Why is Account Based Sales So Successful?
We have looked so far in this book about the way that Account Based Selling deals with the issues that have arisen in modern-day sales organizations. The fact that technology has lowered costs in certain areas but driven a wedge between the customer and the company is something that needs to be addressed.
Also, the fact that the sales process is a little disjointed between the sales team and the marketing team also is an issue that must be resolved if any sales organization is to become successful and move their operation on to the next level.
The Account Based Sales Approach that we have touched on so far in this book is an ideal way to resolve these issues for any company large or small. It works for the multinational, it works for the medium sized business that wants to grow and it works for small companies and startups. There are many reasons that Account Based Sales is and can be successful. The benefits of using this approach and plentiful and all need to be considered when looking at how it can change the way you do business. Part 2 of this book looks at the benefits of using an Account Based Sales approach and what this can mean to you and your company.
It boosts sales
The bottom line with just about any business is the sales numbers on the bottom line. Higher sales figures allow the whole company to breathe more easily because they have job security, the company is going places and the future looks bright. When the sales figures are not so good then panic starts to set in and people worry about their own career with the company.
It delivers sales because it focuses the efforts of the entire sales team on the key accounts that will make a difference to the company. By gearing up the sales effort in a targeted manner to reach the clients that will make a big difference to your sales organization you are using your resources in the right places to generate the biggest income.
Whether it is working hard to get this new client on board or working equally as hard to retain the high-value clients you have, the effort is always worthwhile. Generating key contacts in the target company by identifying them and then gaining their trust is the ideal approach to get that big account on board. When you have several people in your company working on the same account at different levels then the effect is that you gain trust much more quickly and effectively.
Once you make contact with the big accounts that your company desires then you are able to generate a high-value relationship with them. Once the first few orders are in and fulfilled professionally then the door is open to sell more to these big accounts and get your business geared to providing them with quality and value. If you become the supplier of choice to a big account then you can work together to provide better service and keep that customer happy for years to come.
This is where your sales team can come into their own and spend their time efficiently servicing your high value existing clients rather than the old traditional way of knocking on as many doors as possible hoping for a little sale here and there. The big accounts make the most difference to the bottom line for any company and he more of these that you can successfully get on board then the better it will be for your company.
It lowers costs
Being able to target and focus your efforts in fewer places is a great way to keep your costs under control. When you set a marketing budget you want to know how effective your spending is going to be. The term Return On Investment or ROI is used in all industries to define the amount of money that will come back for every dollar you spend. To use a shotgun approach and look for low-value clients under every stone does not use that marketing budget in an effective way.
Later in the book, we will put together an effective Account Based Sales Development Plan but the key to it all is defining the accounts that you want to get. Remember the way that BNI chapters operate – they look for specific people in specific companies to link to and develop their business. We are looking at the same thing here. Determine the companies and the contacts that will make a real difference to your company and make these your target accounts. This is a much more cost-effective way of doing business than spending your marketing budget on trying to hit everyone at once and getting very little return.
Being effective in spending money in the right places will reduce costs in the short term and in the long run. Servicing high-value accounts cost much less than trying to hit everyone in your chosen market. Learn the lessons from Henry Ford – don’t waste half of your marketing budget!
As we looked at much earlier in the book, the cost of servicing hundreds or thousands of small clients is unwieldy and can cause high costs. Having a system in place to deal with a high number of clients is expensive to set up and costly to maintain. You need a team of people to be there to answer the calls, deal with the orders and deliver the goods or services that your smaller customers need. By supplementing your client mix with larger, higher value accounts you can lower your overall cost per customer to a more effective and sustainable level.
A lower cost base is the other factor, along with sales, that will have the biggest impact on the bottom line of your company. Account Based Sales actually delivers both of these factors at the very same time. As your sales increase, you see your costs lower. This can only result in higher profit levels. That is why Account Based Sales approached are the future of any sales business that wants to survive and thrive in the future.
