Account Classification: Three Types

Managing your account base is often a question of maintaining existing customers and finding new customers who are most likely to buy, then engaging your resources to maximize the opportunity. However, some accounts are more profitable than others and let's face it, profit drives your business. You must maximize your returns by satisfying the greatest number of profitable customers. Return can be measured in a number of ways: ROI (return on investment)—the amount of money and time spent on an account; ROE (return on energy)—energy expended to secure the account; ROO (return on occasion)—leads or referrals you get while golfing or participating at an occasion outside normal selling activities or selling hours. ROO extends your limited selling hours and ROT (return on your time equity)—asks how wisely are you spending your allotted time.

Not all customers have the same buying potential. The portion of unprofitable accounts is usually greater than you think. I remind you of the 80/20 rule: 80% of your sales come from only 20% of your customers. Therefore, sales entrepreneurs need to classify customers on the basis of their sales potential, to avoid spending too much time with low-potential accounts. Remember, there are only 1,760 selling hours in one entire year. We can't afford to be busy servicing unproductive, unprofitable accounts. Don't be fooled by revenue numbers. Revenue alone doesn't keep a business afloat, profits do. Pricing your product or service at or below cost is not smart business, but many sales representatives are seduced into a quick sale where profit is sacrificed for revenue. Your business must be managed by utilizing all of the resources at your disposal, maximizing your return in the most productive manner. To that end I offer a very simple account classification strategy: the ABC analysis. It's not new but it certainly works. Use this method to evaluate and classify each of your existing and potential accounts.

A Accounts
Your A accounts deserve the most attention. Here's why:

They have high potential return: (ROI/ROE/ROO/ROT)

They require minimum invested time

They are low maintenance

They are cooperative if problems arise

They have a high contribution based on margins/profit

They have a short sales cycle

B Accounts
B accounts are not quite as attractive as your As, but certainly worth pursuing. Here's why:

They have good potential return: (ROI/ROE/ROO/ROT)

They require a high amount of invested time

They have higher maintenance

They are patient with problems

They have a good contribution based on margins/profit

They have a longer sales cycle

C Accounts
I fondly refer to a C account as "a pain in the asset." C accounts usually distract you from your A and B accounts, offering little or no return for your investment. Here's why:

They offer low/no potential return: (ROI/ROE/ROO/ROT)

They require an excessive amount of time

They are high maintenance, lots of babysitting

They are impatient when problems arise

They provide minimal contribution based on low or no margins/profits

They have very long sales cycle

These accounts are literally a pain. They whine about this and that, finding the darndest things to complain about. In spite of your efforts they are never satisfied.

As you classify your accounts, I strongly recommend you continue to work closely with your As and Bs, and toss your Cs. That's right, get rid of them. With limited selling hours, you can't possibly maintain C accounts as well as service your As and Bs. Remember, C accounts are a major distraction to your core business accounts. By responding to or pursuing C accounts, your A/B accounts could inadvertently become a silver platter opportunity for your competitor. In most cases the neglect is unintentional but the consequences can be dire. This is a chief cause of lost customers.

However, be aware of potential changes in account status. A C account today may become an A account tomorrow. Likewise a B today may become a C tomorrow, and so on. There is no universal grading system. An A or B account in your territory could well be a C in another territory. Each territory has its own unique account classification parameters.

Here is a fact that may help guide your thinking as you manage and grow your account base. It costs your employer approximately $200 to $300 for every sales call you make (based on approximately one hour of actual selling time). Now let's add $200 for the customer's time and we have a $500 sales call. Not many salespeople think in terms of cost per sales call but as an entrepreneur, you must ask yourself, "Is this call worth $500?" It becomes clear that time with a C account is not only unproductive, but very costly.

Once you have determined that an account has a C status, don't be too quick to abandon it. Four options are available.

