Account selling is completely different from account management, and it's often more important.
Consider, for a moment, just how much of your annual sales are due to first-time customers vs. repeat customers. My guess is that at least 70 percent of your business is from repeat customers.
But where do most salespeople spend 70 percent, or more, of their time? Trying to win new accounts. These numbers, and this logic, just doesn't compute.
Research shows that when you add up all the costs associated with winning a new account (advertising, marketing, selling, administrative, miscellaneous, etc.) it's six to seven times more costly than retaining an existing one. But too many companies task their salespeople with finding new clients, and then set them up to forget them, once they've been secured.
An effective method to help avoid this pitfall is implementing a comprehensive, well-thought out, customer relationship management application. But the CRM application alone isn't the most effective way to service your clients.
Instead, there are several critical processes that must be tied to the CRM application to make it as effective as possible. Why do I make this claim?
Several conversations I've had with clients and colleagues have led me to realize that many businesses view the CRM application as the holy grail for client interaction. More than any other tool or process, these businesses believe their success for winning accounts, and then managing these accounts, lies within the capabilities of the CRM application. I disagree.
I believe that in addition to an effective CRM application, the company must also have an effective prospecting process, and most importantly, an effective selling process. The mistake so many companies are making is thinking that all that's necessary to have a sales process is managing the data within the CRM application.
However, the application does nothing in terms of making selling a process. It only manages the data entered. And more importantly, it only manages the data in the way customized by the program installer or database administrator.
For example, I was working with a client who, during my qualification step, had told me she already had a process for selling. Intrigued, I said, "Really," and then asked about the process she was using.
After a brief questioning period, I learned her company didn't have a sales process at all. The company really only had a process for developing prospects that utilized a popular CRM application as the motor and managed the prospecting activity of the company's salespeople.
On another occasion, a colleague told me how a salesperson at his company called on a client only to find the customer absolutely furious. Apparently the installation of the equipment the client purchased had been a prolonged disaster.
The many conversations between the client and the installation team and the customer service team had been documented in the customer's database record. However, each department maintained secured records for their client notations. No one outside of the department could access the information.
Additionally, this salesperson had failed in his responsibility to be of service to the customer. Even if he couldn't access the information entered by his coworkers, his failure to regularly check in with the client was obvious. And the reason he didn't bother to check in? He was too busy prospecting for new clients.
Michael Hammer, the re-engineering guru, says, "Modern selling is a team sport and a complex one at that. Winning at it takes discipline and structure. Making it up as you go along is a recipe for disaster."
I couldn't agree more. When selling becomes a process, it ceases to be a problem - and until it (selling) becomes a process, it will always be a problem. Unfortunately, most companies don't have a process for selling, yet mistakenly believe that a CRM application alone is the solution. It simply isn't.
As I mentioned earlier, however, when you combine a good CRM application with an effective prospecting process and a proven sales process, the results will be outstanding. The prospecting process will be contained within - and generated by - the CRM application.
For example, prospecting activities such as thank-you letters, welcome letters to new clients, targeted mailings to only clients meeting specific criteria (500 employees or more, at least $20 million in sales, etc.) can automatically be generated by the CRM application.
When you combine these capabilities with a step-by-step sales process like the "Track Selling System" and customize the CRM application to model the steps of the system, your company is now operating at maximum capability.
You could also set up the CRM application to model the entire sales cycle by breaking it, the sales cycle into the seven steps of the Track Selling System, and connecting every department to the same database with equal access. This way any employee who looks at a client's contact record can know precisely where the company is in the sales cycle and what activities are taking place.
And more importantly, every employee from every department can have an up-to-date snap-shot of the client's status and satisfaction level at any given time.
If your company is using only a standardized prospecting process, a customized CRM application or a standardized selling process separately, I strongly suggest it merge the three. While each will prove valuable on their own, once they're all intertwined, your company will achieve outstanding sales success.
Roy Chitwood is an author, trainer and consultant in sales and sales management and is president of Max Sacks International, Seattle.