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Five Steps to Maximize Success in Targeting For Growth

Copyright (c) 2006-2020
(See This Article in its Original Format.)

Targeting is the process of selecting high potential customer accounts to receive intense sales focus. Goal setting translates that high potential into achievable numeric objectives, i.e. revenue and margin growth. Each Territory Manager should select a predetermined number of Target Growth Accounts (TGA). Creating focus on this group of selected accounts doesn't mean a Territory Manager should ignore other accounts; he is always expected to service his entire territory. When making decisions regarding his or her time, however, he or she should always consider these selected target growth accounts a priority.

The primary purpose of targeting and goal setting is to keep Territory Managers focused on the strategic objective of becoming the Supplier of Choice. The Target Growth Account platform can be used as a flexible guide to successful growth through targeting, goal setting and action planning.

The Target Growth Account platform reflects the evolution of the outside sales force from being primarily transaction driven and self-sufficient to developing customer intimacy and using team-based selling. It's the evolution from being a Lone Wolf to becoming a Lead Wolf (see article at www.ceostrategist.com); it supports growth in profitability, revenue and market share!

Selecting Target Growth Accounts requires careful thought and substantial effort. Annual sales, margin and goals are established, and detailed action plans must be created for each of these accounts. For most Territory Managers, TGA's will contribute a substantial portion of total territory sales growth. This "big effort for big reward" means that the number of TGA's must be limited, and that sufficient time is allotted to succeed with each one.

An account action plan ensures that the Territory Manager is proactively pursuing sales growth and that there is a solid basis for expecting account goals to be met. By monitoring these action plans, both the Sales Manager and Territory Manager can manage activities rather than wait for results.

In short, the Target Growth Account platform provides:

  • Focus
  • Process
  • Best Practice Discipline
  • Accountability

    The Territory Manager needs to submit a predetermined number of target accounts that have a high potential for growth with a high probability for success. These accounts are approved by the Sales Manager and become the focus of the Territory Manager and the Sales Manager. This account selection should include a number of prospects that are currently doing very little or no business with the company. This will keep the account pipeline full. Every salesperson loses accounts. Without the development of prospects, eventually the pipeline will run dry and the territory will shrink and lose market share. Individual sales goals are established for each of these accounts and agreed upon by the Territory Manager and the Sales Manager.

    The intention of planning and goal setting is to provide focus on Target Growth Accounts. These are the accounts with the most potential for growth. This doesn't mean the Territory Manager now only has a limited number of target accounts. He must continue to service his entire account base. These are target accounts that have high growth potential and have been identified to receive a proactive, aggressive focus for growth.


    Managing the TGA Platform

    A Sales Manager has many competing priorities. One of the most important is the need to manage the sales functions. The TGA planning and reporting platform and the various activities which are a part of it are intended to help the Sales Manager improve sales management skills.

    From a management perspective, the goal of TGA is to improve the quality of the targeting, goal setting and action planning efforts of your salespeople. Its primary purpose is to provide focus, process and discipline that will enhance territory performance. This enhancement will lead to an increase in the sales, profitability and market share for each individual territory. The process itself becomes an effective sales management tool.

    An initial TGA territory meeting between the Sales Manager and the Territory Manager is the most important step in the TGA process because this is where the company's expectations of sales performance are defined. This meeting creates territory dialog that is essential for effective sales management ,support and knowledge transfer.

    Each Territory Manager should prepare by organizing some key information for each of the TGA accounts selected.


    The Steps of the TGA Platform

    The major steps in the targeting, planning and goal setting process are depicted in the diagram below. A description follows for each.


    Step 1: Account Selection

    The TGA platform is intended to increase the focus of your sales effort on the kinds of specific activities that will lead to growth in sales, margin and market share. Before these activities are precisely defined for the TGA platform, the Territory Manager must select his Target Growth Accounts and review them with the Sales Manager. Target Growth Accounts should be selected on the basis of their potential dollar growth.

    Careful selection of TGAs is obviously critical for the success of all subsequent efforts. Selection must be based on unfilled "real potential." Territory Managers should explain their rationale for their selection backed up by data justifying that selection.