1. Use them to practice. Where do most salespeople practice and refine their sales skills? Usually when they are sitting before an A or B customer. Not a good plan. Practice the steps of your Sequential Model at a C account. It's a win-win situation. If you screw up, the customer won't want to do business with you anyway. The big win is that you took a step closer to refining and polishing your skills in a low-risk situation. Practice makes permanent—no different than a professional golfer hitting hundreds of balls at the driving range. A C account is to a sales entrepreneur what a flight simulator is to a pilot developing a new skill.
2. Double their price. I don't necessarily mean literally double it, but certainly a price increase may be appropriate. Visit or call your C accounts with their revised pricing in your hot little hand. No doubt their reaction will be, "Look at this, you increased my price." Your response is, "Yes, I know." The revised price represents the lowest point at which you will do business with them. It's your line in the sand. Anything lower and you are simply not interested. The upside can be rewarding. If they accept your revised price, you now have a B or an A account. It is surprising how often they accept the revised pricing—and if they do be sure to nurture them to a solid B or possibly an A account.
3. Another response you may hear from a C account is, "I can buy it cheaper elsewhere." That could very well be true and the natural tendency of a sales representative is to reduce the price until the customer agrees to buy. However, if the customer is unhappy with your lowest price-point, I suggest you use Lee Iaccoca's line: "If you feel you can get a better deal elsewhere, then buy it." It communicates confidence in yourself and your proposal and quite often customers will reevaluate their decision. Customers today appreciate the old adage, "You get what you pay for."
4. Clean deal. Logic tells us that with limited selling hours we simply can't extend your C customers the luxury of a personal sales call. Explain to them that their situation does not justify or warrant a personal visit. You will no longer make the one-hour trek to visit them. It's simply not a good validation of your 1,760 selling hours. Inform your customer that you are prepared to sell to them, but without direct representation. However, the condition of doing business is that you redefine the rules of engagement. These would include pricing, a delivery schedule, minimum order quantities, and payment terms.
5. Once both parties understand the new arrangement, invite them to place orders with your order desk or inside representative. Or they may want to send you an e-mail order or leave a voice mail. This approach can be effective and represents a clean deal for both you and your customers. Also, it can be an additional revenue stream that contributes to your monthly, quarterly, or annual targets.
6. Fire them. During my years of selling I have never seen a concept so openly embraced by the business community. Fire C accounts. Companies are no longer tolerant of the aggravations and frustrations C accounts bring. Case in point: I recently called on one of my national accounts and asked how his morning was going. He said this, "I spent the morning deciding which accounts to fire." This comment echoes the sentiments of corporate executives. Sales managers have typically challenged salespeople to close every possible account within their territory. They constantly ask, "Are we doing business there and if not, why not?" Managers should now be asking, "Why are we doing business there?" I encourage sales managers to challenge their salespeople—ask them to validate, with sound justification, why an account is doing business with them. Just because an account resides in your territory doesn't mean you have to come hither to their beckoning call. You can pick and choose who qualifies to do business with you. Establish the parameters for your A and B accounts and know what parameters flag a C account. I recently made a sales call and the manager I was visiting had an interesting analogy. The company was in the process of "demarketing" its account base. It was eliminating the Cs and focusing on its As and Bs.

Firing an account doesn't mean pursuing an unprofessional, unceremonious approach. It means engaging in an open, honest dialogue with your customer. It could be as simple as saying, "Although we have both explored the possibility of doing business together, it appears at this time we cannot move forward. I do thank you for considering us."You then suggest the customer research the market for other options. Appreciating how valuable your time is, your choice is simple. You can choose to work more and make less, or work less and make more.

Another aspect to consider is to evaluate each opportunity within existing accounts. Evaluate and classify each opportunity based on its own merit. Don't throw out the baby with the bath water. For example, you may be presented with a C opportunity within an A account. Your options are to fulfil the C opportunity in the interest of the relationship, or to politely decline by explaining your reasons and perhaps suggesting an alternative. An effective strategy is when you and your customer agree to disagree. Rather than aggravating your customer by walking away from a C opportunity, it's preferable to openly discuss your reasons. Come to an agreement and that may be to disagree, all the while keeping the relationship intact.

Parameters that flag a C account or C opportunities are as varied as customers themselves. Typical reasons include poor returns, they insist on a rock-bottom price, they are too demanding, you are unable to fulfil expectations, or they order lower-than-acceptable volumes. However, you may elect to pursue them for corporate or political reasons as the Head Office may deem the account prestigious or strategic to the business—one that looks great on the corporate résumé.

