What if the biggest opportunity in the market isn’t with your key accounts?
Who are the most valuable customers on your account list? Gut instinct likely points you straight to your key accounts. If you’re like most businesses, you double down on your best customers because you have their loyalty, trust, and a profitable track record. After all, sales wisdom tells us that it’s easier to keep an account than to earn a new one.
How do you push growth beyond your key accounts?
One of the most strategic opportunities to grow stands with your second-tier accounts. If you can move the middle of your account list, you have a calculated path to increasing sales, footprint, and margin.
What is moving the middle?
“Moving the middle” is a management strategy typically applied to individual members of the sales team. Organizations achieve the greatest lift in productivity by focusing coaching, training, and accountability on the middle performers. Forbes.com outlines this concept:
- High performers are innately motivated to do well and will strive for stretch goals with little outside management. High potential takes care of itself.
- Low performers are generally missing the motivation or ability to deliver in a consistent manner. They are unlikely to improve no matter how many resources are invested in their development.
- Middle performers are consistent and show the potential for greatness. They deliver wins, but often need coaching or accountability systems to improve.
Findings from an HBR.org study demonstrated middle performers made gains of 30% with focused coaching and sales deployment; some firms saw increases by 50% in two to three years.
It’s a smart move to move the middle of your account list too.
How will you move the middle?
Moving the middle requires a strategic account management review. Define your Tier 1 and Tier 2 accounts by analyzing total sales, margin and hit rate with your account list. You’ll see a trend among your Tier 1 accounts based on deep relationships, market share, sales at desired margins, successful project delivery and repeat business. Understand why you’ve been successful with these accounts, and don’t forget to take care of them. Then, take a closer look at Tier 2. Consider these strategies:
- Define trial versus loyalty.
Has this account worked with your firm once or twice, but not consistently? Define what loyalty means to your team based on repeat work over a specific time period. Establish a benchmark based on your key accounts and set a goal to move a portion of your list from trial to repeat business. You can do this by deepening your relationships at the customers stuck at “trial” level. Ask them why they don’t award contracts to your team consistently. What are the opportunities to change their perception and influence their decision-making?
- Improve hit rate.
How often are you bidding your second-tier accounts? Do you know about all the opportunities in their pipeline? Track competitive outcomes to understand who they typically award contracts to and why. If you understand the competitive landscape, you can address scope, pricing and your team’s differentiators compared to the incumbent.
- Increase margin.
Identify if your mid-tier customers are schedule, quality, or cost driven. This can vary project to project with the same client. Then, set a goal to increase margin on a select number of mid-tier accounts. You can do this with strategic pricing models or incremental goals.
- Expand your footprint of services.
Always ask: Does this customer know everything they need to know about our team or services? Don’t assume they remember your capabilities or how your team is different. You can build value for your Tier 2 customers by packaging in additional services. What is the most under-utilized but valuable service line you offer? Consider a goal that adds more services to your Tier 2 accounts.
- Deepen relationships.
Tier 1 accounts are the result of years of relationship management, fulfilling promises and taking responsibility when things don’t go right. Tier 1 accounts are based on trust. If you understand what mid-tier customers are trying to make happen, you can find a way to drive that outcome.
What’s your strategy to build that level of trust with Tier 2 accounts? Are you aiming high enough in their organization? Consider executive outreach and increasing the frequency of contact. Are you developing relationships with the right people in the organization? Ensure that you are identifying the decision makers and influencers. Follow through on all commitments because consistency is the foundation of trust.
Moving the middle takes time but defining this strategy with your team and your account list will put you on the path to measurable success.
About the Author: Leah Gradl is the Chief Business Officer at Kent Companies, Inc., the 6th largest concrete contractor nationwide. Gradl oversees Marketing and Business Development. Within her 10+ year construction career, she’s built a successful track record of collaborating with cross functional teams across all of the company’s offices. Gradl is active in the AGC, ASCC and regional economic development associations in the Southeast. Connect