In most sales strategy planning sessions, it’s the age-old question:
How many clients does your organization need to grow successfully in the upcoming year?
Most sellers and sales organizations don’t have a clear, strategic answer to this question. The answer is something along the lines of “as many as it takes,” or “as many as possible.” These aren’t tangible answers that your sales team can use to build a sales plan or that you as a leader can provide accountability.
This article offers ways to intentionally think through this question, so you and your team can cultivate the right mix of new clients as well as growth within your existing clients.
Two Levers for Sales Growth
In their 2020 CSO Priorities Pulse Survey, Gartner shares that 70% of revenue expectations would come from existing customers, and 30% would come from net-new customers. Another interesting note is that sales leaders see top impacts to sales success coming from conservative customer decision making and changing stakeholders within a customer due to restructures/downsizing.
The two most common levers for growth are adding new clients to your mix and growth through the clients you currently serve.
The easier route is a focus on growing existing customers because they’re already working with you in some capacity. But not all of your current customers are prime for expansion, and some may not be profitable enough for your continued investment in them.
The more challenging route is adding net-new clients, especially given the data I just shared. The challenge typically happens because of these major factors: the investment required to find and cultivate the right relationships, developing and qualifying opportunities, and the length of time to move an opportunity through the pipeline to closure and revenue recognition. This is your velocity to closure and also includes your actual close ratios.
How many clients do you need? Here’s how you and your team can cultivate the right mix of new clients as well as growth within your existing clients. @amyfranko #modernsellerClick to tweet
Using Your Sales Data to Calculate the Number of Clients You Need
Beginning with the sales growth goal of the organization and combining that with your sales data will put you on the right path. Many of my clients are targeting a 20% growth goal for the upcoming year.
Let’s say for example last year’s sales attainment was $100M. This year you’re targeting a 20% growth goal to $120M. You have 20 professional sellers across the team. To keep the math simple, let’s say that each team member had a $5M attainment goal last year; this year’s goal is $6M.
Using our 70/30 split from the research I mentioned, that equates to $4.2M in client expansion and $1.8M in net-net growth per seller.
Where to from here?
- At the individual seller level, analyze the top 20% of your clients. Using the Pareto principle that 80% of our revenue comes from 20% of our clients, what is that data telling you? At the sales leadership level, your approach should be holistic and you may ask your team members to analyze this data and present their findings.
- Conduct a deep dive on that top 20%. What is the actual number of clients? How many of them are existing (over 1 year), and how many of them new for this past year? What were the number of deals and average deal size? What’s your close ratio?
- Determine your number of run-rate clients for the upcoming year and their forecasts. Where will need to fill gaps? What were there one-time projects that won’t repeat? Did you lose any longer-term clients that present a risk?
- Determine where you can expand with those run-rate clients, and then where you now need to add new clients. Back to my example, let’s say with your existing clients you’ve identified $3M in forecast. That leaves you $1.2M in expansion needed, and then another $1.8M that you are aiming to fill with new clients. Using your deal data, you can estimate the number of expansion deals and new client projects you need. While it may not be an exact science, it will give you a smart framework to work from.
Use an Account-Based Sales Approach to Grow Existing Clients
Let’s look deeper at growth through your existing clients. This is where you have an opportunity to take an account-based sales approach versus simply an opportunity-based approach.
An account-level view provides a macro picture of what’s happening across the client that could trigger new ways to help them. When you’re continually building a broad base of knowledge about the organization and their industry, you’re getting beyond a narrow opportunity. This positions you to better provide new ideas, getting out of the “vendor box” and to a “peer-level” or even a step above. You’re also more apt to build a broader base of relationships; in my experience, many a deal are lost because of a missing relationship at a decision-maker or stakeholder level.
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How can you leverage an account-based sales approach with your existing clients to find new opportunities?
- Perform a data review on the top 20% of your current clients to help you understand patterns, trends, and the potential for new projects. For example, one client of mine noticed that several of his healthcare clients needed to solve a similar accounting problem. Once he identified the pattern, he went to his other clients to understand if they were having the same problem. Turns out they were. He was able to close a new project with a current client, all without going out to bid.
- Build a relationship ecosystem of your existing relationships at the client. Normally what this will uncover is that we don’t have enough breadth or depth. I also find that most of my clients have more relationships that are of influence versus relationships with true decision makers. This is an important shift, to push yourself toward higher-level relationship building and beyond your current role levels.
- Do your research into the key factors affecting the client, both internal and external. This builds your advisory intelligence so that you can have better conversations with the client. You’ll likely turn up new ways to help them. Not all factors will indicate a need for what you provide; but if you’re building relationships with other experts, you’re in a great position to make introductions and be seen as a connector.
Laser Sales Prospecting to Develop New Clients
Lastly, let’s look at how to build a smart sales pipeline of prospective clients. Using your sales data, it helps to have a baseline understanding of how many prospective opportunities you’ve pursued, their deal size, and your win/loss ratio.
A laser approach means taking a focused approach with some upfront sales strategy. For the implementation I like to break the workload into consistent “reach-out chunks” of 30 minutes. Below are some of my sales strategies for laser prospecting:
- Looking at my current clients, I build lists in LinkedIn Navigator of who my decision makers are connected to. I then make very selective introduction requests for those that I believe could be a fit for what I provide.
- I build lead generation lists from webinars and then curate into a short list for personalized reach-outs through a variety of channels.
- I invest in key conferences where my prospective clients are attending.
- I’ve created networking / education forums for key decision makers within my clients and prospective clients.
Each of these strategies does take time and, in some cases, financial investment, but they pay off with higher quality relationships and opportunities. Having the data around the number of clients you need, and then being prepared with your account-based and laser-prospecting approaches, you’ll be ready to exceed those growth goals for this year.
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