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Two Types of Information

One of the deadliest traps of a sales call is predictability: the mark of a boring order-taker selling on price versus value. Customers have been conditioned over the years to anticipate a boring, predictable sales call—the kind where a representative shows up and dispenses a well-rehearsed pitch. Sometimes customers themselves open the call by saying, "Okay, let's hear your pitch," or "Tell me about your company." In fact, customers often communicate their displeasure with the these routine sales calls by not granting second appointments. The first appointment must be worthwhile or you can forget about a second appointment. Some customers go as far as to say, "Okay, come in but you've only got 15 minutes." That is simply a way to shield themselves from another lengthy feature dump.

What should you do if your customer looks at his watch and says that you've only got five minutes? Believe me, it happens. Sadly enough, the majority of salespeople take that as an invitation to recite the Cliff's Notes version of their pitch. If you answered, "I'd tell him all about our company and what we do," you may want to reconsider your approach. Avoid the overwhelming temptation to feature dump. During the first few seconds acknowledge the limited time frame and suggest you'll be finished in four and a half minutes. Then give the customer a 45-second infomercial as to who you are and what you do, highlighting the distinctive benefits that may be of interest. Then ask permission to ask a few questions to learn more about their business to explore if there is a possible fit. During your probing, the customer will clearly see your sincerity and obvious interest. Take the last 30 seconds to acknowledge your time is up and reschedule another appointment. I suggest that the vast majority of the time the customer will be impressed with your obvious interest and extend the appointment by saying, "It's okay, please continue." Remember, if customers feel you may be able to help their business or alleviate an existing inconvenience, they are interested. Your five-minute appointment will often turn into a one-hour conversation.

During the sales call it is the type of information being dispensed by the salesperson that labels the call as routine and boring, or interesting and worthwhile for the customer. There are two types of information. First, there is what I call so-what information, usually associated with sales representatives. It's the classic feature dump where the representative is working through a well-rehearsed, enthusiastic pitch about all the features but generating a so-what reaction from the customer. Even the sales representative gets bored with it.

The second type of information is, "Here's how I can help your business," usually associated with a sales entrepreneur. Surprisingly, this approach is a refreshing change for your customer. It breaks the typical mold of a sales call and brings something new to the table, a genuine interest in the customer. Of course this type of information just doesn't happen. It's the result of effective planning, preparation, and smart probing. Once you have identified relevant features (via probing), bridge them to the corresponding benefits. We have more on bridging and probing in Chapter 7.

I offer a statistic that should surprise you. Your competitor can offer approximately 90% of the same features you can. I call it the duplication factor. Why do you think they are called competitors? Because they duplicate many of the same things you do, maybe even better. To compete, they mirror several of the same features you offer. The key is to differentiate yourself, emphasizing that the business advantage your company can offer is you. Your competitors don't have you. Anyone can copy and improve a product or service, match a competitor's features, copy their sales promotions, or undercut prices, but they can't copy or duplicate you. Apply your own unique style, your own signature, to your Sequential Model. Remember, customers are looking to buy relationships (peace of mind), not just products.

I don't mean to suggest that product knowledge is not important. Of course it is. I agree that you must know what you are talking about in terms of specifications, technical applications, manufacturing specifications, industry standards, and your competitors' offerings. Learn as much about your competitors as you can. Make it part of your planning. However, although this information is important, it won't close a sale for you. Remember, only 20% of the decision to buy from you is based on your product knowledge.

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Avoid the Feature Dump

One of my favorite topics is the good old feature dump. Almost all salespeople (including sales entrepreneurs) are guilty of it. The feature dump is talking about what the product is, how it works, and how it compares with the competition, but not what it will do for the customer. Salespeople jump into a monologue, talking ad nauseam about all the features, often boring the customer to tears. Believe it or not, customers simply don't care about most of that stuff. The conversation with your potential customers often lacks the critical connection between your product, service, or company and their needs. Customers need to know how you can help improve their efficiencies or their margins, or help them become more competitive. More often than not salespeople are selling what they need to sell, instead of selling what their customers need to buy.