    Step 2: Customer Profile

    When a customer makes his buying decision, he does so based on certain assumptions, perceptions and expectations. When the customer places an order, these assumptions and/or perceptions become reality in the customer's eyes. Your failure to understand these assumptions and perceptions often leads to costly misunderstandings, resulting in a disappointed customer. The key to avoiding these misunderstandings is to get the "book" on the customer. Only by understanding his needs, perceptions and expectations can you avoid misunderstandings.

    Remember:

  • The customers' perceived value of your company drives their expectations
  • Your company's performance value drives your customers' satisfaction


    Getting the "book" on the customer means defining the customer profile. It contains information about the internal workings of your customer, including everything from the company's history and ownership to its day-to-day ordering process. Territory Managers should complete a customer profile for each of the accounts that they have selected. E-mail rick@ceostrategist.com for a sample customer profiling form.

    The customer profile is the core of the TGA platform. Each profile element becomes a building block in the program's foundation. Without good dialog with target accounts, securing the information necessary to formulate a meaningful action plan becomes very difficult. To ensure maximum benefit from the information collected, the questions asked and the answers given should be documented. This allows both the Territory Manager and the Sales Manager to improve their knowledge of the account.

    Suggestions for getting the information needed include:

  • Analyze internal historical data
  • Do outside research on the customer's industry
  • Ask the customer directly
  • Develop a relationship with the gate keepers
  • Use the internet to research the industry and the customer's customer's

    Understanding the customer's market and business is necessary to develop a plan for growth. You need this intelligence to determine and allocate the necessary resources. You need to understand your customer's business in order to understand how to meet his needs, cure his pain and sell to him. Understanding his business involves knowing his markets, customers and competition. The market profile is used to gain knowledge of your customer's customer. In which market segments do they participate and what is your customer's strategy for growing market share? This requires serious discussions with numerous people in your customer's location. You will define the key players and your contact points on the customer profile tracking form.

    Areas to explore include: what types of markets are they in? Are their markets growing or shrinking? What is their market share? Are they exploring new markets? What types of customers are they after? Who are their major customers? How do they generate new business? What is their large to small customer ratio? Who is their competition? What price or profit pressures are they experiencing?

    This helps you get a better understanding of their business. By understanding their types of customers you will be able to determine the timelines from order to delivery. What is their ordering lead-time? What could be done to shorten the cycle time and perhaps determine what your customer's pain factors are?


    A. General Information ---A Customer Overview

    This provides an important snapshot of the TGA account. It tells you exactly what kind of company you are dealing with. Areas to explore include: when were they founded? How did they get started? Is it a partnership or sole proprietorship? Is their family involved in the business? Where are they headed? Do they have a strategic plan? What are their growth expectations? Who are the principals of the company? What are their demographics as it relates to their market, their office locations? What is their current and forecasted revenue? How many locations and employees do they have? What is their sales and margin split between products and services? What is their financial condition and credit rating?


    B. Products and Services

    What kinds of products and services do they sell? Are their products and services seasonal? Do their products and services go through sales lifecycles? If so, how long do they last?


    C. Buying Process

    What is their inventory control process? Do they buy based on forecast, material requirements planning (MRP) or the empty cabinet methodology? What is their ordering practice? By understanding their process, you can better determine the pain factors and the opportunities to become a hero.


    D. Vendor Practices

    Are they implementing a vendor reduction program or any other type of program that has significant impact on their purchasing practices? What kinds of buyer programs do they have? Are they members of or considering a buying group? Do they pay their bills on time? Are there any special terms required?


    E. Special Requirements

    Determine any and all special requirements such as packaging, receiving certifications or electronic commerce.


    F. Becoming the Supplier of Choice

    A current analysis customer profile is the baseline that allows you to understand your current position with the TGA candidate. It provides the starting point of where information will help you understand the customer's "Rules of Engagement." Look at all opportunities to prove your value as the supplier of choice. This includes product related issues, service related issues and even e-commerce. Keep this information current as opportunities come and go. What do they look for in a vendor? What do they think of you? Who are your major competitors for this account and what are they doing to win the business?

    These are suggested questions to get you thinking. Don't stop there; be creative. The more you know about your target account, the better prepared you will be to shorten the time required to meet your objectives.


    G. Customer Contacts

    A critical aspect of the TGA platform is the identification of all key contacts. This is more than a contact list. Sometimes just obtaining this data can be an adventure and a learning experience for your sales force.