It increases the average contract size
Working hard isn’t the only way to success. Working smarter is much more enjoyable and can bring in the same rewards. If you are able to mix the two and work smart and hard then you can unlock the door to riches. Account Based Sales allows you to do this because it is geared up to give you better results from fewer resources. Once you start to bring in greater income then you can look for the next big account that will help your company more forwards, then the one after and the one after that. All the while you will be looking after the clients that you have cultivated and grown in the recent past.
The health of a business can be looked at through the eyes of their average contract size. As we have seen in a few places in this book, a series of small contracts means that you have to work hard for every dollar and fight to keep every client happy all the time.
With an Account Based Sales approach, you can focus your resources on the high-value accounts that make you the greatest profit. Remember the Pareto analysis we looked at where 20% of your clients bring you in 80% of your profit. Well, guess which of your clients you should be looking after?
The average size of your contract shows the health of the business because you are making good money on a regular basis from your average customer. It might be best shown by extending the example we looked at much earlier in the book-
- Business A has 1,500 clients that earn one hundred dollars each. Their annual income is $150,000
- Business B has ten clients that all earn fifty thousand dollars each. Their annual income is $500,000
- Business A has an average contract size of $100
- Business B has an average contract of $50,000
Just by stating the same facts in a slightly different way we can now see the difference this makes to both businesses. How much would business A have to spend on a traditional marketing and sales approach to get back ten customers that might leave over the course of the year? The fact is that because it is a low-value account the focus of both sides is on costs. If the customer can save 10% by going somewhere else then they probably will because a $100 per annum account buys no loyalty.
On the other hand Business B is using an Account Based Sales approach so they are already working hard to keep their relationship with their existing clients going in a way that Business A doesn’t have the resources to do. When you have a client that is spending $50,000 a year with you then you have a bigger budget to spend on keeping them happy than a client who only spends $100 per year with you.
There’s little or no leeway for Business A to spend on keeping their customers happy. But because Business B is also using an Account Based Sales technique they have already identified the next key individuals in the next company that they want to meet and develop a relationship with. This means that Business B is always developing their pipeline and creating the next high-value customer to add to their client list. That is why Account Based Sales development works.
It brings in a qualified pipeline
This makes a massive difference to any sales company. The clashes between the marketing team and the sales team disappear with an Account Based Sales approach because the pipeline is qualified and warmed up on several levels by several members of your company. The way that business has operated in the past has been that someone might find the number for a company that they want to work with and give them a call. It is only a slight variation on cold calling because you may have the name and number of the person you want to speak to but that is all. With Account Based Sales marketing you will have targeted the right people and carried out the right research.
Speak to people in your company to see if they have experience with the decision makers in the other company. In these days of people moving jobs on a more regular basis than they did in the past, the opportunities for networking are much greater. If you are a medium or large sized company then the chances are that one or more people in your company will have contacts already with people in the target organization. They may have supplied to them in the past, worked with them, know them socially or have a link on a social media site such as LinkedIn.
If you are a small company or a startup then you may need to work a little harder at this but again LinkedIn is a great place to start. By delivering quality content on LinkedIn you will make key players in linked organizations sit up and take notice. This is your chance to make a connection, nurture it and develop a contact into a relationship. Whatever the connection, this is the first step to making it a lasting and meaningful relationship.
For your sales team, this makes all the difference to how they operate. Instead of calling and hoping, they know that they are speaking to the right people already. The key players at the big account you want have already been cultivated for quite some time and know that your sales force will be in touch. When this happens in an effective and professional manner at many different levels of their company then they feel valued and are much more likely to do business with you. It beats a cold call every day of the week.
It gives quality leads
In addition to a pipeline that is starting to warm up nicely, Account Based Sales Development delivers quality leads quickly that turn into the business. Rather than starting a new relationship with an unknown quantity that might only place a small order, Account Based Sales gives you people that you know, like and trust. And most importantly you are now dealing with people that know like and trust you. The quality of the leads goes through the roof so your sales team has to work less hard and have to spend less time converting these leads into business.