Typically, sales professionals show up to the call and after asking only a couple of probes begin spewing all their knowledge, telling not selling. They engage in a verbal avalanche of information, statistics, specifications, and whatever else they can think of to impress the customer. After all, salespeople are supposed to be good talkers, right? Wrong. The underlying problem is the vast amount of product knowledge that salespeople are exposed to. Companies inundate their salespeople with product knowledge, company policies, price lists, catalogs, brochures, flavor-of-the-month promotions, new product launches, and so on. It's no wonder salespeople show up and can't wait to tell the customer about all the features. It's what they have been trained to talk about, to regurgitate all the information in the brochure. In fact, a brochure is nothing more than a glossy feature dump, just as a corporate video distributed by head office is a high-tech feature dump. A brochure or video can't possibly reflect benefits, as they are very subjective. It is the customers' right to identify the benefits that are important to them. Customers decide the benefits, not the salespeople.

More often than not, salespeople respond far too quickly when asked for a brochure. They willingly send out or hand out their corporate brochures, creating a false sense of productivity. Tell your potential customer that you are better than a brochure, and a 15-minute appointment is necessary to explore the possibility of doing business.

On the lighter side, rather than spend the day handing out or mailing brochures with a business card ("Just leave us your card and a brochure") you'd be better off to rent an airplane, fly over your territory, and shovel out 1,000 brochures. It would certainly get more attention! My point is this: Doing an in-person brochure-drop does little to drive your business. Brochures should be used as a leave-behind to augment the sale—not used as a lead-in. However, they can be an effective mailer if you highlight relevant features and follow up with a telephone call to make an appointment after they have received it. This approach will sometimes impress the customer enough to grant you an appointment.

What drives the feature dump is our natural tendency to be helpful. We are often seduced by a false sense of helpfulness created by telling the customer all about our features. Sales representatives love to dispense information. As one customer said, salespeople tend to "show-up and throw-up." This situation reminds me of those PEZ candy dispensers we had as kids: pull the head back and all this information comes spewing out. We often get overzealous in our desire to enhance our customer's welfare. It's nothing short of blah-blah-blah selling, inundating the customer with useless information. I consider PEZ to be an acronym for "Please Excuse my Zealousness." Go out and get yourself a PEZ dispenser and put it on your desk as a visual reminder to banish the feature dump. We must appreciate that our call-effectiveness is measured in terms of the customer's perspective, not ours.

The redundancy of a feature dump is further supported by this statistic: Your customer will decide to buy from you based on less than 5% of your total features. That's it! If you ask your customers why they bought from you, their answer reveals no more than two to three reasons (benefits). Imagine the poor customer having to endure a feature dump that is 95% useless information to them. I compare it to the menu analogy. When you visit a restaurant, you are presented with a menu. The menu is nothing more than a list of available features. You, as the customer, decide what features will become benefits. As you are handed your menu, your server might as well say, "Here is our list of features. I'll be back in a few minutes to take your list of benefits." After reviewing the menu, which can easily include 100 or more features, you place your order of only four to five benefits. There's your 5%. The rest of the items remain as features. The only person who can decide on the benefits is your customer. Your customer is the ultimate authority to either accept or reject your features as benefits. There lies the challenge: Identify the features on your corporate menu that will benefit your customer.

Feature Dumpers Syndrome is an undetected virus that has plagued salespeople for centuries. It sabotages more sales calls than any other sales virus.

The common feature dump virus quietly goes about its business disguising itself as a routine, predictable component of a typical sales call. If you don't think you are a feature dumper, just ask your customers.

Unfortunately there are no pills, antibiotics, or prescriptions available to cure this unproductive approach to selling. But don't fret, help is here at last. The cure lies in your willingness and commitment to embrace a sales entrepreneurial code of conduct. It's time to do more selling, and less telling; features tell, benefits sell.

The feature dump is not something we can totally eliminate. From time to time you will find yourself engaged in an elaborate monologue spewing out so-what information. If you find yourself in this situation, the best thing to do is finish your thought, pause for a moment and say, "Well that's enough about me, how about telling me more about you." Invite the customer to talk about his or her business by asking conversational probes. Resist the temptation to revert back to a feature dump. Take notes and truly listen to what your customer is telling you.

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Features and Benefits: No Advantages

The terms "feature" and "benefit" are commonly used within the sales profession but, unfortunately, they are often misused. Sales professionals frequently interchange these terms, not clear on their meaning. Feature/benefit selling represents one of the cornerstones of professional selling. It has been an effective strategy for centuries and I don't expect it to change, not in our lifetime. It's part of the common currency of every sales call.

