Do you know where 80% of your revenue comes from?
Most businesses would say they have a way they manage and prioritize their accounts, but few of them do it in a way that is strategic, consistent, and is woven into every sales decision they make. Leaders who have a strong Account List Management system should prioritize the following:
- Retention of current customers
- Growth of current customers
- Development of new customers
Basic Account List Management Categories
To add focus on these elements, the most successful firms employ an Account List Management System (ALMS) based on the Pareto Principle built upon the theory that the majority of revenue comes from the minority of customers. Segmenting customers and prospects into categories and prioritizing both by spending level or spending potential provides the organization with focus and direction.
Here’s an overview of basic ALMS categories:
- Key Accounts: These high-priority customers! They usually represent the top 20-25% of your customers and account for 75-80% of the organization’s revenue. These customers are extremely important and should be treated accordingly. It is also important to remember one firm’s company’s Key accounts are another company's top new business prospects—treating these customers like royalty is a critical part of any sales organization's success, growth, and, in many instances, leadership survival.
- Target Prospects: The most successful sales teams have each seller have a short list of 5-10 new business prospects to pursue using a focused new business development approach. New business development time is limited, so prospects—or target prospects—should be scrutinized and selected wisely using a filter that includes the following:
- Spending potential
- Access to the decision maker
- Product fit
- Secondary Accounts: Low-priority customers represent 75% -80% of the customer count, yet only 20-25% of the organization’s revenue. (read that again and think about your business. If you currently working a ALMS, I bet your sellers spend the majority of time with these Secondary accounts. These small spending and often-needy customers can suck the life out of an organization because too much time spent here leads to neglect of key accounts and new business development. Simply put, the secondary account time suck is the silent killer of many sales people and teams.
- Extra Prospects: Think of these new business prospects as target prospects of the future! A list of 10-15 targets in waiting is a wise investment.
Simply put, a properly executed account list management system serves as the operating system for the organization. With one, things run smoothly, time is spent wisely, and your top clients stay because they feel the royal treatment. New clients join because they want to be part of the club!
Without an ALSM is like trying to run a PC without Windows.