Your sales team will love this aspect of the job. Instead of trying to flog a dead horse with a client that has already put the shutters up, they are able to speak to people that are ready to so business and have the proper authority to sign off the deal. Add in the fact that your business has been able to connect with all the other key decision makers in the target company and you are ready to start unlocking the doors to greater sales and greater success.
In addition to this, it is far easier to sell solutions to your existing customers than it is to go out and find new ones. The quote is that it costs ten times as much to find a new customer as it does to retain an existing one. Well, it cost, even more, to sell to a new customer than it does to sell extra goods or services to an existing one.
Once you have a big account on your books that are satisfied with your company then the number of service or products that you can sell to them increases. Your sales team start to look at other opportunities that might be there in the company and you can tailor what you offer to suit these opportunities. For example, if you deliver stationery products then adding a printing supply or designing business cards is a simple step that you can take which will add value to the relationship.
It is an organized and professional way to do business
Everyone prefers their business to be logical and professional. That goes for you, your team and your customers. To be able to structure your activities in a way that makes logical sense changes the way you do business. The shotgun marketing approach of trying to find new customers brings inconsistent results that someone has to unravel and try to make sense of.
If you have marketing campaigns that try to attract anybody (just anybody) then you will have just anybody contact you. They may not be suitable clients, they may have got the wrong end of the stick or they may be of low value. By organizing and structuring the process you make sure that you have greater control over the outcomes. You might think that if you hit every company then one of the big fish you want to land might come your way but what you are far more likely to do is attract the small fish that clog up your valuable resources and bring in a small income. Being organized and professional in targeting the right people gives you the best chance of landing the fish you want that will keep you in profit for a long time.
Sales can be chaotic. With a sales team that is out of the office for long periods at a time and orders coming in from all parts of the city, the region, the country or the globe then managing all of this can be difficult.
And then there is the logistics of having many small clients and trying to keep up with them.
Did that client want one or two pallets?
Did they specify they wanted delivery by Tuesday?
Did we offer a discount?
When do they have to pay?
The logistics of many small companies are far harder to manage than having one big account. You can dedicate one or more people to that account. Your big customers have consistent communication with you and they always have a point of contact that they know, like and trust. You see it’s those three words again – know, like and trust. A company is far more likely to re-order from you and ignore the fact that you might be 5% to 15% more expensive than someone who cold calls them because they know you, they like you and they trust you. The future of doing business is to create a proposition that differentiates your company on quality rather than on price. Someone can always undercut your price. Don’t let them undercut your service. Business is built on relationships.
It works on personal connections
To back all of this up is the fact that Account Based Sales Development works on the personal connections that people make with others. The day of social media and the Internet means that personal connections are far easier to make on a superficial level. It is easy to click connect or follow on a social media site and be immediately connected to someone you might want to do business with or learn more about. But superficial connections mean nothing when it comes to securing a quality contract. You need to go much deeper and with more than one decision maker in your target company. Making a personal connection with someone else is a more enjoyable and engaging way to do business than the just cold calling. It takes a little time to get to know someone properly and top make those connections that actually mean something to both parties.
Clicking a connect button on LinkedIn or Twitter is one thing but sending a personal message or engaging your target with compelling content is something else entirely. It has been said many times before in business that people buy people. This is absolutely correct. Unless you have a product or service that nobody else can possibly provide then you don’t stand out by your services or products. The way in which you stand out to a potential client is by your personality. If you can make a meaningful connection with someone then firstly they are far more likely to buy from you and secondly, you will have much more fun at work.
Personal connections are what makes the business world go round but in the recent past marketing and sales, functions have moved away from this in favor of cutting costs and trying to attract people they don’t know via email shots or a flash website. It doesn’t work. All it does is capture someone’s attention for a short period of time. It is a costly way of not soi8ng business with someone.