To be an effective sales entrepreneur, you must relate your product to the prospect's unique situation. You do this by translating your features into benefits that satisfy the customer's needs. It begins with an understanding of both features and benefits.

A feature is defined as a quality or characteristic of your product or service: what it has. Simple. As part of our planning we need to recognize and appreciate the four feature categories. They are the features of:

your industry

your company

your product or service

you


Each category, of course, offers a host of features. There can be 100 features just about your company, 100 features about your industry, and so on. These features combined become your corporate menu. It's a menu of all your offerings, including you (which happens to be the most overlooked feature category). When was the last time you said to a prospect, "And another reason you should buy from us is because I'm your salesperson." Don't sell yourself short. Make a list of all your features. If you are uncomfortable with this exercise, go back to Chapter 2, Attitude #3.

A benefit is defined as what the feature does for the customer. It is how a particular feature will help a customer and is tied directly to buying motives. At the end of the day it addresses, "Here's how I can help your business." Also, benefits must answer the proverbial question "What's in it for me?"

You may be familiar with the FAB approach of selling: features, advantages, and benefits. I have eliminated advantages. Not required. As it is, sales professionals have a tough time separating features and benefits. Let's not complicate it with an unnecessary step. Few salespeople can clearly distinguish between advantages and benefits. That being the case, how would you expect your customers to appreciate the difference? Both of you end up confused. My approach is simple. Customers buy only benefits, not advantages or features. For example, when you buy a car the feature (your hot-button) is power windows but the benefits are ease of operation, convenience, and control.

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Time to Show Off

The moment of truth. After weeks of telephone tag, voicemail, and time spent planning, you are finally face-to-face with your customer. You have precious little time to deal with the initial tension and create a positive first impression. Psychological studies concur that the best approach to build rapport and trust is to get your customers talking about themselves or their business. It's even more effective if you initiate the dialogue using information pertinent to their business. This is where you can stimulate the conversation by showing off your new-found intelligence. You have worked hard to obtain precall information about your potential customer. Don't hide it. Don't be shy or hesitant to show off. You want to be subtle yet professional. The following examples are effective openers when presented using an, "Oh, by the way" approach.

Congratulations on the company's 10th anniversary.

Congratulations on his or her recent promotion.

How is your new office in Cleveland working out?

I see you recently introduced a new product line.

I saw your new advertisement. It looks great!

Are you still hiring?

Tie in any knowledge you have. Be forthcoming. Your knowledge and enthusiasm communicates to the customer that he or she is important and worth the time you invested in planning.

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A State of Readiness

With our planning complete, we are now ready to prepare for the call. Remember, planning is stuff we do prior to the call, whereas preparation is being ready to perform at the call. A state of readiness begins by arriving on time, which means being 10 to 15 minutes early. This gives you time to mentally and physically prepare. Preparation includes not only checking your personal hygiene (fix your hair, check yourself out, look good) but your corporate hygiene as well. Corporate hygiene is not something we put much thought into. It means having the appropriate tools with you to conduct business at the call. It includes having a professional carrying case or briefcase stocked with product manuals, company literature, calculator, price list, professional notepad, and perhaps a laptop. All these corporate items contribute to the overall impression you make on your customer. Remember, the Sequential Model says that you are engineering customer commitment (closing) beginning with Step #1. Anything you do, say, display, or not display will either enhance or erode the sale. You cannot afford to sabotage your credibility through the use of cheap, unprofessional tools that contradict your objectives as a sales entrepreneur. Get rid of the 99¢ Bic pen and the $1.50 notepad that communicates, "I'm not really serious." Sweat the details. Most people can't distinguish between a $1,000 suit or a $450 one, but they can see the difference between a good pen or a cheap one. Don't let the 99¢ Bic be your signature.

What about your personal identity package? For years experts have reminded us of the tremendous impact image communicates. Your wardrobe—your business attire—speaks volumes before you speak. People buy you with their eyes within ten seconds. Appropriate apparel and impeccable grooming demonstrate respect for yourself and for your customer. They communicate authority and exemplify your commitment to perform to the high standards of a sales entrepreneur. Dress violations such as wearing white socks with a suit, a too-short tie ,or having a run in your stockings can be very distracting to your customer. Neutralize your appearance so that the focus is on you and your message. Don't draw their attention away by wearing something that speaks louder than you. You must make sure that nothing you say or display distracts from the call. You can't aim too high in the pursuit of personal and corporate hygiene. A winning combination of the two will certainly put you at an advantage and exceed the expectations of others. A footnote regarding the importance of image: Naked people have made little impression in this world. Look good, feel good, be good.

