While New Business sales focus on signing the potential customer as quickly as possible, key account management’s target is to expand existing customer engagements. How can you combine these two opposite momentums for better profitability?
When first finding a potential customer, obviously they have got some type of need or problem. The qualification process evaluates type of need, when the business may take place, if there is a budget, our type of solution to their problem, if we may identify decision makers and so on. If all goes well sales management keep pace pressure on to close the deal in line with defined KPI’s so the sales rep can start focus on the next opportunity.
Hold on for a sec. Two questions;
- Was it the right customer need the sales rep went for?
- Didn’t the potential customer have more than the initially identified need?
The point is if there was any other need to fulfill that contained a higher business value for us.
Did the rep really take his time investigating the complete picture? Were notes taken about additional but more vague and indefinite needs or problems?
Sure, I definitely agree the blood flow in Hunting is pace and focusing on closing. The process for hunting is really focused from the initial segmentations; through the dating to the opportunity stages, just like the picture:
My point is that we don’t leave enough space for reflection in the hunting process. The KPI’s binds us to go on even before we are able to think clearly about our possibilities we actually have on a new potential client. By qualifying the need that comes up first so easy, it fits perfectly into the established checkboxes in our sales funnels and our VP Sales Management nods encouragingly when the opportunity quickly passes through the funnel to closing stage, valuing the reps’ expensive sales time to be spent on the next opportunities.
Unfortunately, of all life blood you have poured into the funnel, only one droplet is signed as an order. Stressed by the KPI’s for the individual sales rep, we are too blinded seeing the right opportunity – the one that end up our potential customer being an A-customer, not a B or C.
And we won’t let anybody else in. It’s my opportunity and potential client. There is no room for anybody else exploring any eventual larger possibility.
In Farming, it’s the opposite. The only thing important in farming is to expand the customer engagement in order to increase business volume. And it’s vital, since there obviously are no other engagements established than the initial one. The result is that the farmer, named as Key Account Manager, starts from scratch since there was nobody doing the farming in new sales. After kick-off the process starts with hand-over, usually digitally (but still no notes about any other needs!)
I think this is one of the reasons we sometimes combine the new sales and key account management in one role. The thought is good, however, it’s a poor compromise. A good hunter doesn’t have the mindset or patience needed for “administer” farming and the farmer isn’t equipped with blood taste in his mouth or new client radar in prospecting.
Going back to the theme of this blog post; what happened with all other needs or opportunities you may have been able to see, but not had the time or interest to act upon, during your first sale to a new customer? How can we have the “farming job” in new sales done? If the hunter already has been doing some of the farming job in the hunting process it would be a kick start for the Key Account Manager building his customer development plan.
Tightening the gap between the hunting and farming processes will expand your business value on the acquired client, which is a prerequisite for better profitability.
What’s also obvious is that New Sales is not measured in opportunities they aren’t focusing on. If there is no effort than just taking some notes, I don’t really see the point of not doing the farming job in new sales?
Some steps that are easy to start with may be:
- Make it easy to catch needs or opportunities, a simple form in a mobile device is a good advice – with very little effort needed
- Take time evaluating which of the needs that will be the first (quick) sale; note all other needs
- Hold the New Sales responsible for planning and performing the hand-over meeting. Don’t pay any sales bonus until the meeting is held
- Base one part of the customer development plan on the simple list in (1)
As always, it’s all about communication.