Personal connections will last a long time in business. You probably still keep in touch with people that you worked with a long time ago. You may still keep in touch with companies that you supplied or bought from a long time ago. That is the way that business works. That personal connection is worth far more than a special offer or small discount. Develop those personal relationships with the target companies that matter and you can be successful.
It makes things happen more quickly
Business can be a tough place to be. When you want and need immediate results this can often be the time that nothing appears in the pipeline and the sales team get more desperate to seal a deal – any deal. These are the times when people look for the small wins that they will hopefully start to snowball to big gains. Traditionally sales professionals would start knocking on doors, making telephone calls and hoping that they stumble across something big. But by using the targeted approach of an Account Based Sales method you take all of this desperation and guesswork out of the way you do business. It makes everything that you do in terms of sales actually structured and all linked to a common goal. By having all of this set out before you even start makes such as the difference in the results that can be achieved.
As a team of people, you start from the very beginning by establishing the target companies and the target people in those companies. When you work to this structure then you are able to produce quality results in a much shorter period of time. Let’s be clear, it won’t happen overnight because you need to cultivate quality relationships but it will happen much more quickly than by cold calling and hoping for the best.
A successful sales team needs to generate the big accounts that will help to produce sustained success. But the first step to becoming a success as a sales organization is to get the right people on board as quickly as possible. You may have to move them away from an existing supplier of the products and services that you provide so the best way to go about this is by using an Account Based Sales Development technique. Once you have got in touch with the right people on the different levels that matter then you can move from introduction to sale in a much shorter period of time than you would be able to if you were cold calling and hoping for a sale. The way that Account Based Sales works does not get you a contact today and a sale tomorrow but that can reduce the time it takes to get a quality account onboard greatly.
It is a measurable way of doing business
The activity that is put in to generate a sale is an important part of any sales business. The amount of money that you spend and the amount of business that it generates in return need to be in the right balance to leave an operating profit for your company. If it costs more to attract a new customer than they are going to spend with you then your business is heading for trouble. That is why so many of the other aspects we have looked at with Account Based Sales are important. In areas such as-
- Average contract size
- Qualified pipeline
- Breakdown of your contracts
- The time it takes to go from prospect to customer
These all link into the ROI that we looked at earlier. Once you have the ROI working for you then you have a business that can generate big sales from little input of resources. The time and money that a company spends in attracting new customers and servicing existing ones in the valuable resource that needs to be as productive as possible.
But so many parts of the marketing investment are difficult to quantify and separate when it comes to determining how successful a marketing campaign might be. You can ask your new customers why they came to you and record the results but some might not recall why and others will just give you an answer, not necessarily connected to the truth.
Some people just don’t know why they chose you. It can have been a cumulative effect over a period of time.
But with an Account Based Sales approach you are able to measure exactly what was put in and see exactly what came out of that investment. If you set out a proper strategy and target certain individuals in certain companies then the time and money spent on nurturing these relationships can easily be identified and quantified when looking at how it performs on ROI. When the contract is sealed and the big account is yours then the money that is returned can also be easily identified and put up against the investment to see the positive results that Account Based Sales brings. The beauty of Account Based Sales is that it delivers results that can be measured and then improved upon for the next account, or the one after that. Everything learned in this round of work is used to make the next round more efficient and more effective.
Any business wants to know that what they are doing can be measured. When you have mastered an Account Based Sales approach (and we will develop steps to master its layer in the book) then you can take this forward and truly see what return your investment brings you. This changes everything. There are no more woolly guesses about where a customer arrived from. You will know the people you target and know the money you have spent on targeting them. From there you will know what it costs and what it generates. You have all the answers that you would ever want on how much it costs to bring a quality customer to your company as a major account. Once again you would be able to turn Henry Ford (and most other businesses that are operating today) green with envy.
