The possibility of a new account frequently creates both excitement…and stress. There’s a thrill that comes from a new prospect, especially one that has potential for serious earning potential, but that thrill is often accompanied by wariness and uncertainty. Is this prospect worth pursuing? Will the time invested in courting the account pay-off in the end? Here are some tips to help identify which accounts you should pursue, and why.
Communication is always vital. Dialogue between sales managers and sales representatives is particularly important—and there needs to be transparency. Additionally, there needs to be clarity about the desired outcomes both in the short-term and long-term, and macro vs. micro level. For example:
- What is the reason why the account is being pursued? Is it because the sales representative desires a “win,” or because there actually is a viable, valuable opportunity?
- Who are they key players in the account and what are their roles? What information will be critical and most meaningful to him/her and why?
- What does the buying process look like for this account? At what point should certain information or other internal resources be introduced and to what key account players?
Communication isn’t just limited to sales teams but to anyone who interacts with prospect accounts such as technical, legal, accounting/finance, customer service, and so forth. Sales representatives must also communicate with prospect accounts, since without these conversations it will be nearly impossible to win an account. Actively listening to needs, even those not expressly stated, can be extremely important in helping to find the right solution, product or service needed to earn a new customer.
Pro Tip: Pre-qualifying the viability of a sales opportunity may require extra effort to investigate and uncover answers—before as well as early in the sales the process. However, this can streamline the sales cycle as well as aid in productivity of sales efforts.
Know the Primary Resources at Your Disposal
Before you start pursuing any accounts you must take stock of the resources at your disposal. You have three primary resources to consider: time, money, and manpower. Each of your prospective pursuits will require all three, so you’ll need to determine how much should allocate to earn a new account, as well as how to sustain the account after you have earned the business. For example:
- Time is Money: Are you aware of how much time you want to invest going after an account before determining that you’ve exceeded the cost of acquiring a new customer?
- Need vs. Ability to Provide: While your cost to acquire the account was on budget, and your pricing was within reason, do you have adequate manpower to service the account? Or manufacture the products? Deliver the products on time and on budget?
- Price vs. Market Position: Even if your budget to acquire the account is reasonable, and your manpower is enough to sustain the account well into the future, is your pricing structure competitive? Alternately, do you understand how to best position your business prevent pricing objections before they happen? Is your value proposition clearly communicated and represented throughout the buying process? Is your brand (or company) reputation strong enough to win the business?
Pro Tip: Before determining whether to go after an account, establish four things: (a) The potential lifetime value of the prospect, (b) The cost you are willing to pay to acquire the account which should include actual expenses as well as time investment, (c) The likelihood that your organization can meet the current and future demands of the account, and (d) The position your company has in the market which should include your value, reputation, etc.
Know Strengths and Weaknesses of the Opportunity
It might be hard to admit, but all not opportunities are the right ones. Sometimes passing on an opportunity can be a smart choice, or can add credibility when speaking with an account, even if you don’t earn the business. For example:
- After speaking with the account’s key players, the account seems like it may be difficult to manage, (e.g. unrealistic expectations, unpleasant personalities, very demanding, etc.)
- The amount of profit margin is significantly reduced and/or the manpower’s needs are much higher than originally anticipated.
- In all honesty, a competitor’s product or service is the best fit based on the account’s needs
- There are some questionable comments or requests made (e.g. deceptive business practices)
- A recent transition in the account (e.g. leadership, merger/acquisition, public record notice, etc.) has shifted the viability of the account such as a bankruptcy filing or downsizing.
Pro Tip: Don’t fall into the trap that once an account has passed the “pre-qualification” process that the status won’t change. Always keep prospect accounts updated!
Weigh the Risks Involved
There’s always risk involved in the pursuit of a new account. You could expend your resources and get your hopes up only to lose your prospect to a competitor. There will always be a chance that something like that will happen, but to minimize the likelihood of a bad outcome, you need to know the risks involved. How much time and money would you stand to lose if you don’t win the prospect? Time spent pursuing a new account is time that could be used in a different way, so make sure this new pursuit is worth the risk. Once again, make sure you have a good vetting process!
Pro Tip: Make sure you know how much money you are willing to spend to acquire a new account, as well as how much money has been spent to date! This not only ensures that your organization isn’t wasting time pursuing accounts that don’t pan out, but ensures that the cost of new customer acquisition stays within budget!
It can definitely be difficult to determine which new accounts you’ll pursue. Between the time and money involved, the clamoring of sales representatives who need a win, and a competitive market, it’s often a stressful process. However, organizations that communicate well, take stock of resources, know the account strengths and weaknesses, and weigh risks, can keep sales prospecting highly productive.
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