a fit.
Specifically, the prospect agrees that they have at
least one need that your company can address through at
least one of our four advantages we listed in Sales
Positioning. So not simply a need, but one that your
company clearly can address.
A pretty simple approach.
Identify accounts with needs that your company can
address through it's demonstrated abilities: In our
example this might be Impactful Music Programming,
Musical Fidelity and Sound Coverage, Engineering
Experience and Project Management, and Account
Management and Customer Service. Of course there is
more. You do not move from Targeted to a sale without a
lot of work. Let's discuss what is entailed in
developing these Targeted accounts into sales.
Gold Accounts
CLASSIFYING ACCOUNTS THAT
POSSES SALES OPPORTUNITIES
Earlier we mentioned that
an account is only as good as it's best sales
opportunity. And once we have agreed with the prospect
on needs your company can address, we are ready to
formally enter a sales process. So does that mean that
as soon as a prospect says, "Yeah, I think it is
important that all of my stores play the same music and
right now, with the radio, they're not" that we get
to see them as soon as possible? The prospect has an
identified need that your company addresses well. The
answer is no. This sample account would clearly be
classified as Targeted, but by definition, Targeted
accounts are not in the sales cycle.
The key to being in a
sales cycle is the willingness and ability to buy. When
an account not only recognizes they have needs but
commits to addressing them, they are in the sales cycle.
The account is actively searching for a better solution
to their problem. The sales opportunity could very well
result in a "no change" should the prospect
not see an increased value in the alternatives it
considers. There is still a lot of selling to do. The
big difference is that the account sees some urgency in
addressing the needs you have agreed upon and therefore
will consider your proposal seriously. We call accounts
in the sales cycle Gold.
We have data that suggest
a possible order. This means that the prospect has
identified needs and has demonstrated urgency in
addressing them.
Let's not leave the
accounts "demonstrating urgency in addressing
needs" too vague. The following four actions
demonstrate the urgency needed for an account to be
classified as Gold:
· Have a new opportunity
not connected with any other locations that the
competition has a stronghold on.
· Have plans to meet, or
have already met with the competition as an alternative
to their current situation.
· Have a contract
expiring within six months.
· Have agreed to your
proposal and are requesting a price.
So for an account to be
classified as Gold, they must have a need that is
mutually agreed upon and must have demonstrated one of
the four above actions. Gold accounts should be engaged
face-to-face in attempt to win them to your company.
Summary
At this point we can
visually display our account classifications. All
accounts whether know or unknown, reside in our prospect
universe. As we identify needs that your company can
address and sell to, the account moves down the funnel
toward a sale (Figure 2).
The next step is to look
at the four classifications and create action plans for
each. As we move down the funnel toward Gold, we spend
more and more attention on accounts. Not only do we
spend more time on Gold Accounts, but also we are more
intimate with them. We subjectively decide what move to
make and when to make it. We are in contact with them
very often, sometimes daily. Quite the opposite is true
for accounts in our prospect universe or even Unknown
accounts. For these, we discuss general approaches that
ensure quality coverage of these accounts yet save us
time to spend with more qualified accounts. In the
following sections we will discuss the action plans in
place for each account classification.
Prioritizing Accounts
When we speak of
prioritizing accounts we are referring to the frequency in
which we engage them and the amount of resources we expend in
engaging them. We recognize that we simply do not have the
resources to personally engage every account in our prospect
universe. Our Gold accounts demand this personal attention,
but certainly not the Unknown accounts. As for the Targeted
accounts, there is a balance between personal touch and a
cookie cutter approach. This is a challenge for most
professional sales people. How does one focus on the
opportunities at hand without ignoring accounts that represent
opportunity tomorrow? A disciplined approach to accounts based
on their classification is the best way to ensure all accounts
are engaged appropriately. Before we define the rules of
engagement for each account classification, we will define
engagement.
Engagement
Engage is a very
appropriate word for prospecting and selling. The word
has many definitions ranging from, hire, fascinate, mesh
gears, attack, and keep busy. We aim to mesh gears and
fascinate prospects, but many times we merely keep them
busy or come across as attacking. So for your company,
engagement is the attempt to interlock your company with
the prospect. Most times you engage the prospect you
fail to interlock. It is a process that takes time. Once
interlocked, the two businesses can move toward a sale.
Keep in mind that your
company engages prospects continuously. Not just by your
letters and calls, but also by your company's
advertisements, your company client's music, voice mails
left for the prospect, even when a secretary advises a
decision maker that your company is holding on the line
for them and the call is not taken, the prospect has
been engaged! You may ask, how well is a prospect
engaged if they don't even take your call? Should we
call them back until we reach them? Let's for now just
recognize that in this example, the account has been
engaged. Every time your company enters a prospect's
thoughts, they have been engaged.
