We're partially through the 4th quarter of the year, and as planning is in the works for the following year, it’s a great time to do an account review with your team. After all, their success equals your success, so it’s vital that you help them set a strategy that helps them meet their goals.
Many are familiar with the Pareto Principal which states that 80% of your business typically comes from 20% of your customers. We often forget what a large contribution those top 20-25% of your client base adds to overall revenue. As clients start seriously thinking about next year, now is a good time to strategize with each member of your team to make sure they are maximizing their efforts. Creating an Account List Management System (ALMS) based on the Pareto Principal is a proven way to help grow and develop existing clients while developing new ones.
Here are some tips to help you implement the ALMS with your sales organization:
- Generate a top-down listing of all clients, local and national, for the last 12 months. Edit the list so that each client appears only once on the list (combine any duplicates as needed).
- Determine the “key cut-off” by counting down through the top 25% of the number of your clients. For example, if you have 500 clients, the first 125 accounts are the top 25% (500 x .25 = 125). The key cut-off is the dollar value of the smallest account to appear in the top 25%. So, in our example, if account number 125 (out of the 500) spends $50,000, then $50,000 is the key account level.
- All accounts above the cut-off are key accounts; all those below are secondary accounts. Until the next review, this cut-off will determine which clients are considered key accounts and which are secondary.
- Give each salesperson a list of their own accounts in order of their billing for the last 12 months, showing which are designated as key and secondary
- Meet with each seller to determine the appropriate number of target accounts for their individual list (not more than 9, usually 3-4 is better). Have the salesperson identify their target accounts and up to 10 leads.
Make sure to maintain and update the list as needed, and use the account list management strategy designations on your CRM to ensure high focus on key and target accounts. Repeat this process and set a new key level every 6 or 12 months.
Implement this strategy of dividing customers and prospects into categories and prioritize by low/high priority. This will ensure you are providing your sales team with focus and direction and get them on the path to improved sales performance through their ALMS.