Last week I introduced you to a very important sales reality.
"Sales, all sales is a critical evaluation of results versus resources"
While doing a great sales seminar with a sales team in south Florida last week, we delved further into this powerful equation. You have a certain amount of resources. Let's say your sales resources are:
1. Sales rep time
2. Marketing materials
3. Educational programs
5. Marketing budget
In every account you are going to "spend" some of these resources in order to get some result. The key is to make sure that your result matches or exceeds the resources you put into the account.
Early Stage Referral Relationships - Resources High, Results Low
In "Early Stage Referral Relationships" you almost always have to put a significant amount of resources into the account to get little to no result. You'll spend a lot of time and energy to position your agency as worthy of receiving referrals. This stage can last weeks to months (and in some unfortunate cases, forever). The better the sales plan, the shorter the amount of time you spend here. This stage is costing your agency money. The outlay of resources costs you significantly more than the return generated.
Mid Stage Referral Relationships - Resources Balanced with Results
Once you've graduated to our Top 20 ideal of getting regular monthly referrals, you have achieved Mid Stage status. In this stage, you are putting an equal amount of resources into the account as the result you get out of it. In this stage you are generally profitable with these accounts, but the amount of work required per referral remains high, and it's difficult to scale an agency for growth if most referral sources stay at this level. Interestingly, most reps prefer to stay at this stage because they feel "needed" by the account, and therefore guarantee themselves some job security.
Mature Stage Referral Relationships - Resources Low, Results High
In this late stage, you are now truly benefitting from the referral relationship as the amount of sales resources you are putting into the account are eclipsed by the results from the account. This is the standard you want to set for all of your sales team members and accounts to achieve. Remember, we're only talking about sales resources. By the time you achieve this level there are many other resource contributors from your agency in the ops and/or clinical department that help manage these accounts. When you achieve this status, your reps are truly free to hunt for new opportunities and develop them because they are not handcuffed to the day to day needs of every referral source.
The prudent sales manager will constantly evaluate hers or his resources to determine if the result is commensurate with amount of resource investment. Helping your sales team understand this critical relationship can give them guidance on when it's time to move on from a non productive account.
I often get the question "When do you know it's time to move on from an account that won't refer?". There's now a very simple and clear answer.
It's time to move on when your resource input is greater than your results output, and you can get a better return by investing those resources in a different account.
Simple, clean, clear.
Stop wasting time and "hoping" accounts into success. Use your data and evaluation to deploy your sales resources where they can generate the best results....and watch your top and bottom line grow.
For help moving accounts to the "Mature Stage", let's do a sales trainings seminar in your office with your team next year and I'll teach you how. Most agencies recoup their investment in the training within days due to increased sales. Be one of those agencies!