The majority of base accounts have nowhere near the revenue penetration that we both think they do, or desire that they have. On average, base accounts have 15-20% revenue penetration for the client’s spend in solutions and services that could be provided. Although many Sales Leaders acknowledge this, steps are not being taken that lead to greater levels of penetration, revenue, margin, and competitive dominance.
One of the key reasons for not achieving these significant benefits is due to the reliance on the “Usual Suspects.” These are the people and functional areas where relationships have been developed and there has been past success. For example, in the business of providing IT solutions, Value Propositions are continually provided to IT organizations. While it may make sense at first review, this approach is inherently incorrect. Many accounts suffer from a lack of political relationships with the “right” people. Not knowing higher level people with a very narrow concentration in familiar client functions.
Every business has four driving functions that dominate the political and power base. These are 1) Sales 2) Marketing 3) Finance and 4) Operations. Everyone else is concerned with enabling the driving functions. IT, Engineering, HR, Procurement, Legal, Administration, and others tend to make up the usual suspects. Unfortunately, they are continually presented with ideas and expected to sell them internally to the driver. As a result, many ideas and proposals fail.
The key to changing this predicament is to think of solutions in terms of business outcomes. Instead of creating and presenting solutions in terms of what they “are,” think of solutions in terms of what they will “do” for the client. Can we affect the client’s revenue, margin, customer acquisition, savings, market share, process improvement, or churn reduction? If the answer is yes, then outline the business outcomes of the solutions and work to quantify what the client can expect.
Once the business outcomes have been determined and there is reasonable quantification, the magic occurs in applying this to one of the four driving functions. Would Sales/Finance/Marketing/Operations be interested in this business idea? Who within these functions can be targeted? Can we create an agreement with the usual suspects to jointly build the story and help them become a more valuable internal partner for the drivers?
How much can be gained by changing the approach in translating solutions into business outcomes and working to present ideas to more powerful functions and people? If the average penetration is only 15-20%, what is the upside in revenue IF we can gain another 10 – 20 points of addressable share within the client base?
The amount of penetration within an account also doesn’t help protect against the competition. Every account on the base account list is also on the competitor’s business development list. Relying on the usual suspects leaves the business open to competitors who can flank the position and take existing revenue away. It’s simply a matter of time. There is nothing to lose by evaluating the existing base of accounts by established relationships and usual suspects. There is everything to gain however, and the clock is ticking.
Personal Challenge: Every day that you delay placing your existing base under an objective review is allowing your competitors to make progress in taking the business away from you. Take action beginning today on your top 10 accounts to help insulate yourself against the competition.