Today, I’m going to show you a neat way to extract more money out of every account you manage. Once you understand how to find those hidden money pockets, you will be able to start collecting more money from each of your accounts almost instantly. Not only that, but this will also help you build greater relationships with the store owners you work with.
You need to find new ways to optimize your revenues
You may have heard about having to grade your accounts to create more wealth for your business… and it’s a process that few companies do right!
It’s unfortunate, but most companies get their sales reps to call on the accounts based on current value and not on potential value. Why? Simply because that’s the easiest thing to do. It’s easy to know which one of your accounts are big based on the sales numbers only! Even though they are the stores that are bringing you the most profit, you should put all your focus only those ones.
If you’re looking to grow your business and get more revenue coming in, you need to start looking for ALL the opportunities for growth. You need is to find ways to minimize your risks while also maximizing your profits.
This is why you need to understand that you must grade your accounts partially on current value, but also take potential value in account.
Understanding potential value is HARD
Potential value is hard to quantify because is it subjective. This is why all the best sales managers the biggest organizations are getting paid the big bucks for their hard work. Their critical thinking is key to the success of the whole company.
Most sales managers don’t put enough emphasis on understanding the importance of potential value. If only they did, that would allow them to easily extract more money out of every account. Only focusing on current value is a common mistake that must be avoided if you want to grow the fastest in your market.
Let’s say that you’re a company that is selling products to a corner store. Since that store is small and you have a great relationship with the owner, he lets you have 80% of the facings. That means you have 80% of the market share within that store, and…
That’s great, but…
Further down the road, there’s a big retail store where you stock many of your products. In that store, there’s a lot of competition and you only have 10% of the market share for your products. Should you still invest time and money in improving your presence in that store?
Put your efforts in the right places
If you were to base your decision only on current value, you may want to go ahead and put MORE effort in the corner store instead of the big retail store. And that’s wrong!
In the small store, the amount of money you can extract from your sales is minimal compared to the POTENTIAL amount you can get from the big store.
Some simple ways to increase your ROI almost instantly
Once you understand the untapped opportunities that you’re missing out on when you don’t take into account potential value, it will a no brainer for you to start looking for ways to optimize every account in order to find those hidden money pockets sitting there waiting to be turned into profits for your company.
Here are some of the things you could do to improve your market share in a store:
- Increase your number of facings
- Have one or more off-location displays
- Have special deals and promotions in the store
- And more…
If you’re never really tracked how the promotional actions are affecting your sales, this would be a great time to start tracking them.
For example, you may conclude that simply doing one of these only ONCE in a store that never had this type of promotion from you before may net you incredible results. You may suddenly go from a bottom place to getting close to the market leader with simply one promotion.
This is where you need to figure out what your competition is doing and the cost of opportunities. What you want is easy ways to grow in stores where your competition is low.
Case study of a famous manufacturer in Australia
There’s a famous manufacturer here in Australia that have set up a specific metric for their reps.
That metric is: “between the front door of the retail outlet and the cash register, there must be 5 touch points of our product that the consumer must see, so that they impulse buy almost automatically”.
Here are some examples of what the reps will try to get in the store to increase the touch points:
- There could be a floor mat at the entrance of the store with the product logo on it
- You could have your product well displayed in its section close to the market leader
- You could have the product available in one or multiple off-location displays
- At the cash register, there could be a small ad or widget that talks about the product
And so on…
The reason this works is if a customer sees a product many times before getting to the cash register, there’s a stronger chance he will buy that product more often and also choose it over the competitors.
Take a no-risk approach to fast business growth
Once you know this, then it would be a good idea to start getting creative on getting more visibility for your products.
For example, if most of the stores with the highest potential value only have 1 or 2 touch points, then simply increasing that number by one may net you a lot of extra revenues.
If you’ve graded the accounts correctly, you will know which one have the most potential for growth. This means that even though you know you’re taking the risk of investing time, effort and money into a specific store, you know that it’s well worth it.
The risk is actually greatly diminished once you know that this store will easy convert into higher profit just some simple adjustments that will improve your presence in the market. When calculating your return on investment, you never just want to get your money back. You want to earn from your investment.
This is why you can’t always focus on the best stores. It’s the law of diminishing return. Some actions will result in high payback, while some others will not do much to increase your business. You need to find those easy opportunities to boost your revenues with minimum risk.
Potential value is the key for growth
Understanding potential value is the best way to maximize profits and performance for your sales team. I’m sure you already have some accounts where you don’t have a good store presence, but easy actions could be taken to remedy that. You might be one promotion away from a huge return.
You need to figure out what are the basic things you need to do to optimize your profits in your biggest potential stores. If you’ve never done a certain promotion in that store, do it! If you’re never had you sales rep ask for more off-location displays, do it!
Turn your sales reps into consultants
Your sales reps should be brave enough to tell the store owner to take specific actions in order get a return on investment that’s lucrative for the both of you.
Armed with valuable knowledge, your sales reps should act more like retail consultants. They should be able to provide the stores with valuable information that will then influence that stores into marketing your products in your favour.
You want your reps to be convinced that by having the stores make some changes, you can help them produce more wealth more everyone. Once the stores start believing your reps, then this becomes a no brainer for them to allow you to increase your presence.
Now, if you’ve never thought about grading your accounts in order to extract more money out of the business you already have, then this would be a good time to start!