For a sales entrepreneur the highest of personal and professional standards should prevail. Planning and preparation will complement your commitment to excellence, as the standards you set will reflect the rewards you get.

A true story to illustrate the importance of readiness: A few years ago I had a sales representative call on me selling disability insurance. She had made an appointment and she arrived exactly on time. As we went through some initial pleasantries I found her likeable. Her name was Betty. About 10 to 15 minutes into the call, I asked Betty what disability insurance would cost for a fellow my age. I was interested. I recognized a need and I wanted more details. Betty's answer was, "I can't give you that information today. My computer is in the car. I will have it for you next week." I was a little annoyed. However, the conversation continued and she finally asked what I did. I love answering that question. I told her I facilitate professional selling skills seminars to sales professionals like herself. Her jaw dropped and she asked, "Oh, how am I doing?" Reluctantly, I told her she was doing terribly. "Why is your computer in the car?" I asked. What's wrong with this picture? Her defense was, "But this is my first call to you. I'm here to get to know you." That's funny, I thought she was here to sell me disability insurance. Betty seemed to think she should make a couple of social calls, then sell me. You see, Betty was guilty of minimal planning and no preparation. Clearly, she was not prepared to do business. She arrived at the call with little more than a predetermined, well-rehearsed selling strategy that did not include any precall planning. No flexibility. I have seen it applied countless times: Representatives plow their way through a sales call with little regard for the customer's agenda. I call it the "cookie-cutter" sales call. We eventually did business, but it took her more calls than necessary to close the deal. Betty and I became good friends and she still talks about her call from hell.

The Betty story is classic. I know there are countless sales representatives out there making sales calls not unlike Betty's—little planning, unprepared. I may be getting ahead of myself, but the most effort you should put into closing a sale is on the first call. Of course this won't happen on every occasion, especially if you have a long sales cycle (the time it takes a sale to materialize). The mindset of a sales entrepreneur is this: I'm here to sell something, not just to visit and have coffee.

Every sales call, including telephone sales calls, must be packaged around two important aspects: a primary agenda and a secondary agenda. Your primary agenda is to sell something—it's the number one reason you are there. Your secondary agenda is to establish rapport and build a relationship—get to know your customer. During the call, however, the sequence is reversed. First build rapport and trust (make a friend) then build on that trust by selling a solution that the customer buys. Although being friendly and building relationships are important, customers know that the reason for a sales call is a sale. Each time you speak with a customer you should have a clear objective—an action you want taken as a result of the call. You are there to do business, to advance the sale. Why do you think you were hired? Your customer expects you to pursue an opportunity to do business, otherwise you may be perceived as wasting their time. By appreciating these two aspects of a call agenda, you save yourself valuable selling time and reduce the number of wasted and unproductive sales calls. Be prepared to sell something on the first call. Don't condemn yourself to mediocrity by not planning ahead of time, like my friend Betty.

Countless sales managers, myself included, have been guilty of misguiding the activities of newly hired salespeople. They seem to forget or don't appreciate why the salesperson was hired. Their instructions to the new salesperson are, "Take the next few months to simply introduce yourself to your customers and don't be bothering them by trying to sell something. They will buy once they get to know you better." How ridiculous. What a gross violation of the company's time and money, not to mention a big injustice to the customer. Customers get irritated by calls that don't have any clear direction or provide an understanding of what comes next. Customers are often left wondering why on earth they granted an appointment. "I thought she was going to sell me something or at least show me a new product line."

Tim Commandment #3
Have clearly defined primary and secondary agenda for every sales call.

Ask: What am I going to sell?

If you cannot make the sale, at least sell the next step. Always leave the customer's office with an agreement, a commitment for the next step. It can include a breakfast meeting, a plant tour, a call with the VP of manufacturing, a demonstration of your product, and so on. We can't afford to chew up valuable selling hours by making unnecessary return calls or return visits. Remember, studies concur that planning and preparation will reduce your sales cycle and increase productivity by a minimum of 20%. You are running a business, ME Inc. Don't work hard, sell smart.