Rules for Engagement
We have defined
engagement, and we know that in prioritizing accounts we
are concerned with the frequency of engagement and the
resources expended in doing so. Let's look at the
account classifications and the level of information we
have about accounts in each to solve the frequency and
resource questions:
Click here for figure
2, Account Classifications
UNKNOWN ACCOUNTS
If all we know is general
segment information about our Unknown accounts then we
are making assumptions about their needs and we aim to
spark interest when we engage them. And since we have no
specific information about the Unknown accounts we must
assume that no one account is more likely to buy than
another. With these circumstances, the quantity of
engagements is more important than the quality of
engagement. That is, If no one account is more likely to
buy than another, we need to contact as many as possible
to find the ripe ones.
Should you mail a letter
to a prospect and then make a follow-up call only to
leave a voice mail, you have engaged the prospect two
times. The earlier question was, should you continue to
call back until you reach the right person? Not
immediately. Move on to the next account. Again, we know
little about Unknown accounts, they are all equal in
terms of opportunity. You have engaged the account in
this example twice, and the next account in line has yet
to be engaged. Rotate through your Unknown accounts as
quickly as possible ensuring regular periodic engagement
(Figure 3).
Inquire figure 3,
Rotating Through Unknown Accounts
Figure 3 shows that for
the same 15 engagements, the second approach of calling
once and moving on through the prospect base yields a
higher number of appointments. And, the second approach
is ready to re-engage the prospect base from the
beginning whereas the first approach has only made it
half-way through the account base due to it's strategy
of recalling until they reach a decision maker. The idea
of rotating through your prospects follows the theory
that there are several accounts ready to buy in your
territory today, if you find them. By engaging in
quantity, you are more likely to catch accounts while
they are hot, and while engaging just as many as in
approach 1 above.
Regardless of the size of
your territory, the above approach will work best for
Unknown accounts. Conversely, the size of your territory
will affect the frequency you engage each Unknown
account and the resources you expend in doing so. The
general rule for Unknown accounts is that they should be
engaged every 3 to 4 months. By taking the total number
of Unknown accounts in your database and dividing by 13
weeks (3 months) you will find how many Unknown accounts
you need to engage each week. If this number is at or
above 25 per week, a cookie-cutter approach is
suggested. Should it be less than 5 per week, an
individualized approach is best.
To support your attack on
your Unknown accounts, your company offers Targeted
Prospecting, a methodical approach to finding new sales
opportunities through a focused effort aimed at a
specific market segment.
TARGETED ACCOUNTS
Targeted accounts demand
much more attention than Unknown accounts. And this is
made easy because by definition we agree with the
prospect on needs the account has. It only makes sense
to focus on those needs and explore them deeper until we
have a selling opportunity. At the same time, we
continue to search for additional needs because the more
needs your company can address the more likely the sale.
The approach to Targeted accounts is simple:
1. Build a case on
existing agreed upon needs.
2. Uncover additional
needs through questioning.
When addressing existing
needs you want to build a case. Share information on
other accounts facing the same issues and your company's
answers to them. Use third-party references whenever
possible. You are building a case. The word case
suggests evidence, proof, and testimony. If it is all
you talking you stand as much of a chance in convincing
your prospect as a defendant in a trial that has only
their word. People want proof. Newspapers, letters of
reference, and case studies are a few good third party
sources.
Ask the right questions
to uncover new needs. Practice your questioning and
promise to do it on every call to Targeted accounts.
To support your efforts
in winning Targeted accounts, your company offers
Developing Accounts, a need specific listing of third
party references that should be used when engaging
Targeted accounts.
GOLD ACCOUNTS
Gold accounts are in the
sales cycle. You should smother them with attention.
Winning Accounts provides a step-by-step approach to the
sales process. It is structured, yet depends upon the
sales professionals personal approach to the account to
be successful.
For each account
classification we have basic rules of engagement:
Inquire for figure 4,
Rules of Engagement
Each of the resources
will be discussed in detail in later sections. The
following is a flowchart of your company's sales
process:
Inquire for figure 5,
Sales Process
Application
1. List three examples of
objective information and subjective information that
you may obtain during a conversation with a prospect.
2. Write the definition
of a Unknown Account and their rules of engagement.
3. Write the definition
of a Targeted Account and their rules of engagement.
4. Write the definition
of a Gold Account and their rules of engagement.
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