This story begins more than 40 years ago. I was a brand-new salesperson, green as the grass and straight off my company’s training program. The boss took me around to visit my new territory; it was a weeklong whirlwind tour that covered all of the major customers and distributors.
Companies in literally every industry—from banking and finance to consumer goods—experienced greater success if they carefully defined their ideal target customer.”
I can still remember that Tuesday afternoon. We spent the morning with a major end user and the afternoon calling a specifying engineer. Toward the end of the day, we visited my largest distributor. We toured the warehouse, looked over the fleet of delivery trucks, walked through customer service and ended up in the manager’s office.
We volleyed the normal chit chat. He asked where I grew up, about my schooling and hobbies and if I play golf. The distributor’s top salesperson stopped in. We had lots of things in common. Everything was going well. Then it happened. As we were leaving, he turned to me and said, “Give me a call sometime next week. We should get together and target some accounts.”
True confessions here: I had no idea what he meant by “target some accounts.” But, being young, bulletproof and overflowing with self-confidence, I mumbled something and headed out the door. Later that next week, I phoned him, and we did our “targeting.” In this instance, targeting meant joint calls and not much else.
Now jump ahead 26 years.
I had been invited to observe the “targeting session” of a friend’s business. We had previously discussed his specialist process and plans for driving success. The plan was simple—break down barriers around every salesperson’s territory, maximize use of his specialists and pull in support from vendors. The 50,000-foot view of his plan was this: hold a quarterly meeting to serve as a vehicle for his salespeople to brief each other on their accounts. Each specialist was charged with driving a specific slice of the business forward. Vendor partner reps were similarly working to maximize sales. By putting the three groups together in a controlled environment, he hoped to get the juices of cooperation flowing. He called this targeting. And his people called it targeting, too.
A large conference room was set up with tables around the perimeter. Specialists and vendor reps sat at the tables. The salespeople traveled around the room in 20-minute increments talking to each group. By the end of the day, every salesperson met with every specialist and vendor.
I spent my time eavesdropping on the various groups. I followed a couple of salespeople through several of their meetings and I sat at the table with several specialists and the local sales team of supply partners.
That day, I heard the term target used at least a thousand times. But something was amiss. I heard multiple definitions of the word. Here are the main definitions of “target:”
- I have never been in the door of this account but suspect they might buy something from us.
- A good place to make a joint call. The sellers planned to introduce the vendor reps to contacts at their biggest account with no real plan.
- Making an extra number of sales call visits to a group of customers.
- A good place to launch a new product. This one was mostly tied to doing lunch-and-learns or conference room-type presentations.
Everyone gathered in that room seemed to have a different definition of the word target. At the end of what really was a grueling day, we met up in one of the local watering holes to celebrate. I asked my friend if he considered the meeting a success—he thought it was. For him, the targeting exercise was about getting his people in the same room with specialists and suppliers and forcing them to talk. Could this be yet another fallback definition of target?
My questions:
- Would targeting be more successful if it was better defined?
- How can targeting be a success if we can’t define it?
Recently targeting reentered my consciousness. As I researched a marketing-related topic for a client, I ran into an article that intrigued me. The article outlined research on companies with a detailed, perfect prospect targeting process in place. Companies in literally every industry—from banking and finance to consumer goods—experienced greater success if they carefully defined their ideal target customer. The results—companies defining this profile upfront met their financial goals with 47% greater regularity than their competitors.
Think of it, a 47% advantage in all kinds of businesses and economies. How could we ignore this record of success? Would the concept work in knowledge-based distribution? The thought bounced through my mind a hundred times a day.
As an industry we need to set some definitions. Throughout the whole of our industry, there are dozens of meetings tied to the sales process happening every day; many of them involve distributors and their supply partners. The lack of definitions creates wasted time and effort and eliminates opportunities for improving sales outcomes. Worse yet, when distributors and their supply partners use the same term to describe dissimilar intentions, one or both companies may lose money, and in some instances cause damage to their business relationships.
As a service to our industry, allow me to create some definitions:
Prospect/Suspect: Prospects are accounts that we do not know well; we may not know them at all. We suspect that they may have a need for a product or service, and we believe that they are at least worth exploring. A prospect might come by way of data mining, purchasing a list or may even be a business you noticed while taking a shortcut home. How does a company become a target? We need to understand if their business philosophies and needs match our own.
Auditioning: Auditioning accounts are those for which we have explored and clarified their use of and needs for our products and services. We successfully identified that they do indeed use our products. We have broken the ice and made a few sales. However, we still don’t know several variables important to our business. Do they place a value on the services we provide along with our products?
Targets: Target accounts are customers whose behavior aligns with our business goals. They have potential for growth. We have verified the account has need for us, their behavior is in line with our sales process and our efforts will be rewarded. Most of the time, we have a relationship and nice chunk of their business.
How to interact with supply partners. The economic realities of today’s selling environment require closely coordinated activities between distributors and their partners. Setting these definitions is an important part of the play. Each type of customer requires a different approach.
Prospect/Suspect: The interaction between distributor and supplier should focus on information exchange. Here are topics of discussion:
- Exchange names and other information tied to the customer. If either seller has a contact within the company, a joint call might open the door for exploration of buying potential.
- Manufacturer provides leads generated via national marketing programs.
- Distributor marketing focuses on attracting customers via training events, open house tradeshows and other connections.
- If the customer is part of a larger organization, the manufacturer provides information generated in other parts of the country.
Auditioning Accounts: Both distributor and supplier are in the information gathering stage. Planning should involve the following:
- Gather information required to move the account forward.
- Analyze the business being handled to get insight into how the customer is applying products.
- Identify incumbent competitors. Do the sellers know anything about the behavior of the competitors?
- Build plans for “bumping off” weak competitors.
Target Accounts: This group of accounts is the absolute bread and butter of the sales effort. These are the accounts you know best by understanding their needs, processes and people. Sales experts tell us selling to this group is five times easier than a new account. Many distributors refer to the efforts here as “gaining wallet share.” The planning should follow this path:
- Identify products that are not currently being sold by your combined organizations (distributor and supply partner).
- Identify new products that could impact the customer’s overall operation.
- Establish a strategy for finding the proper person/people to present your new product.
Targeting pays off on new product launches. New product launches are extremely important to our supply partners. Countless conversations with manufacturers point to one thing; distributors who excel in this endeavor are seen as the crown jewel of the supply chain.
When a new product launch is underway, every distributor salesperson should be asked to identify their five best targets for the product. Using what they already know about the customers the sellers should select a handful of customers most likely to want to buy the product.
An experienced salesperson knows enough about their customers to predict their interest—to the point that 60-80% of their targets will decide to evaluate the product. For new sellers, going through a process like this provides the sales manager with solid coaching tools to improve the new salesperson’s skills.
By prioritizing and converting just five target accounts, the distributor achieves better inventory justification and success stories that can be employed with other customers (i.e., the auditioning group). Enthusiasm will ultimately grow within the sales team; the product launch is a success.