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Where to Find It

We live in the information age, where knowledge abounds. The amount of information we are bombarded with can be rather daunting—we are exposed to over 1,000 pieces of information a day, most of it useless. As a sales entrepreneur, we cannot afford to be wading through reams of useless information. We need to identify and peruse sources of information that will deliver reliable, informative, intelligence about our customer. These sources include:

the internet

annual reports

Dun & Bradstreet

trade journals

the company receptionist

old files

newspapers

information brokers

business library

brochures/catalogs

company newsletters

industry associations

other sales entrepreneurs

friends in low places

their sales department


I am sure your experience will offer other avenues to gather company intelligence. One of the best ways to gather intelligence quickly is to call the company and ask to speak directly to one of their sales entrepreneurs. Introduce yourself, tell them that you are doing some homework, and ask for their help. This is a great source of rich information, often overlooked, and my bet is they will be willing to accommodate you. They are easy to reach as they are in the habit of returning phone calls. I also bet that when they hang up they will say to themselves, "Hey, great idea, maybe I should try that approach."

The company's receptionist is another excellent source of information. Receptionists are often willing to answer your questions and offer interesting tidbits. However, understand that they see a lot of one-dimensional, intrusive sales representatives come through the door, so initially they may be reluctant to help. Be professional, introduce yourself, and tell them why you need their help; you are doing your homework. You can also speak to someone who knows the workings of a company better than anybody else—it may be a foreman, a supervisor, a shipper/receiver, or a driver. These people are usually happy to chat with you.

The list of potential sources is endless. It all depends upon your creativity and commitment to the relationship. Ultimately, your potential customer will be impressed with your knowledge. It demonstrates an obvious respect for their time. Unquestionably, it's a first big step in differentiating yourself and neutralizing your competition, especially if they are hanging out at their adult daycare center being too busy to plan.

From time to time you may find yourself responding to unexpected inquiries where a potential customer has called your company. This call could be triggered by word-of-mouth, one of your advertisements, seeing you at a tradeshow, or it may be simply an inquiry. In any case, your objective is to get an appointment. Resist the temptation to sell them on the telephone. Sell the appointment instead. However, during the initial telephone conversation learn as much as you can about them to ascertain their potential.

If there is potential, sell the appointment and then do your homework prior to the call. A strategy that has proven very effective for me when we get unexpected inquiries is to call their receptionist and ask if he or she would mind putting together a corporate package. This may include an annual report, brochures, and other items such as a company newsletter or quarterly flyers. I then send a courier to pick up the package within 24 hours of the call. When I show up to the appointment knowledgeable about their business, customers are impressed. Once again it's about being planned and prepared.

When is the optimum time to do your planning? I'm sure you answered "during non-selling hours." Right answer. Don't use valuable selling hours to plan. As we discuss in Chapter 4, ideally your planning is done before or after selling hours, not during. However, sometimes selling hours provide the only opportunity to call receptionists or other sales entrepreneurs. Even so, use your limited selling hours wisely.

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What We Need to Know

The more information we gather prior to the call the better we can plan and prepare for the call. Your product or service may very well help the customer's world move forward, but initially the customer sees you as an intrusion, an interruption. It is even worse if you arrive unprepared and ill-equipped. However, by being prepared and ready to advance the sale, your customer will be flattered by your interest and will begin to relax the barriers and perhaps even entertain your ideas. Advanced planning allows you to differentiate yourself. I am not suggesting that at the planning stage you learn intimate details about your potential customer, but rather that you acquire a conversational understanding of his or her business. Specific details come later. You need to familiarize yourself with the macro-issues of the business. Planning is knowing the following pieces of information.

type of business( its competition )

what it does ( private or public company )

location( current vendor—how long )

head office ( political landscape )

branch offices ( hiring or firing )

distribution channels ( organizational chart)

markets ( decision process )

number of employees ( decision maker )

how long in business


I'm sure there are several other issues, but this list certainly guides you in the right direction. Use this as your precall checklist. Customers no longer have the time nor the patience to educate sales representatives.

I'm sure there are several other issues, but this list certainly guides you in the right direction. Use this as your precall checklist. Customers no longer have the time nor the patience to educate sales representatives.

