I can always count on staffing discussions redirecting toward an assessment of sales capacity. This may occur when discussing overall team staffing levels in leadership meetings or in individual salesperson work plan reviews. Inevitably, we will discuss the challenges in attending to all the customers the sales team must manage and the time barriers to developing new business.
This is where Customer Segmentation comes to the rescue! Segmenting the customer portfolio drives focus for us and our customer team members. We want to devote our finite resources on our most strategic customers that disproportionately deliver our business objectives. This is the 80/20 Rule in full effect.
So how do we define a strategic customer? key principles in customer segmentation include:
WARNING: In my experience, your largest customer does not automatically make them your most strategic customer.
This does not mean that we ignore the less strategic customers. My suggestion is that we apply the appropriate focus to the customer based on their contributions to our business objectives. I adapted a famous saying from the book Animal Farm by George Orwell: I love all customers equally…some more equally than others… Although Animal Farm is not a book on selling, it has lessons we can apply to our commercial endeavors.
One of the reasons I purposely reinforce the saying “I love all customers equally…” is remembering a conversation with a sales rep calling on a very important customer. This sales rep told me that he despised the economic buyer and would prefer to not call on her. That startled me. On a personal level, I don’t think I despise anyone…at least I don’t recall anyone I would put into that category. On a professional level, my business success (and his) required a constructive relationship with the buyer, which he did not have. This experience set a cornerstone of my beliefs and teaching in customer centric relationship management – we strive for respect and rapport in every interaction with every customer.
The reality though, is we need to love “some more equally than others.” If we attempt to service all customers equally, we will service our most strategic customers at the same level as our least strategic. And conversely, our least strategic customers will receive the same service as our most strategic.
The completion of Customer Segmentation is not the end point – now the fun starts! With clarity on which customers drive the business and what makes them strategic, we need to learn how to be their most strategic supplier as well. Ideally, our most strategic customers will also see us as their most strategic supplier. Often that is not the case, requiring our customer action plans to include account penetration and strategy alignment to tailor and differentiate our offerings.
In my experience, this is not a one-size fits all approach. Our role as Key Account Leaders is to identify those unique value drivers and differentiated offerings to co-create a mutually beneficial Joint Business Plan with the customer. For example, I had a customer who required CFO participation in the customer team, as we worked financial issues and line of credit expansion to grow mutual business. Others may require a stronger R&D collaboration, supply chain alignments, or perhaps marketing partnerships. Every customer has unique requirements and expectations for their most strategic suppliers.
To revisit the original staffing challenge, the power of Customer Segmentation is to free up capacity to focus on our most strategic customers. As we learn in Coaching to Win™, the Priority Setting Matrix directs us to schedule this IMPORTANT yet Not-Urgent work. Otherwise, we may find our day exhausted by the Urgent and less-Important tasks and activities. A very dear friend used to say his most strategic customers were his first thoughts when entering his office in the morning. He reviewed their purchases, attended to their follow-ups, and made sure he was preparing for their next engagement. With this completed, he then addressed other customers and administrative activities.
Ascend has recently completed the design of our Key Account Leadership workshop. Note the use of “Leader”, not Key Account Manager. This workshop brings the leadership components of Coaching to Win!™ and the Customer Facing aspects of the Innovative Selling Process™ into a comprehensive roadmap to win with your most strategic customers.
If you would like to learn how you can:
Feel free to sign up for a no-obligation 30-minute review of your challenges and possible actions we may take to overcome them by pressing the “Get Started” button on LinkedIn or “Let’s Talk!” button on the AscendCommercialSolutions.com website.
Happy Selling!
George
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