“If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” — Jim Barksdale, former Netscape CEO
A B2B client of mine was debating if they should invest time, money and effort in ramping up their account planning effort. Account planning is hard, and they had a great sales year in 2017, with the expectation that 2018 was going to be even better.
Their data said that 70% of their sales came from existing customers, and 30% from new customers. That’s a healthy ratio typical for established companies in their industry.
Before they cemented their decision to not invest time in ramping up account planning, I asked them to let us look at the data.
We analyzed the current and prior two years of sales data, and we discovered that in face yes, 70% of sales were coming from existing customers. However, we dug deeper and found the following:
They then realized that investing in strengthening account planning could deliver significant ROI. They decided to move forward based on the following assumption; they would develop at least one (1) existing customer in the bottom 100, to generate an average annual sales volume of $9 million.
By the way, their business is contractual with three-year minimum length. So, $9 million is $27 million over three years.
After 18 months they had developed three accounts from the bottom 100 that were generating an average of $6 million per year each. Total return on effort was 3 clients x $6 million = $18 million x 3 years = $54 million.
Again, account planning is hard and requires senior leadership and front-line sales leader commitment. However, there are few initiatives that a company can invest in that generate the returns you can achieve through account planning.
Is account planning important to your firm?