Imagine the situation. You have gone back in time and you can tell Henry Ford which parts of his advertising spend were the ones that made him the sales.
You can show him where to spend his money most effectively and how to use his resources to get the right customers to spend their money with him. This is what Account Based Sales can do for an organization. By tracking where the money is being spent and the returns it beings we are now better placed than ever to provide this information than at any time before. The information gathered will allow a company to become more effective and spend in all the right places. Account Based Sales changes the way that any company looks at their client list.
What exactly is Account-Based Selling?
Well, it is defined as a prospecting process that strategies selling to targeted clients for high value continued sales. It is looking at a client as an account, so you make many contacts at different levels within an organization. They all feel looked after, the company knows that you care and if one person leaves then you don’t have to start all over again trying to get the right contact. You have many contacts in that account, as they have many contacts with your company. This strengthens the ties between the companies and makes sure that you have the best chance possible to make that sale.
For example, if you had 1,500 clients that earned you one hundred dollars each then your annual income would be $150,000 per year. But the infrastructure needed to service these clients might be huge. You would need a sales force to interact with these clients and service their needs. You would need to take several calls from each client every year to answer any questions they had. If you were selling a product then you would have to make multiple drops to different locations in order to fulfill their demand. In short, you have the logistics of a large company but with the income of a small one. Your costs will be a huge part of your business and would stop you from growing or, in the worst case, send you under.
Now picture your business another way. You have ten clients that all earn you fifty thousand dollars each. Your annual income is $500,000. But it is not the change in income that makes a difference to your company. It is the vastly reduced expenditure that comes with servicing ten clients in an excellent manner as a pose to serving 1,500 clients in an average or mediocre way. The savings to the company are massive because you no longer need a sales force and a telephone team to cover 1,500 customers. You no longer need a website that will have to cope with a high demand at peak periods. You no longer need to deliver to scores of clients week-in, week out.
Always keep in mind the fact that your cost base will alter when you adopt an Account Based Selling approach. Although the way in which you do business changes there will also be a higher cost for the salespeople that you employ. You will now have high-quality salespeople that will connect with your target accounts will cost more in terms of basic salary and will also attract a higher level of bonus. Think about all the effects on your business as you plan and implement an Account Based Sales program.
Who Should use Account Based Selling?
This is what Account Based Sales can help you with. You now focus on dealing with the right clients that bring you in the good money. You develop this relationship over time so that there is an intrinsic value in the relationship that appeals to both sides of the equation. You get to spend quality time with a customer, become trusted and get higher value business from them. They know that they are being looked after, they trust and rely on your service and buy more from you as a result. As we have already looked at, this benefits both sides of the equation.
It has been said that an average company needs five people to sign off on a piece of expenditure before it can be formally passed and you get the contract. So that is five pairs of eyes, five levels of scrutiny before you get the deal. And this is where Account Based Sales comes into its own. Because your company has looked at the whole of their organization and made various quality contacts at different levels then the chances are that these five people needed to sign off a deal are already in the know. They have already been spoken to by one of your team and the relationship has been developed. You and your team have, in many ways, already sealed the deal because the people that have to put their name to that deal already know you, already like you and already trust you.
There was a time when a company had a single decision maker and it was the job of the salesman to find that decision maker and spend a lot of time and money in trying to secure their account. There were large budgets for entertaining key decision makers with nights out, trips away, tickets to shows or sports games, restaurants and drink. But business isn’t done in this way anymore in the vast majority of the world. The days of plying a decision maker with enough booze to get them to give you the account have gone. And they won’t be missed. Cutting edge sales companies can make the same deals in a more professional way.
What is needed now is a much more strategic approach that will get your company connected to all the right people in all the right places in the big accounts that will make a big difference to your sales. As we have looked at already before, a few big accounts are a much more efficient way of doing business than having hundreds of low-value accounts. Spending your resources such as time and money on the right accounts will make a massive difference to your bottom line and bring in much-needed revenue. Rather than throwing money at the problem of sales in a random fashion, the technology available today allows a small or medium-sized company to look strategically at the issue and devise an approach that gives the best chance of delivering results. That is the way that any business wants to operate.
Why Account Based Selling
So many small businesses fail, and they fail early on in their life as a business. There are different factors and if you talk to the owners of one hundred failed businesses then you will get a hundred different stories of how the business failed. But an underlying theme is the twin issues that face all businesses, but are particularly acute when it comes to a small business or a startup business –
- An inability to attract enough customers to the business
- Not being able to control expenditure levels against income
Business to Business sales is where Account Based Selling is most effective because you can generate those contacts that will help you to attract the high-value clients that will make a big difference to your company. It will also help to control expenditure because the cost of attracting, converting and retaining a quality client is much lower than the cost of trying to attract hundreds of low-value clients all at the same time. There are not enough hours in the day to look for every small opportunity that your company might make a few dollars from. To be able to spend in all the right places is by far the best way to go about making the most of the situation.
When you are looking to sell to another business there are many things in your path. As a startup business, you may have little or no contacts in a company, very little in the way of company presence, limited resources and a lack of marketing experience. But none of these things need to get in the way of developing the right relationships to get your company off the ground, connect with all the right people and to develop your sales. An Account Based Sales approach, if used correctly, allows you to overcome all of these obstacles and develop your business in the right direction. You can find all the right clients, make all the right contacts in those clients and develop the long-term relationships that will mean success for you and your company.
If you look at any organization then you can break down many of the functions as one of two things. Every part of the business falls into marketing or sales. The two of these are inevitably intertwined but in terms of the basic level of sales, we have either-
Marketing – the people that go out and find prospects for the goods or services a company sells.
Sales – the people charged with converting these prospects into paying customers.
Even if you are a sole trader then you can look at the activities you carry out in terms of these two aspects of the sales process. You either are looking for new customers or converting existing prospects into people that give you money in exchange for the goods and services you produce. In a large company, there can often be a disconnect between these two functions.
The marketing guys feel that they work hard at getting quality leads and the sales team should be better able to convert them.
The sales team feels that they work hard and they don’t get leads that have the quality they desire.
There is often a little discord between these two parts of the sales process.
Account Based Selling takes away a lot of this discord by integrating the process. Time is spent ‘warming up’ the prospects so that they actually have a strong expectation of buying when they arrive with the sales team. The days of handing over a telephone number and saying “give these guys a ring” are over. The work that a team puts in on developing a relationship with a potential client will pay dividends in the end. Many people in a large company will make contacts with many relevant people in their target organization. It then allows the sales team to talk to people who know what they do and know why they are calling. The hard work is done at the start of the process, rather than at the end.
So let’s take a look at the development of the Account Based Selling approach.