Imagine that you were stranded on a desert island with one person of the opposite sex, more or less attractive, more or less compatible with you, more or less your type. You formed a romantic relationship over time (maybe more, maybe less – go with it – not the main point here…..).
In this case, you would probably be quite happy to be monogamous – there aren’t a of of other choices – right. In this case, the quality of the relationship is not going to determine if you decide to check other options.
Now imagine that you lived in a big city, but you were really uncomfortable doing all of the stuff that people need to do to initiate a relationship (dating, approaching people, etc.). In this case, it is very similar to the desert island, only the lack of impetus to find another partner is self-imposed.
Now imagine that we are not talking about dating, but rather sales. You only have so much time in the day, and so many client relationships you can manage. It is impossible to imagine having only one customer (even if you work with a big organization as a client, you probably deal with multiple people there), and it is hard to imagine having, say, ten million customers – so somewhere in between those two extremes there is a comfortable, efficient number of customers that we will call your maximum number of serviceable customers.
So here is where this all comes together: If you manage your clients like the big city lover who didn’t like the process of finding someone new when warranted, then you will tend to stick with what you have rather than searching for new, better clients. This will limit your success.
Go through this exercise. Make a list of all of your customers from the last year in one column of a spreadsheet. In the next column, write down the revenue from the last year, or calendar year, or whatever is accessible. Sort the spreadsheet from high to low by the value in the second column, annual revenue. Now, in the third column, enter the cumulative total of column two. Finally, draw a line at the 80% mark of the cumulative revenue.
If you are typical of the people I have worked with over the years, then what you should recognize is that 80% of your revenue comes from a quarter or a third – maybe a half of your clients – but probably not more. The old 80/20 rule tends to be right more than it is wrong!
So what about the other customers on the list?
You probably spend just as much time with them, maybe even more – maybe there are some “big names” there, and probably some pain-in-the-rears. If you get over your fear of generating new business (i.e. prospecting), then you can decide each quarter to lower your service levels to the bottom quarter of your list (or more) and replace them with better clients. NOTE: If you take me up on this, don’t forget to filter out clients you just started working with – they do need time to grow, and should be given that. Let your experience be your guide here, as every industry is a bit different in this respect.
Now some of the clients you will try to replace them with will be good, some bad (as measured by revenue), but if you go through this process periodically, then what happens is that the total revenue amount over the 80% line goes up. In other words, some of the new clients you get will be big clients, and over time those who used to seem big will get pushed down, and those who were always small will get pushed out – maybe to someone else in your firm, or to a passive marketing program, but off of your radar. Follow this process with discipline and your client base grows in revenue, but not in numerical size, such that it remains manageable. Don’t hang onto the clients you have because it is easier than going after new ones. Over time, some will leave by attrition, and your revenues will slowly deteriorate.
I am convinced that people stay in bad romantic relationships because it is easier than looking for something new, and facing the inevitable rejection that can come with that. If you do this in your love life, well, that’s really too bad – there are a lot of fish in the sea, and you should be happy in your relationship.
If you do this with your client base, you are letting your fear of rejection in new business generation keep you from making more money.
Now why would you do either of those things?
Authors note (AKA shameless plugs)
So, this 7-step sales process and associated topics…. Yup, I write about that a lot. I’ve been working with it since I developed it about 25 years ago – in my own diverse work experiences, with my teams when I had them, and with clients ever since.
If you would like to develop you own personalized and customized, highly effective and efficient B2B selling system, here are some further steps you can take:
The Salesman’s Guide to Dating is a free or very cheap (depending on Amazon) Kindle book that walks you through the sales process using the familiar analogy of dating. It’s a good, fun and quick way to get your mind around the whole process and how the pieces fit together.
Building Your Sales Process (BYSP) is a free and very thorough exploration of the same 7-step process that will walk you through the development of your own customized, personal B2B selling system. When you are done, you will know exactly what to do to get new business.
The Momentum Selling System® is an inexpensive but very robust online sales training course that is similar to BYSP, but goes deeper into the concepts behind each of the steps, and also helps you develop a plan not only for the 7-step process but also addresses mindset, repeat business and client base management.
If none of that sounds right, I do personal coaching and offer a free 30-minute intake session so that we can both learn if it makes sense to work together 1-on-1. If this sounds interesting, click over to the coaching page on this site and sign up for the free session.
Here’s to your success!