As well as being measurable, it is accountable
The planning of an Account Based Sales strategy means that every piece of the jigsaw is assigned at the beginning of the operation. We move away from the sales team blaming marketing for leads that are not of high enough quality and the marketing team blaming the sales team for not making the most of what has been delivered. We move to a place where accountability can be assigned to individuals and teams to deliver certain results. Sales and marketing have enjoyed this woolly relationship for some time now where definite accountability cannot be assigned and as such people are able to point the finger and dodge the responsibility that managers love to give to a specific person or team. If one team or one person is given the responsibility to make contact with and develop a relationship with one person in the target organization then this means that that team can be judged on whether they delivered that or not. If they get their target and deliver their part of the overall Account Based Sales strategy then they can tick that box. Once all the boxes are ticked then the account is far more likely to be attained and then the team can congratulate themselves and move on.
This forms part of the measurement of the above benefit. Being able to measure the overall expenditure and success is one thing, but it also allows you to measure individual and team contributions that have helped to get to that level of success. This is the dream of any sales manager, so they can instantly and transparently assign certain tasks to certain people and be able to say with confidence whether these tasks have been achieved or not. It makes management of people a lot easier as the line manager is able to work on the inputs of specific tasks and how they are being met rather than just the outputs of whether sales are being made.
It gives a clear overview of the pipeline and the progress being made to land that huge account that will make a huge difference to the fortunes of the company. Transparency of the process helps to focus the minds of all involved and can create a strong team culture as people work together to deliver the results that matter to the company.
It allows the sales team (and others) to focus on what they do best
Once a relationship with a client is established then this frees up the right people in the team to get on with the job that they were hired for in the first place. Your sales team wants to be selling. There are no two ways about that. So they get to spend their time closing the deals that will bring in the right business for your company. Remember that one big account will probably generate enough income to have one or more people dedicated to that account on a full-time basis. So they get to spend their time doing the deals with that customer that will generate the income needed by your company.
Account Based Sales does three main things-
- It allows the sales team to get on with what they do best – closing the deals.
- It makes the job of finding quality leads something structured and part of the sales team’s remit.
- It boosts productivity by allowing the sales team to generate sales.
All three of these things make the sales team focuses on their primary role – generating sales. When someone becomes more specialized in any role then this allows that person to get better and better at it. By giving the specific role of generating sales entirely to the sales team then they are much more able to excel in that role because it now becomes something that they do every day. Practice makes perfect. Having a specialized team that focuses just on closing the deals that matter to your company then these sales experts can give you better results time after time.
In addition to this, when your people deal with the same account day in, day out then they become much better at understanding what the customer wants. The strong relationships that are generated between a client and a company are what drives sales and keep people happy. A happy customer won’t go ahead and look somewhere else to get what you supply. If they receive a cold call from a company that sells the products or services that you supply to them then the likely reply will be, “no thank you, we already have someone.” Once you allow someone to specialize in catering to the needs of one particular client then the benefits to both companies are very large. The company that you serve will have one point of contact that they know they can go to when they need-
- Answers to their questions
- To resolve an issue
- To discuss new products or services
The benefits to your compo0any is the fact that you can-
- Sell them more products
- Adapt your services, products or systems to meet their needs, lowering your costs
- Get more value from the same client rather than looking for many more
People that are dedicated to one role or to one account can deliver better quality results once they have been doing t for some time. They are able to understand what is required from them more every day and this makes your company more efficient.
It protects your reputation
Let’s face it – nobody wants to be the company that cold calls people. Although it can generate results on an ad hoc basis, it is no way to plan the operation of a sales company in the long run. By all means, if your sales team have had a scheduled meeting and see a similar company that you can help close by then just popping in to introduce themselves is a good idea. But it is not the foundation of a solid business plan. Once may be a good idea, twice might help to jog the memory but any more than that and it becomes pestering. It is the face to face equivalent of spam.
