In order to be profitable, you need to know which clients you should spend your time with and which ones you should let go. Because let’s face it, not all of your clients are helping you make more money. In some cases, it is best to let a client go so you can spend your time and other resources on a more lucrative account.
Use the Sales Leader Classification System we discussed in our previous article to help you determine which clients have the potential to benefit your business most. The key to understanding which clients to focus on and which ones to let go is being able to correctly identify and categorize each of your clients.
Playing Favorites
In the traditional sales model, you identify potential prospects, attract them and then close sales. Next, you get them using your products and engaged with your business. Once they have become engaged, you need to grow the accounts. This last step is where your time becomes crucial. Time is valuable and you need to use your time very wisely if you want to make your business more lucrative.
One of the biggest mistakes businesses make is failing to play favorites with their current clients. This may sound counterintuitive, because you value all your clients, but to really be successful you need to spend more time with the ones who have the most potential to help your business grow. In the Sales Leader Classification system these are labeled your Growth and Key Accounts.
Most companies make a huge mistake when it comes to classifying their clients: they assume their best accounts are the ones that are the biggest. The truth is that your best accounts are the ones that have the most potential. If you don’t make this differentiation you will end up wasting your time with clients who can never grow.
The Sales Leader Classification System will help you discover which accounts have the most potential by helping you classify each as a Maintenance, Key, Service or Growth Potential account. When you have this information you can spend the most time with the clients that are truly your best ones and will help you make more sales.
Divide Your Time Profitably
After you have analyzed your clients and classified them as one of the four account types, calculate how much time to spend on each in order to be profitable. For example, it wouldn’t be wise to spend most of your time on Service Accounts, because those accounts will not help you increase your sales.
I suggest you divide your Account management time as follows:
- Maintenance Accounts – 20%
- Key Accounts – 30%
- Service Accounts – 5%
- Growth Potential Accounts – 45%
I need to make a quick important clarification. You also need to be spending some of your time of new opportunity development. So when I say “Account Management time” I mean only those few hours that you have allotted to client work NOT the entire workday!
Spend the majority of your account management time with your Growth Potential Accounts. These clients have potential to grow and become more lucrative. When you foster these relationships you will increase your sales and your business will grow.
Next, you should spend about 30 percent of your account management time with Key Accounts, because these clients have high levels of engagement and potential. And as they grow they will spend more money on your business. Your Maintenance Accounts also deserve a substantial amount of your time because they have high levels of engagement and are helping you hit your sales targets.
Spend very little of your time on Service Accounts. The fact that these accounts have low levels of engagement and little potential means that they won’t help you increase your sales. If it comes time to let some clients go, Service Accounts are the ones to go.
Remember, you have to let go to reach out. I believe every business should be letting go of the bottom 10% of their clients each year in order to make room for better, more profitable ones.
The Sales Leader Classification System helps you identify which of your clients have the potential to help you grow and which ones you should let go. Once completed you can focus your time most profitable on the clients that will help you make more sales, and grow your business.