Put a Few Small Fish in Your Basket of Eggs!
In recent years we have all heard, seen or felt the impact of collapses by companies such as Ansett. Some more than others. Many small businesses, such as caterers and cleaning companies have gone to the wall, or are in the hands of receivers. Why? Because they failed to acknowledge a key natural law of sales. Here is what they should have done
Sales Tip No.1: Manage the width and depth!
As a marine insurance sales rep, I remember only too clearly the loss of a key account. It represented 5% of our annual revenue, and took a lot of replacing! It placed a lot of pressure on the team. It was like being 4 goals down at 3 quarter time.. and always having to play catch-up football. Essendon players will know the feeling!
Imagine if Ansett was your only account. I saw several small business operators on Business Sunday the week after the collapse, admitting they had learned this universal sales law the hard way! You must manage both the width (size of accounts) and the depth (the number of industries and markets they operate in) of your client base. To ignore this law is to invite distress and risk not being able to secure the budget.
Effective Salespeople know how to balance the number of key accounts they have, and also live by the saying that Small fish are also sweet!. They have a good cross-section of size of accounts, and the spread.
My advise implement strategies that will ensure your will not be adversely affected by the loss of a single account.
Sales Tip No. 2: Ensure you have a solid pipeline of new potential accounts
Good sales peoplealways feed their pipeline so there is a stream of new business from new or existing accounts, which will replace the accounts lost.
Of the 60 odd organization I have worked with over the last 4 years in sales training, I have never had one say they don’t lose accounts! If you are an exception to the rule, then ignore this point. But if you do, and you therefore cant guarantee that 100% of your budget will come from existing clients you retain then you had better heed this advise;
Always maintain a healthy pipeline of prospective clients. On this note, I am often asked how much should a TPS have in the pipeline? My answer: That depends on your conversion ratio! Many young players and seasoned performers fall into the trap of thinking of the amount they need to close any gap. But what if their conversion ration of Proposal/quote to Order is 2 to 1. In other words, on average you win one out of every two quotes. If this was the case, and you need $100,000 in orders, there better be $200,000 dollars worth of quotes/tenders/submissions in the pipeline.
Otherwise, come budget review time, people usually utter a 4-letter word starting with F I was thinking FEAR! What word were you thinking? Fear that the budget is now unattainable because I have not managed the width and depth, and I don’t have a pipeline which can deliver the result when I need it! Ever been there?
