increase sales

 

 

 

 

 

How many of your key strategic accounts grew more than 25% last year? How many active opportunities at large key customers is your team working on? How proficient is your sales team at conducting a needs assessment with your key strategic accounts? Is this something your key account managers do frequently, on going or once per year? The needs assessment is the next key piece of the puzzle in fixing key account sales problems. Everything after needs assessment is about solving the problem identified in needs assessments with solutions you can provide.

 

I was asked to help a family run business fix a sales problem. They just learned they lost a large amount of sales at their top account and this account represented over 20% of the total revenues. This large account was their anchor account. It gave them the ability to negotiate competitive raw material purchase agreements. It gave their plants manufacturing efficiencies. Their president asked me to lunch to share the sales problem and discuss how I can help.

 

Very quickly the discussion turned to how do we target and new accounts to make up for this huge unexpected loss.

 

He was asking me a lot of questions:

 

How do you determine new accounts to target and why?

 

How long will it take to open and grow these accounts?

 

How many accounts do you think we need to target to make up for the recent sales loss we just experienced?

 

Where do we get new account lists and how much should we expect to pay for them?

 

How do you suggest we structure our team so we are focused on bringing in new business?

 

What compensation plan designs have you used to drive net new customers?

 

I heard you are good at finding and opening new markets for current products? How long does that process take?

 

I see you have experience helping companies grow internationally? What does that process look like and how long will that take?

 

I said I would be happy to answer all these questions and more but first tell me more about the large anchor account you lost.

 

He shared:

We have served this customer for over 40 years and I thought we had a great relationship. They have toured our facilities over the years, we have supplied them high quality products and we have a strong relationship with the buyer. Every year we helped support their company golf outing and global sales meeting and trade shows. We have invested in new production equipment and processes to meet their growing demands over the years.

So what happened? Why did you lose the business?

We received their projection for the next calendar year and we noticed the majority of the key products we supplied them were not on the projection. We called and asked our buyer and she shared they were no longer manufacturing the machines those parts supported but there will be some small aftermarket orders. We did nothing wrong their business and market changed and unfortunately the bulk of what we supplied them was for products they were discontinuing based on their customer feedback.

How do you manage large accounts like this?

We have teams of people that keep this customer happy in quality, production, design and so on. We have a strong engineer who has been with our team for over 25 years who manages this account from our corporate office and he has one of the top independent representative firms, the firm that opened the account for us years ago and services the account.

When was the last time your team did a needs assessment for this customer?

 

[Silence …and I let is hang there as long as he would let it while I enjoyed my salad  ]

 

Well …as I said we have serviced this customer for years and the buyer as well as his design team has been in our facilities. They know what we do. I can assure you if there was a project they were working on we could have helped them with it would have come our way.

How often do your salespeople conduct key account needs assessments? Is it an ongoing process or something they do with accounts early each year?

I am not sure, I assume we are always listening for problems we can solve but I will have to get back with you.

But lets get back to my questions, how long is it going to take to make up these lost sales, I owe our owners and our board a plan.

A key part of any key account management process is constantly assessing needs and designing solutions to solve customer challenges. Many key account managers are excellent at building and leveraging relationships in accounts and managing large amounts of data to give the customer excellent service with their orders. Where they often feel uncomfortable and fall short is asking for unresolved problems. They worry these questions may somehow hurt their relationship when in reality solving customer unresolved problems builds their relationships to that of trusted advisors.

 

Where a number of teams struggle is in needs assessements.

 

We need to be asking questions and finding customer unresolved problems and the problems we find become our future sales growth opportunities to fuel our future profitable sales.

 

We need to build relationships wide and deep in our key accounts so we have our ear to the ground constantly listening for problems that need to be solved.

 

Our key strategic account managers need to be able to share stories, success stories we have with other similar accounts to open opportunities at their accounts by often challenging the way we do things around here.

 

If your team needs questions to ask, there are a number of places you and your team can find questions to have meaningful conversations with customers to discover unresolved problems at your key accounts.

 

MTD Sales Training published 450 sales questions

 

Hubspot Published questions 

 

Mycustomer published 100 questions to uncover customer needs.

 

The sales Blog published great questions to determine customer needs. 

 

The Center for Sales Strategy Posted questions here and here.

 

Once your team finds 5 questions they feel comfortable saying they will need to customize them to your customers and products and or services.

 

The sales process revolves around what you do, what you learn and what you find in needs assessments.

 

Every customer situation will have different requirements for needs assessments.

 

To make the questions more powerful, follow questions with suggestions (trial solutions) about what might solve the problem based on similar customer success stories. This technique could sound like this:

ARJ Corp had a similar had a situation, and they used our 132457 products and it resulted in saving them over $160,000 per year….do you think that might work well here for you?

 

By offering these success story examples of how you have helped other similar customers with similar problems as a part of your needs analysis questions, you are getting your customers to think creatively while also planting future product seeds and the value they can have on your customer’s bottom line.

It is a best practice to give your accounts options to solve the opportunities discovered in the needs assessment and let them feel ownership in choosing the right solutions.

When I have trained key account managers over the years I suggest the following:

1. Build and leverage your relationships with key accounts.
2. Create a relationship matrix in your key accounts and note who you already know, just met, and people you need to know
3. Constantly be listening for opportunities.
4. Conduct a cadence of needs assessments with your customers quarterly. Pick a week each quarter , put it on your calendar and spend the week asking needs assessment questions with your large key strategic accounts.
5. Log everything you discover , even if they sound like problems we do not solve today, in the CRM.
6. List and rank the needs you discover based on size of opportunity, time, your current capabilities, and impact to the customer’s bottom line.
7. Treat each opportunity like a project and develop a project plan with phase gates you and your customer develop together.
8. Decide how you both will monitor the projects.
9. What will your communication cadence methods and frequency be?
10. Understand how the customer will judge if this project was a success

 

Lets get back to my lunch….

 

I agreed to help this company and the first thing I asked to do was meet with the customer that just lost so much business and conduct a needs assessment. The president felt this was a waste of time and only agreed to this strategy if I would agree to design a new business development plan for his team as well.

We spent just under a week meeting with all the contacts this client developed over the years and found a number of current problems we could solve. We also discovered a new design project for the products replacing those being discontinued and offered our help with added value engineering and the customer agreed. We won a number of projects and won about 60% of the new part designs in the future projects.

We used a similar process at all their key accounts as well as voice of the customer research and more than made up the sales shortfalls.

Results?

New business development: over new accounts 200 in 18 months

New account sales as a % of total sales grew to 22% of total within 4 years

New account profits were on average were 6% higher than current accounts

Opened a new market it contributed $4 million in the first 12 months

I am still in contact with that team through LinkedIn and the projects we won at that large key customer eventually grew to far exceed the proposed shortfall. One of the 200 net new accounts grew to over $5 million and is expected to reach $7 million in 2019. Oh and that new market we found that really valued my clients capabilities? I understand it is exceeding $12 million and should hit $15 million by 2020. ( at 60%+ gross profit margins)

 

The needs assessment process is a critical part of the key strategic account management process.

 

How about your team…..

Does your team conduct formal needs assessments?

How often? (are you sure?)

Does each of your key account manager s have strong open-ended questions to discover unmet needs?

Do your key account manager know how to leverage success stories at other customers to uncover opportunities at their accounts?

It is a best practice to give your accounts options to solve the opportunities discovered in the needs assessment and let them feel ownership in choosing the right solutions.

In the next post we will discuss how to develop key strategic account growth plans.