I have personally experienced the plight of no planning. With hesitation, I share my story. A few years ago I was trying to get an appointment to see Mr. Ray, VP of sales with a large Calgary company. I was selling sales training. Mr. Ray was the decision maker (bag of money) and it took weeks to finally connect with him. My persistence paid off with a 7 AM appointment. I arrived at 6:50 AM planned and prepared, or so I thought. Ten minutes into the call, Mr. Ray looked me straight in the eye and asked, "So, what can you tell me about my company?" I responded with my usual, "That's why I'm here, to learn more about your operation and your specific sales training requirements." Mr. Ray then said, "That's nice, but what can you tell me about my company?" With terrifying speed, I realized my dilemma. I put down my pen and responded with a deafening, "Nothing." Busted! I didn't know a darn thing about his company, didn't even know what they did. What the heck, wasn't it easier to just jump in the car and show up to another sales appointment? Mr. Ray wasn't finished. He knew I was selling sales training so he pondered for a moment (I'm sure it was 20 minutes!) and then asked: "Sales training, eh? Can you teach my representatives to show up unprepared?" I thought I was going to die. I'm not sure what color my face turned, but it was either red, white, or blue. It was 7:15 in the morning and I was experiencing the call from hell. Needless to say, I was utterly embarrassed. Oh, the joys of professional selling. If this situation hasn't happened to you, consider yourself fortunate. The customer hasn't tested you.

This has never happened to me again and it never will. That experience proved to be one of my most valuable lessons of entrepreneurial selling; the value of planning. All I needed to satisfy Mr. Ray's question was this: "Your company is in the business of data management and has been since 1977. Your head office is in Houston and your Canadian office is in Calgary with approximately 40 employees." I'm sure Mr. Ray would have been satisfied with my conversational knowledge of his business and the call would have proceeded. I would have earned the right to continue.

By the way, after about 30 minutes with me doing the backstroke in Mr. Ray's office, he finally agreed to evaluate our seminars by attending himself. We eventually did business.

I want to make it clear at this stage that we are not out to identify our customers' specific needs and requirements or identify how we can help them out. We can't possibly learn their specific needs until we meet them face-to-face and conduct a needs analysis by asking a series of probes. Annual reports and company brochures do not reveal customer needs. Only customers themselves can reveal their specific needs. Our precall planning is done to reveal only the macro-issues of their business. Face-to-face dialogue with the customer is the only means available to reveal the micro-issues, such as specific requirements, nuances, ,and particular needs.

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You Have Planned, but Are You Prepared?

History has long confirmed that success is created by proper planning. Imagine a commercial pilot without a flight plan, a builder without blueprints, a coach without a game plan, or a sales entrepreneur without a business plan. Successful sales entrepreneurs plan their work and work their plan. They know the pitfalls of aimless activity, guesswork, or relying on occasional luck.

What's the difference between planning and preparing? I offer you Webster's definitions as well as my own. Webster's suggests that planning is: 1) to formulate a way to achieve or do. Preparing is: 1) to produce by combining elements or ingredients; 2) to make or get ready for some purpose. I augment Webster's definitions by suggesting that planning is doing the necessary things to arrive at the appointment ready to do business. Planning includes making the initial appointment, doing your precall homework, knowing your product, developing a sales call objective, and packing your briefcase with the appropriate tools, samples, and order forms. As Webster's says, "Formulate a way to achieve."

Preparation is being in a state of readiness once you arrive. Good preparation ensures that you are ready to perform guided by a sales call objective. Thus, by our definition, planning is stuff we do prior to the call and preparation is being ready to perform at the call. Customer feedback consistently tells us that sales representatives may have indeed planned, but they are seldom prepared. Once sales representatives have secured an appointment and confirmed the address, they rejoice in a false sense of accomplishment. At best their precall planning is weak and their preparation is nonexistent.

But don't be too quick to view planning and preparation as a laborious exercise. At first glance it may appear to be extra work, but compare it to the consequences of not planning and preparing. The consequences come in the form of longer sales cycles, repeat sales calls, and aimless activity. Good planning does not increase your workload but instead helps you to work more effectively and productively with less physical effort. You may end up with fewer appointments throughout the week, but the time spent planning and preparing will be rewarded with higher close ratios.

Successful entrepreneurial selling demands both planning and preparation. Remember, your Sequential Model allows no missing pieces.

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