    H. Decision Makers

    Some portion of the contacts identified in the previous section should be considered "key decision makers" in your customer's organization. They are the people who heavily influence the buying decision or heavily influence those who make the buying decision. These people deserve special consideration. You should understand the opinion that each key decision maker holds about their critical needs from a supplier and what it takes to become supplier of choice.


    I. Competitive Profile

    Who are your customer's major competitors? How do they sell against them? Why do their customers choose them? What is their competitive advantage?


    J. Key Questions:

  • What would their customers say that they really value from your customer?
  • What are your TGA customers' key skill sets, i.e. what are they really good at?
  • Who are your customers' major competitors?
  • How is your customer positioned in their market?


    K. Customer Requirements

    Customer requirements are all of the specific criteria that you must meet to do business with a customer. Often, these are mundane issues like payment terms and quality certification. Think of these as the hurdles that you must clear in order to be a qualified supplier to your customer. The rules of engagement identify the conditions that are necessary for your company to win the business. Consider them to be the minimum qualifications.

    Your Territory Managers must identify these requirements for each of their selected accounts. Although they are most important for prospects, you may be surprised to find what you will uncover during your investigation for existing customers. You may find that your existing business is at risk because you are not currently satisfying their minimum requirements!

    The following is a partial list of the typical areas in which rules of engagement are enforced:

  • Inventory requirements
  • Credit terms
  • Payment terms
  • Return policies
  • Contract pricing
  • Quality programs and certification
  • Integrated supply
  • Special shipping and handling
  • Drop ships EDI - Internet communication capability
  • Credit card sales
  • Training
  • Strategic alliances
  • Consignment Frequency of vendor communications


    Step 3: Define Goals

    After the Territory Manager has selected his targets and collected critical profile information about them, it's time to quantify goals. For each TGA account, the Territory Manager should now define goals for sales revenue, sales gross margin and potential product objectives. The first item to be considered is exactly where you stand as a supplier or potential supplier right now.


    Served Available Market (SAM)

    The first step is to quantify the potential for each TGA account. Total available market, less other channel supply that you do not participate in, equals Served Available Market. This is the true potential revenue that you have the opportunity to go after. Just because the customer buys a total of $XX does not mean his total purchase is realistically available to you. We have now entered the age of multi-channel distribution. Your SAM must represent a large potential with a high confidence for success to warrant engaging the resources necessary to capture the account. This candidate should match the abilities of your company to perform. You must understand and be capable of performing under this customer's requirements, or their "Rules of Engagement."


    Forecast

    Territory Managers should forecast sales revenue, sales gross margin and sales, by product line or vendor monthly. This is not "pie in the sky" guessing. They should be able to back up their forecast with solid data and a reasonable thought process. In other words, why and how do they feel they can accomplish this goal? Note that these forecasts should be revised based on the action plans developed in the next step.


    Step 4: Action Plans

    The action plan is the plan of attack - the steps that will enable the account to reach its goal. It should develop naturally from the knowledge the Territory Manager gained from his research and customer contact. A detailed action plan should be developed for each target account. Of course, the plans for accounts with which you currently do business and have relationship equity may be more extensive than those for newer prospects. This action plan determines how to match your company resources to every opportunity that exists within that account.

    Each task in the plan includes three critical elements: a "deliverable" or result that the task will produce, an owner responsible for the task, and a due date. Defining a clear deliverable ensures that you are not confusing motion with progress. You must be clear about what you are trying to accomplish in each step to be sure that the overall plan will produce the desired result. Deliverables are the difference between passive forecasting and active planning.

    The owner of the task is the person responsible for its completion. This is not necessarily the person who will do all the work involved. Each participant in the plan must acknowledge and accept responsibility for his portion of the plan. Task owners could include:

  • Inside sales
  • District Manager or Regional Manager
  • Vice President of Sales
  • Credit and collections personnel
  • Operations manager
  • Branch manager
  • CEO in special cases

    Definitive action plans are more than personal account visits once a month. They are more than introductions to upper management and they are more than a commitment to work with management to submit the lowest bid. Action plans must be precise, definitive and measurable. They could include tasks for getting specific customer information, introducing new product lines, entertaining key players, etc.

    Do not make the mistake of putting all your energy into your largest accounts. This is especially true when you are getting the majority share of spend from that account. Remember, the TGA process focuses on the greatest potential for growth.