In modern business, reputation means a lot. Every move you make can be tracked online. You leave a digital footprint with everything that is ever said or done by you or about you online, including –
- Product or service reviews
- Social media profiles or comments
- Your blogs on your website
- 3rd party review sites such as Google Reviews or Yelp
- Any adverts you have placed
In the current business, world reputation means a lot. Before anyone will buy from you they are very likely to check you out online. They want to know what you offer, they want to know the story of your company and they want to know what your customers are saying about you. Your reputation can open doors for you when you want to sell. Your reputation can close doors for you before you have even had the chance to sell.
Cold calling is something that can harm the reputation of your company. The big companies that are successful don’t need to cold call. They get their business through quality advertising, word of mouth and increasingly by Account Based Sales Development techniques. They don’t need to call or spam random customers on the how that they might want to buy.
Quality relationships lead to quality accounts. Do you want to sell to someone you know nothing about that you just happened to pick up the phone to? Or do you want to sell to someone you targeted from the start and have developed a working relationship with? We all know who we would rather deal with. The people you cold call for business may be small accounts that give you a lot of grief and are not usually worth the hassle. You never know what they might bring. Because they responded to you cold calling them then they might respond to another cold caller in the future. You can get their business with one phone call but you can also lose it with a single call too. This type of customer is looking for the best price. They are looking to save the pennies. You want customers that have deep pockets.
They are the ones that will spend big with you once they know like and trust you. The clients that you have targeted and developed a relationship with are the ones that will help to enhance your reputation. They will speak highly of you and may attract even more big accounts to your company. They are not going to leave you because they received a call from someone offering a discount. They will stay with you because you service their needs, take away the hassle and deliver consistent results. That has built up over time.
In all an Account Based Sales approach has many real benefits for a company of any size. To be able to secure the dream accounts that your team has identified and nurtured gives a feeling of immense satisfaction as well as increased benefits in terms of higher sales, lower cost and all the other things we have looked at in this chapter. To be a successful sales company you need to understand the things that will make the biggest difference to how you operate and then go out and make them happen.
Just take a few minutes to look back through this chapter and realize all the massive benefits that an Account Based Sales technique (when planned and implemented correctly) can bring to your business. Now tell me any business that does not want to experience all of these factors. Each and every benefit from the start to the finish of this chapter makes a real difference to the operating health of any business, especially a sales business and then even more especially to a Business To Business sales company.
The next chapter will look at how to implement an Account Based Sales approach in your organization. This will give you the guide to make all of this work. You have seen the potential benefits and what an Account Based Sales Development approach can deliver for a sales company so now you need to see how to set it all up, from start to finish. There are several factors at play here and one thing that you will always need to consider is the effect is all has on your team. So as part of the next chapter, we will also cover the following important elements-
- Prepare your marketing team
- Prepare your sales development reps
- Prepare your account executives
So let’s recap where we are now. We have seen how sales have progressed from the first sale to the Internet age. We have seen how modern technologies can get in the way of delivering the right results for customers, even if it does save money for the sales company. From there we have looked at what an Account Based Sales approach actually is and how it differs from working traditionally. We have also just looked at all the benefits of working in this way. We now understand why Account Abased Sales is great and what it can do or your company. The next step is to think about getting your sales organization ready to deliver this and be a success. It will put you one step ahead of much of your competition and give your company access to the benefits that Account Based Sales can give you-
- It boosts sales
- It lowers costs
- It increases the average contract size
- It brings in a qualified pipeline
- It gives quality leads
- It is an organized and professional way to do business
- It works on personal connections
- It makes things happen more quickly
- It is a measurable way of doing business
- As well as being measurable, it is accountable
- It allows the sales team (and others) to focus on what they do best
- It protects your reputation
Each and every one of these benefits will help to drive your sales company forward so let’s take a look together at how it can be done, in a structured and professional way.