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Success by design, not default. At the start of 2018, that’s the message we’re communicating to all of our sales training partners in Edmonton, Calgary, Vancouver, Victoria and Toronto. Your ability to reach your 2018 sales targets should be determined by careful thought, planning and structure. While we will gladly accept the fortune of a good economy, great product or just plain luck, smart Salespeople know they can’t reach targets that way. Whether you are in B2C or B2B sales, here’s how a Sales MBO will give you the ability to start your year with confidence.
Management by Objectives (MBO) is the process of teaching Salespeople to create a strategic plan to reach and exceed their sales targets. I’m sure that everyone reading this would agree that hitting budgets gets tougher each year based on demands and expectations. Instead of complaining about it and feeling overwhelmed, use these tools to be successful.
Run a revenue report from all of your existing clients over the past 12-month period. In descending order, list your accounts from the highest billing client to the lowest. Take that number and multiple it by 20% to determine your Key Accounts. If you had a number of extremely small clients in the past year, you might consider eliminating them from this calculation to ensure you don’t skew your numbers greatly.
For example, if you did business with 100 accounts, your top 20 accounts would now be called your Key Accounts. The remaining 80 accounts are known as your Secondary Accounts. The volume of the 20th account is your Key Account Level.
You are now starting to use the principle of account management in working your book of business. Vague terms like big or large clients are too confusing to work with. What does a large client look like for you compared to another Salesperson in your company?
Your Key Accounts, your top 20 billers, should be responsible for 80% of your total sales. This would be the goal of an established Salesperson with a few years of a substantiated account base. It may take you years to be able to get close to this goal. Your Secondary Accounts, comprising 80% by number, should be responsible for 20% of your yearly billings.
Don’t be shocked if your account base looks more like the opposite. This is telling you that you need to work harder with your best accounts to increase their investment with you.
You now have a definition of a Key Account. It’s a customer that purchases no less than your Key Account Level amount. Don’t be surprised if the difference between your Key Account Level client and your highest Secondary is very small.
Look at the sales volume of each account you billed last year. What products and services did they purchase from you? Is there an upside to developing this account over the next 12 months for growth? What kind of growth is possible? If this is an account in jeopardy, then be realistic in your assessment. Estimate your sales volume on each account over the next 12-month period.
When determining your estimate, think about what you can do to strategically to grow the accounts. If you expect an account to bill less, focus on what you can do to minimize that loss. Your strategy per account is best defined as the plan required to reach the sales target you’ve estimated. What will you have to do to reach that target?
Now, consider what Tactics are required for the Strategies to be realized. Tactics are the action steps required for success. This is where many Salespeople fall short in their planning. They may develop strong strategies and unfortunately realize half way through the year that they failed to focus on Tactics with dates for follow through.
Many Salespeople (and business owners) focus the majority of their time in their business, doing what needs to be done on a daily basis. They forget to work strategically on their business where insight and pre-planning are required to ensure you’re going in the direction you wish to take – not the path your clients are pushing you toward.
Total the new sales projections on each existing account to determine your yearly projection. Reference this to your current sales target for the year. Any shortfall must be made up by new business development from Target Accounts that you feel meet your ideal customer profile. Look to business categories as a way of brainstorming on specific accounts you wish to pursue.
Follow the same procedure with Sales Estimates, Strategies and Tactics per account. Re-evaluate all of your accounts one more time to ensure you’ve been fair and not too optimistic or pessimistic on each. If you are still shy of your sales target for the year, meet with your Sales Manager and ask for his or her guidance. All great Sales Managers have been in this position before and using their experience is to your advantage.
Find out how each account is billing against your projections to determine your pacing throughout the year. Ask to meet with your Sales Manager for a quarterly review. He or she should welcome the opportunity to meet with a proactive Salesperson who is closely monitoring their yearly achievement.
Following this process is the basis of account management. It’s what great Salespeople do to constantly be aware of where they stand toward reaching sales targets. Your success will come from your careful foresight, advance planning and hard work.
Be aware that this is also a great exercise to complete on a company-wide basis. The revenue report is derived from analyzing all company accounts in a 12-month period. Should your business be interested in knowing more about this, please feel free to contact us.
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If you’re a Salesperson looking for cost-effective sales training, check out our special New Years Sale until January 15th! Our five-star rated online program The Sales Skills Incubator is $50 off at $149 Canadian including taxes. Our book SHUT UP! Stop Talking and Start Making Money is also available at Amazon for $6.99 Canadian.
Dave Warawa – PROSALESGUY