To survive in Business you need to know the Fundamentals
The 21st century business philosophy requires a more ‘thinking’ rather than ‘doing’ approach to business development. We need to look at our customers / prospective customers in terms of their Life Time Value (LTV) rather than constantly looking for that one sale that brings in revenue to boost the monthly target. If we focus on LTV customers that are profitable for the business, this will sustain it long term.
So how do we win over these LTV customers?
The legendary marketing authors Al Reis and Jack Trout once said ‘A product or service that tries to appeal to everyone winds up appealing to no one’. What they were really talking about here was the vanishing mass market and how market segmentation was the way forward. In 21st century thinking, customers are now segmented and messages are targeted to meet their exacting needs.
Once we segment our customers into specific groupings, we can review our business at a much deeper level. In doing this we identify quite quickly, the most profitable segments to focus on. Where most business fall down is that they create sales plans based on area/location rather than sales plans based on profitable customer segments.
Focusing on profitable segments means that you get a higher value from a sales call and as the emphasis is all around the LTV of the customer, this encourages the sales person to build the relationship even further. Some companies may need to revisit their current Account Management Strategy and ask themselves two fundamental questions: (i) Where am I now? and (ii) Where am I going?
When you have answered these two questions, you can develop your Account Management Strategy based on profitable segments. Once you have established a base of LTV profitable customers, this will build a solid foundation for your business long-term. It is not about how many sales calls you make. It is more about how much it is costing you to make these calls.
Certain customer segments do not require the same level of attention as highly profitable customer segments yet most companies territory plans do not reflect this. It makes total business sense therefore to build your Account Management Strategy around your profitable segments. This is in line with 21st Century thinking and it will help you to survive in this ever-changing business landscape. For information on starting a new business, check out my marketing book The Cheese Mall that will help you hit the ground running in your first year with lots of helpful and practical tips.
Add your comment below!
Please note that comments are reviewed by the administrator prior being visible.