It feels like 2005 all over again, doesn’t it? Every company is having a record year – just ask them and they will tell you. Almost every salesperson and company I know is surpassing their goals.
If this description fits your company, congratulations! You made it through the Great Recession, and now it is time to enjoy the fruits of your labor; however, before you ask for another bowl of kiwi, please consider this question: How much of your growth is coming from new customers?
Most companies in the security industry are growing right now, but much of the growth is coming from the same customers, repeatedly. They are successful because the economy is expanding, and their customers are growing; however, they are not growing their market share.
During the last 18 months, the most common statement I hear from sales leaders and salespeople is: “I’m too busy taking care of my current customers to be able to do anything else” – unfortunately, those are famous last words.
When you are so busy, penetrating and developing new customers is difficult. I don’t mean to make light of it or imply that salespeople are being lazy; on the contrary, most are working harder than ever. Still, capturing greater market share is critical to long-term success.
How to Land New Business
Living off the expansion of your current customers is fine right now, but what will happen when the economy shrinks again in a few years? If the sales team starts looking for new accounts when the economy is slowing, then they are a couple years too late.
Your sales team must be in the habit of generating new accounts and winning new business, and that takes proactive behavior – it doesn’t just start happening spontaneously.
Below are eight ideas that will help them find and win new accounts, with a general description of what to do and a potential obstacle that could get in the way of success. Implement one or two of the ideas, and after they work and you feel comfortable, bring on a few of the others. After a year or so, you will see a major shift in your team’s behavior – they will be searching for and capturing new accounts, and growing your company’s market share.
1. Define the ideal customer. If you are going to proactively pursue new customers, then you need to invest your time on companies that look like your best customers. Once you define the characteristics of the ideal customer and use discipline to pursue only these types of prospects, then everything becomes easier. Salespeople will secure more appointments, they will have more credibility because of the previous performance, and you will be able to fulfill the project with higher quality and more profitable results.
Potential Obstacle: Limiting your descriptions to vertical markets. To get the most out of this exercise, dig deeper into the descriptors of the organization – such as number of employees, square footage, risk aversion, types of security problems, location and of course, vertical market.
2. Have each salesperson create a list of targeted prospects. Once the ideal customer is defined, each salesperson should create a list of prospective accounts that fit that description. Make sure each person knows how many prospects they should have on their list – the number should vary. For example, a seasoned salesperson with current accounts generating $2 million per year should probably focus on penetrating about 10 new accounts; however, a brand-new salesperson could have as many as 200-300 prospective new customers on their list.
Potential Obstacle: Salespeople half-heartedly creating their lists. You know the scenario – you ask for their list by Friday at noon, and everyone on your team is scrambling at 11:55. Do not make this project a one-time event. Ask for their initial lists, schedule a review, ask them to make certain changes and then schedule another review. Perform this routine up to four times until they get their lists correct.
3. Track their progress of penetrating new accounts. Just like you track sales with the utmost detail, the progress of penetrating new accounts should also be tracked. Whether you use a CRM or an Excel spreadsheet, you should be working with your salespeople on their new account activity on a bi-weekly basis. Activity can be measured in measurable stages, such as: attempted contact, contacted, conducted a meeting, delivered a proposal, etc.
Potential Obstacle: Salespeople exaggerating about their hard work. To avoid or minimize this obstacle, schedule specific goals for every meeting. Specific goals could be achievements like scheduling five appointments with companies on their list; contacting 50 specific companies on the list; or sending an email blast to all companies on the list. If you set specific goals, comments like “I’m trying, but not getting anywhere” will be reduced.
4. Pay more commission for sales to new accounts. Many companies do this, but the variance is not enough to make an impact. If you are paying 4 percent on current business and 5 percent on new accounts, then you are just giving away a point on new business. That extra 1 percent isn’t motivating anyone – why not make it 3 and 6 percent?
Potential Obstacle: The temptation to punish and not reward. I have seen companies embrace this concept, but only punish their current salespeople. In the scenario above, they would continue to pay 4 percent on new accounts, but reduce their current account commission rate to 3. If you do something like this, be prepared to lose people – especially in this market. Losing people is not always a bad thing, but you should be prepared for it.
5. Reward the whole office for reaching new account goals. Like any other initiative, winning new accounts needs to become part of the culture of the business. Not only should salespeople and ownership get excited when a new logo is captured, but so should the service call dispatcher, receptionist and everyone else.
Here’s an idea: Bring the whole staff to a bowling party on a Friday afternoon if the sales team reaches their new account goal for the quarter. While at the party, announce the contribution by the highest-performing salespeople that led the team to reaching the goal (and hence the party).
Potential Obstacle: Calculating the right goals. If it is too high, then no one takes it seriously. Too low and there is no suspense or engagement from the rest of the company. The first few quarters may be tough, so make adjustments until you nail it.
6. Create an inbound marketing initiative. With the drastic shift in the way businesses purchase security today, inbound marketing has become an essential part of most businesses – especially ones that want to win market share. A quick Google search will help you understand inbound marketing, and there are plenty of marketing companies that can facilitate a personalized program for your company.
Potential Obstacle: A firm’s lack of industry knowledge. I have seen this initiative fail dozens of times because marketing companies do not have the industry knowledge necessary to create content – and their client is a security company that does not have the time to write the content themselves. Either invest in someone that can write articles, blog posts, social media teasers, etc., or find a marketing company that has the technical competence to write the content for you. They all claim they can do it, but ask for samples before proceeding.
7. Have each salesperson develop a networking strategy. A common trait of superstar salespeople in our industry is that they are avid networkers. To win new business, your salespeople need to be known as experts, and one of the best ways to be known as an expert is to be a strong networker.
Ask each of them to develop a networking plan. Keep the plans simple – list one or two associations, contractors and consultants that they will pursue, as well as 12-month action items for each group. It really can be that easy.
Potential Obstacle: Implementation. If the plans are kept simple, then holding your salespeople accountable can be as easy as doing monthly check-ups on the status of each group they identified in their plans. If the salespeople know their superiors will be asking about their activities, then the work will be done.
8. Do not hire the experienced person with all the contacts. I have seen this scenario end badly a gazillion times. As leaders in the community, you may socialize with other leaders from other industries like law or finance. They talk about their rainmakers, and we tend to think that the same concept works in security – it doesn’t. Do not misunderstand: A seasoned salesperson could increase your market share, but not just because of their relationships – they must have the skills to identify, pursue and win new accounts.
Potential Obstacle: Conventional wisdom. Decades of habit will gnaw at you to hire this person, and the constant message of “relationships are everything” will pound away incessantly. Be strong – do not hire anyone simply for their relationships. Relationships are helpful, but they are not everything. If the person does not have the raw skills to win new accounts, it will not work out.
Chris Peterson is the founder and president of Vector Firm (www.vectorfirm.com), a sales consulting and training company built specifically for the security industry. To request more info about the company, visit www.securityinfowatch.com/12361573.