“I am driving past that lower value customer to get to the higher value customer……..so I may as well drop in and visit”
“It is important that all customers still know that we care enough about them to visit, regardless of their low value”
“If we don’t, the competition will”
“You never know which low value customer may one day transform into a high value customer, so I want to cover all my bases”
“The company no longer spends on A&P, so my visit to the low value customer is our branding program!”
“Because these little customers aren’t as busy as the bigger customers, they have time for a chat, and sometimes tell you what is really going in the industry”
Heard one or two of these justifications for the paternal instincts of many Australian B2B Sales Execs, who simply can’t let go when it comes to focus, and who to visit and who not?
Point #1. It should not be left to the discretion of the individual Sales Execs to make that type of Sales force effectiveness call. A dynamic and objective set of economic parameters should do so ……. Uniformly across the whole sales force and customer base. Systemically.
To this end, all customers, from biggest goliath to all the little rats and mice, should be comparatively assessed on current value and potential value (see previous two posts). As converted to margin contribution. Then a methodologically sound basis for amortising the total cost to sell and to serve that customer base should be allocated against the number of sales execs in the sales force …. Converted down into the cost of a visit. What is the minimum number of visits in your industry to begin to make impact on the customer’s buyer behaviour? Your answer to that question then can apply to re-consititute the cost of a visit back up to the cost of minimum level account management.
Now for all customers that do not reach that cost hurdle rate based on current value margin contribution – they do not reach break even for minimum level account management. For all customers that do not reach that cost level on potential value (margin) – they are not likely to reach break even for minimum level account management over the next 12 months at least.
What to do with this cohort? Come back next week to check the solution to the sales force effectiveness conundrum.