QUESTION MAP FOR CRACKING THE RIGHT TARGET ACCOUNTS
- Only 1 to 3% of all competitors in a mature industry are both most disciplined at execution (‘high performance cultures") and perpetual innovators. These gazelles will organically consolidate (not acquire and turn-around in an operationally excellent way) the bottom 50% + of their industry (the "living dead" or "extinction in motion"). They will typically grow at 2 to 5 times the industry growth rate and make 4 to 6 times the pre-tax return on total assets that the rest of the industry averages.
- If we crack these accounts and partner them, they will grow us and pay on time. But, we have to have a next-level, best value proposition; otherwise, why should they marry us or anyone?
- Another 5 to 10% of the mature competitors are not great innovators, but they work harder and execute more consistently then the bottom 90% of the industry. They will grow at about 1.5 times the industry growth rate and make 2 times the return. They too will grow us and pay reliably if we can partner them.
- 80% of all the future profit growth in our industry will come from 5 to 10% of the customers that are currently within the customer segments that we go after.
- If a sales rep assigned to an account has not cracked it within one year’s time, the odds are that they won’t do it. Non-performing big potential accounts should be reassigned every year. Sometimes a fresh person with some account cracking management assistance can make things happen.
- When a big potential account hasn’t bought anything from us, then we can try lots of experiments to get into the account, because we have very little downside risk.
- The bottom 50% of any territory will typically generate about 10% of the margin. These accounts should be routinely hived off of all territories to allow other sales reps to have a crack at them, or, for the small accounts to be cycled through a telesales maintenance effort. Such accounts will often respond to and buy more from getting 12 to 24 proactive phone calls plus fax-grams. It’s more attention and information at a lower total selling cost, than calling on them face-to-face 4 times per year. .
- Who are the good executing whales and gazelles that are not in our top accounts, but are within are #1 historic, best niche of customers?
- What criteria should we use to evaluate who are top 5 out of maybe 30 such accounts? (If after 6 months of total-team, laser-beam focused efforts initially chosen accounts aren’t giving us encouragement, then we can always bump one or two and add others. The list is flexible and dynamic, not cast in stone for one year at a time.)
- If we look at case studies of companies cracking and partnering gazelles, can we list their steps and generic methods as a blueprint for developing our own, home-grown, right-for-us capabilities? Stories to consider:
- P&G and Newell with Wal-Mart and not be like Rubber Maid and Disney
- GE Jet Engine division’s current wooing of Southwest Airlines
- My experiences with Cat in Peoria from ’74 to ’76 and beyond; FedEx in Memphis from ’76 to 78.
Who will be the "Champion" that spearheads the account cracking program? They will:
- What will be our new – assumptions, vocabulary, concept building blocks, and mental models – that we use to go after this category of account? (See annotated slide show # 8 -
- Do extensive background research boarding on corporate espionage.
- Author the initial Socratic question survey that titled personnel will use with Pooh-Bahs as high up the customer’s organizational chart as possible to get major, initial information and insights.
- Deploy ex-budget strategic resources to make beachheads possible within these accounts.
- Perhaps be the designated account cracker sales rep, (007) with a title, who calls regularly on the account
- What new raw aptitude talent and/or re-skilling training will we need?
- How much ex-budget, strategic funding should the Champion have for going after target accounts?
- Can we agree that our traditional sales reps who might have to share in some of the costs of doing extra efforts would be reluctant to invest their own money to crack accounts?
- In general, how should we re-compensate our sales force to:
- Pay less for account maintenance and lots more for account penetration.
- Allow for smooth reassignments of accounts amongst the sales force because the history and the bonus target levels go with the account reassignments, especially target accounts and bottom 50% that only generate 10% of the margin dollars in a territory.
- Considering that "A" accounts that would qualify for a sales rep selling demand replenishment concepts might have 24K per year or more in sales ($400/month in gross margin), how many outside sales reps do we really need?