Literature provides direction for meaningful exploration.....
*This blog will need to be updated once AI technology becomes central to the Sales Planning process.
An important aspect of sales planning is selecting accounts for Account Executives to focus on. Often called “key accounts”, these are the enterprise accounts that sales reps are expected to focus on for sale/upsell/renewal/services. The goal is to become a business partner to the customer (all the way to C-suite), deliver top of the line products/services and in turn sign up a customer for life.
I have seen the range on both account count and selection process – from 1000s of accounts with each rep focused on anywhere from 30-50 accounts, to 50 accounts with each rep focused on 2-3 accounts; from allowing the reps to select the accounts to one entirely mandated by C-suite.
There is no right answer. The account count entirely depends on product, customer and market maturity, and goal of the account naming process. Clearly, better the product-market fit and more mature the customer, lesser 1-1 focus is needed to drive the same $ outcome. If the goal is to name a bunch of accounts to keep in the radar and ensure some touches, 1000s of accounts may be ok. If the goal is to offer premium service and build relationship across the C-suite, that calls for a focused account list. Keep in mind that research/data has shown that, across a range of B2B industries, a rep can handle at most 10-20 customers meaningfully in a year (referring to the $250M+ revenue type enterprise customer). Beyond this count, the interaction isn’t meaningful enough to classify the account as critical.
How should sales and sales operations go about selecting accounts?
One popular way to do this is to pick from Fortune 500 lists, review growth and spending data, peruse market events and trends that necessitate product, look at current relationships/revenue/delivery ability and then carve up the list be territory.
However, there is a more structured approach based on strategic and financial criteria that can drive more focus and returns with the account selection process. How is this done?
Let’s start with financial criteria. The two important parameters here are customer growth and existing customer spend.
Plotting this data on a 3x3 matrix gives us a path to classifying accounts:
This is a good start to building a focused account list. To finalize the list, some strategic criteria need to be applied. Sales reps and corporate strategy teams are an excellent source of information here. Strategic criteria include:
Now, the process, as structured as it is, is not easy to implement. Primary reason is that the data needed to apply criteria is not clean. External calculated data is based on assumptions and industry and company standards are not easy to come by. Companies buy lists but this gets expensive, however now there are many powerful tools (ex: Clearbit) available to access high quality company/contact statistics.
The less concrete the data, the faster sales goes back to traditional ways of selecting accounts. The same goes for customer bookings/revenue data. It is imperative to get this right – considering variations in customer names, parent child relationships etc. The cleaner the data, the more useful the output.
A win-win framework..
In the absence of super clean data is to employ an 80/20 principle to selection criteria i.e. 80% of the account list is built using a modified/less rigorous framework and 20% is left to the discretion of sales based on their market/customer knowledge/experience. The less accurate your data is, the higher you need to go from 20% to partner with sales effectively.
The framework can also be modified to a 2x2 matrix. The premise is the same – mapping growth against existing install base. But instead of hard cut off’s you segregate quadrants based on an 80/20 rule. For ex: when looking at bookings the quadrants on the right consist of customers that account for 80% of the total bookings. The left quadrants are everyone else. The above process leads to a more reasonable conversation with sales reps on selecting accounts.
Content credit also goes to Hoda Mehr who was my partner in all things Sales Operations, till she embarked on the startup road in FinTech. Content was developed during our tenure at Symantec Corp.
Please press the Tweet button. It helps more people see it. Thanks!
COPYRIGHT 2017 ALL RIGHTS RESERVED