When was the last time you had a conversation that sounded like this?
“Hey Bill, how many new accounts have you developed recently?”
“Well Scott, I have been kind of busy and have not had time to work on new accounts.”
“Busy?” I ask. “What keeps you so busy that you cannot find time to develop new accounts?”
“It’s my top accounts. They keep me busy and I have to keep them happy because that’s where my sales come from.”
And there it is — the age-old problem of time management and effort vs. results staring you in the face. If time is money, should we not be investing our time and efforts in money-making activities? Bill’s answer is all too common and unfortunately misguided. The myth that our top customers are the fuel that drives future growth and overall success is simply flawed. Do I disagree with Bill that top accounts are important? No, but I understand the growth rate of mature or optimized companies rarely exceeds industry growth rates, which usually are single digits in a normal economy. Therefore, mature accounts need to be managed differently.
I also recognize Bill’s prior year’s sales performance will be less by 5-10% due to attrition activities outside of Bill’s control. Yet, he is given a new quota for the upcoming year asking him to do more than last year. Face it. Customers go out of business, become credit risks, had an exceptional job in the prior year or change loyalties for a variety of reasons.
Top-performing leadership and sales teams acknowledge these facts and adopt strategies and sales processes that overcome these challenges and produce above-industry-average growth rates. These teams understand “it’s about time” and the activities performed during this time. More importantly, they recognize how little time they have in front of the customer, the current sales cycle phase the customer is in and the activities that promote the highest rate of return for their efforts.
Filter out duties such as phone calls, quotes, reports, emails and windshield time, and the typical sales person spends roughly 28% of their time or roughly 11 to 15 hours per week in front of a decision-maker. Hence the need for a sales process that emphasizes account initiation and maximization.
The effort/results sales call matrix is one way to improve your sales team’s growth results. It is comprised of four activities that coincide with the lifecycle phase of an account contributing to growth-rate performance. These four phases are initiate, cultivate, maximize and optimize.
Although the initiation phase initially produces low results, it is essential in developing the interest pipeline. With a 1-in-10 conversion rate of prospects, it is important that prospect size align with attrition loss to keep the growth rate positive. Once an account reaches the maximization phase, you will see growth rates that far outpace the industry numbers. Trying to recover lost business from the optimization phase of our mature key accounts, at best, only will produce flat revenue growth. Real growth is realized when we convert a prospect over to the cultivate phase and then move them into the maximization phase.
As you can see from the matrix (above), top-performing sales teams spend an equal amount of time on initiation and maximization, which is roughly 60% of their selling time. The other 40% is spent on cultivation and optimization.
The time for self-evaluation is now. Where does your sales team stand on the effort/results matrix? As sales leaders, we must put systems in place to ensure our sales teams’ success. Is your growth rate outperforming the industry average?
This article was originally titled “It’s all about time” in the September 2016 print edition of Supply House Times.