As I’ve mentioned in previous blogs, it can be all too easy for sales teams to spend all their time on smaller – and arguably, easier – customers. After all those deals close quicker and have fewer people in the approval process, which is a welcome relief from the risks and complexities associated with high value customers. However, for sales leaders, high value customer wins are often the key to meeting or exceeding target, so having a team able to ‘think big’ is crucial. Achieving this is tricky, though. In this two-part series, I’ll be covering the key methods that can be used to shift the sales team’s focus towards higher value customers.
Define ‘High Value’
Before we take a look at ways to influence mindsets, it’s important to take a step back and lay the foundations first. In the 30+ years I’ve worked in the sales field, one of the crucial things I’ve learnt is to define ‘high value’ to the team – everybody knows then what to expect!
In sales the transaction value is often used as the leading metric to categorise a customer. For example, those in excess of $10 million are certainly likely to qualify for the large value category. However, in the world of outsourcing or for huge systems integration projects, customers of this value are relatively common, so how can the team be certain which customers warrant more attention? Therefore, a finite monetary value range is less useful as a guide.
This becomes further challenging when we also consider that the figure viewed as ‘high value’ changes dependent on the length of time a tech vendor has been in business. Why is it that what is considered to be a large value deal, in the first two years, of an enterprise tech vendor’s evolution, becomes superseded by a “norm” of 10 times larger in its subsequent years? In fact, there is an accelerating curve upwards of the value of (what are considered to be) high value customers that a vendor wins, proportional to the length of time it has been in business. This question is even more intriguing when we consider that the technology is largely the same or identical in those early years, as it is in the later years.
More than money
We need to find a reliable way to define an outlier -the high value potential customer – one that deserves special focus and attention. I would argue that a better metric would be to define ‘high value’ as any customer that will potentially spend X times more than the current average deal size. In this case, X could be, for example, 10 or 20 times larger than the average. This is a more effective metric, since it is an indicator that the customer merits special attention, resources and equally may imply a longer sales cycle.
So, once you’ve created a clear definition of what a high value customer looks like for your sales team, how do you help them shift their focus to these opportunities? Check back next week for my top tips.