Guest Post by Brent Holloway
Ever hear salespeople referred to as hunters and farmers? Hunters “hunt” for new business outside the fold; i.e.: they convert prospects to customers. Farmers till the soil within, growing revenues from existing customers. It’s easy for companies to be enamored with their hunters, because they bring in the “big game” (big new deals), while farmers, who tend to close more, smaller transactions, often work relatively unrecognized in their shadow.
I’d like to suggest that you may be missing out on big revenue by focusing too much on big game.
I know every business is different and no single sales model is right for all, but your answers to the following questions might mean you should hire more farmers and consider putting them on quota. And maybe, just maybe, you should fit your hunters with a pair of overalls and teach them how to farm.
Of course you can’t ignore hunting. You’ll always need to offset some customer attrition and competitive loss. But the impact of optimizing sales to existing customers might be several times that of new business acquisition.
Here’s just one example. If 80% of your revenue last year came from existing customers and the other 20% from new customers, then a 10% increase in sales from existing customers would have the same impact on revenue as a 40% increase in sales to new customers (8% company growth from either scenario). In this case, the opportunity to hunt on the farm is greater than in the jungle.
In closing, here are five suggestions to grow revenue from your existing customer base.
It’s often said that a company’s employees are its most important “asset,” even though they don’t show up on a balance sheet. I would argue its customers are an equal, if not more valuable, asset of this type.
What is your business doing to optimize the value of your customer base?
Want to see how your account team performs compared to others? Download our 2011 Inside Sales Renewal Metrics Report.
Brent Holloway , a Sales 2.0 leader (@Sales20Leader), is Sales Director for Verint Systems and my co-author on Sales 2.0 Improve Business Results Using Innovative Sales Practices and Technology. Thanks, Brent, for helping us see the forest from the trees, or should I say, “the farm from the jungle”?