How do you balance new business hunting with account farming?
This is an age old dilemma that in some ways has been made worse by the now very common approach of separating the new business selling and account management roles to be undertaken by different people. To further complicate the matter these two roles frequently report into different managers. Add to that the discrete role of business development (canvassing and prospecting) and you have the potential for silo mentality.
When I started in sales I did the lot; new business canvassing and prospecting, new business selling and once the deal was secured I continued to be responsible for managing the customer; looking for more new business plus upgrades and add-ons to the original deal.
Don’t get me wrong; I am not suggesting a return to the days when one person did all three main sales and selling functions, but I am strongly recommending you invest time and effort ensuring the three functions operate as a fully integrated unit with a single purpose.
There has been a lot of debate in recent years about the benefits to be gained from having a joined up marketing and sales operation; a principle that I fully support. However, even greater benefits are there for the taking from a fully integrated sales and selling function; business development, new business selling and account management. Link this closely with all of your marketing activities and you are on the way to creating a really powerful go-to-market engine for your company. In the current marketplace when products and services can be copied easily and quickly it is often easier to create competitive advantage through your sales and marketing engagement process than it is through proposition refinement.
Here I am providing some insights to potential pitfalls and solutions you might consider for your own go-to-market operation.
The three key sales and selling functions
Business development (BD) – responsible for filtering the market potential down to well qualified suspects and prospects ready for the new business function to pick up. This function will be involved in tasks such as responding to in-bound enquiries and making outbound calls; of the three sales functions this is most closely aligned with the marketing function.
New business (NB) sometimes called the hunter role – this is a pure selling function and their responsibility is to take suspects and prospects, turn them into customers and secure deals for specific business opportunities. A key input for them comes from the business development function and the primary output is new customer projects.
Account management (AM) sometimes called the farmer role – responsible for taking new customers and managing the implementation of the project. Typically this function will continue to be responsible for the relationship with the customer from this point onwards and as such should be responsible for identifying and closing add-on, extension and also further new business opportunities. Over time they become the trusted delivery partner and the customer will potentially become a good source of referrals and introductions.
Things to consider when creating your go-to-market operation
The split role model; perhaps the most common model, where BD is free standing or combined with marketing, with NB and AM as separate functions or in some cases a combined single role. The BD, NB and AM roles are usually managed by two or even three different managers. There are many benefits to be gained from this split role model and the most obvious are:
- The BD, NB and AM roles require slightly different, but related, skill sets so having separate functions facilitates specialisation in the three disciplines.
- Separating the functions enables 100% focus on each of the three key sales and selling disciplines. When the roles are undertaken by a single person there is always scope for conflict when multiple, equally important, tasks are begging for attention at the same time.
- The skills required to hunt effectively are less well suited to the patient nurturing required to maintain and grow the customer relationship and hence an argument in favour of splitting the NB and AM roles. Customers typically appreciate the need for ‘hunting’ techniques while a deal is being done but then may prefer to see a more consultative approach to the account management phase of the relationship.
They say there is no gain without pain and the key issues that can arise with the split role model are:
- With the roles being undertaken by separate functions there is an inevitable need for hand-over; leads generated by BD passed to NB and deals that have been concluded involve customer relationships being handed over from NB to AM. As in a relay race the point of handover is a key point where the race can be won or lost.
Having one single fully integrated sales and selling process will help to ensure handovers deliver wins. Companies frequently outsource the BD function, increasing the importance of fully integrated processes with careful handover procedures.
- Customers may be confused as they are passed from BD to NB then to AM. They may also be concerned that they are being moved about your organisation for your convenience rather than their service.
It is important that you explain your engagement model early in the relationship building process in terms of the benefit the customer will gain from, for example, having the right specialists for each stage of the relationship life cycle. This message needs to be reinforced throughout the engagement process especially when different customer personnel are involved at different stages.
- It is common that the AM does not originate from a sales background, especially when the AM role is the responsibility of the delivery function. Typically the delivery project manager will become the AM for the customer. The key problem that arises with this, from the point of view of the supplier, is that a project manager who also has the commercial skills to function as a sales person is a rare beast. Even if you have people with both skill sets they will suffer; torn between time spent delivering and selling, but worse still they will struggle to get the relationship with the customer balanced so that they can switch easily from consideration for the project needs to the selling role.
Ensure your AMs have training in sales skills and that they are managed, monitored and rewarded for sales achievement as well as delivery success.A related issue is that your AM will be primarily focused on delivery, with farming the account as a secondary responsibility. The risk you run is that your competitors, who want to steal your customers, will be matching your farmer with their hunter – is this a fair fight? This situation is at its worst when the AM approaches selling with a browser/gatherer mentality when it demands the proactive farmer, planting seeds and harvesting crops.
As above you must ensure your AMs have training in sales skills. In addition it is important that your sales managers have as part of their responsibility the support of delivery AMs, particularly coaching them when they are in selling mode.
- Having separate managers for the three sales functions can create conflict especially when performance is below expectations. The resultant blame game and excuses detract from the required commitment to work together to resolve the problem.
The three sales and selling functions and their managers need to have a single set of objectives to ensure all are pulling in the same direction. A common incentive scheme based on shared objectives will help to achieve the required togetherness. It becomes crucial to have objectives aligned to company goals and targets to create the right atmosphere for cooperative working, for example; if the company goal is to improve margins but sales targets are based on increasing new business revenue the opportunity for conflict is obvious.
- Having an effective CRM system can help to provide a framework for the underlying support required to ensure the complete customer engagement cycle operates as a single contiguous entity.
It is common that CRM systems are primarily driven by marketing needs and are typically used less effectively as the customer relationship transfers to BD to NB then AM. Ensure the CRM is built around your sales methodology and processes and that it is the core system used to record any customer related and commercial matters. Users of the system should include anyone that touches the customer including, for example, your accounts, credit control and engineering functions.
While the split role is the most common model used to organise sales and selling functions there are other models worth mentioning.
Which ever model you choose to deploy, the same basic principles apply.
- You need to ensure it fulfills the three primary selling functions; new business development, new business selling and account management that pro-actively farms and grows the value of the relationship with the customer.
- You need to ensure the various components of your sales and selling operation are locked together by common; purpose, goals & objectives, management philosophy, rewards & incentives and KPIs.
A good principle to keep in mind when considering which sales and selling model to deploy is: which will deliver the best ‘lifetime value’ from the relationship with the customer?