    Instead of simply learning to "do what we have always done a little better," we need to become aware of and practice understanding that involves re-examining everything we do - including how we think about our customers and our role in their future.

    This often means letting go of our existing knowledge and competencies, recognizing that they prevent us from learning new things.

    This is a challenging and sometimes painful, but ultimately rewarding, endeavor.



    Step 5: Track Progress

    Progress on TGA action plans should be tracked, and specific TGA discussions between the Territory Manager and the Sales Manager should occur on a regular basis. The Territory and Sales Managers should also discuss and update the action plans where appropriate. A Territory Opportunity Action-planning Discussion should occur on a regular basis (monthly is recommended) to monitor results and make the appropriate course corrections.

    Targeting for growth is not a complex process. It is built on best practice sales principles. However, commitment on the part of the Sales Manager and the Territory Manager is essential to success. The WIIFM (What's In It For Me) is simple: MORE MONEY.

    Effective targeting produces growth in revenue, profits and market share. Such growth increases sales incentive and enhances performance. Improved performance leads to more money for both the Territory Manager and the Sales Manager.


    About The Author: Shop Amazon - Top Gift Ideas
    http://www.ceostrategist.com - Dr. Rick Johnson (rick@ceostrategist.com) is the founder of CEO Strategist LLC. an experienced based firm specializing in leadership and the creation of competitive advantage in wholesale distribution. CEO Strategist LLC. works in an advisory capacity with distributor executives in board representation, executive coaching, team coaching and education and training to make the changes necessary to create or maintain competitive advantage. You can contact them by calling 352-750-0868, or visit http://www.ceostrategist.com for more information. CEO Strategist - experts in Strategic Leadership in Wholesale Distribution.

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    The other day I was discussing marketing options with a client and she said something that shocked me. I was shocked because this client founded and runs an extremely successful consulting practice and works with an elite roster of Fortune 100 companies.

    Get the Balance Right
    Written by: Rich Thawley | Distributed: 2009-01-28 | Word Count: 638 | Page Views: 3212 | Votes: 15 | Rating: 3.33
    Do you build your business around your family or your family around your business? The choice is yours.

    You Can Turn Complaints into Cash!
    Written by: Judy Murdoch | Distributed: 2006-08-08 | Word Count: 795 | Page Views: 5631 | Votes: 26 | Rating: 3.31
    Most of us don't like listening to complaints. We can't imagine the value in listening to someone rant and rage about something they're dissatisfied with. But here 's a secret: There's gold in those complaints—-if—-you know what to listen for.

    Delegate Or Die: 6 Steps For Business Growth
    Written by: Rick Sloboda | Distributed: 2007-05-08 | Word Count: 366 | Page Views: 2965 | Votes: 24 | Rating: 3.29
    To achieve business growth, you need to focus on your strengths and hire others to take care of the rest. Unfortunately, entrepreneurs often fail to employ this fundamental business growth strategy. Here are six steps to help you delegate successfully.

    Whose Restaurant Can You Find Online?
    Written by: Rudy Vener | Distributed: 2007-07-09 | Word Count: 640 | Page Views: 4241 | Votes: 7 | Rating: 3.29
    What is so significant about Pizza Hut's latest TV commercial?

    Why Businesses Need Receivable Factoring In Cash Flow Management
    Written by: Toby Seibert | Distributed: 2007-08-08 | Word Count: 866 | Page Views: 5563 | Votes: 7 | Rating: 3.29
    In today's business environment, many businesses need to fine-tune the process of getting paid on invoices, in order to improve their cash on hand. Improving cash flow can be an ongoing challenge for businesses of all sizes, and it is an issue that must be addressed to ensure the long-term viability of the business.

    Boost Retention And Referrals In Your Insurance Agency
    Written by: Stephanie Cunningham | Distributed: 2007-10-23 | Word Count: 707 | Page Views: 1914 | Votes: 7 | Rating: 3.29
    If you have ever stayed at a nice hotel, then you have probably seen the hotel's Concierge. The role of the Concierge is to assist guests with information and service to enhance their stay. What would happen if you took the idea of the Concierge and applied it to the way you service your agency clients?











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    Article Statistics
    Word Count: 2956

    Total Views: 2640

    Article Rating: 2.45 of 5
    Votes Cast: 11

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    Last Distribution Date:
    2006-07-18 10:48:00

    Internal ID: #3142





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