Segment Accounts For Strategic Advantage

T aking the time to segment accounts in your territory provides a simple way of identifying the most effective approach to allocating your time, and sales resources.

The best way to segment is to look at each account or group of accounts in terms of current performance, and future potential.

• Current performance is usually easier to determine by looking at metrics like total revenue and profit.
• Future potential requires some analysis and judgment on your part. Some of the accounts that are your best performers today may not be your best potentials in the future. Conversely, some accounts where you are currently not doing business may be your best potential for future business.

Viewing accounts from these two perspectives allows you to build a four-by-four account segmentation matrix. You will have potential on the horizontal axis and performance on the vertical axis. The map will be broken down into four quadrants:

1. Run rate accounts are accounts that have low current performance and low future potential. They may not be immediately important. You should not put great resources in developing them unless something significant happens in one of the accounts which requires your attention. Otherwise, you should adopt a program approach, which relies heavily on mail, telephone, web based portals, information, and other marketing activities to keep cost of sales low and customer satisfaction high.
2. Defend accounts are accounts are doing good business today but do not represent much future growth. It is important to retain your revenues and run rate but not to overinvest. These accounts often have a long history with your company and are used to high level of service from you. Your approach with them should be based on providing customer satisfaction, keeping the competition out, and rationing resources to maintain your run rate and relationships.
3. High-risk accounts have high future potential but currently are low performing. They usually represent new business opportunities where you have some limited presence. It is important to continually qualify the opportunities and your resource investment. Carefully position yourselves in a count to compete for strategic business to build your position. Monitor your conversion ratios, new business gains, relationships built, and cost of your activities within these accounts.
4. Growth accounts should be your primary focus. They provide good revenues today and have the potential for better returns in the future. A well crafted account plan should focus on these opportunities. Create opportunity plans for major new opportunities. Make sure to build your defenses, nurture and grow relationships high and wide, and promote your value to the customer to expand into new business areas and opportunities.

Conclusion

When you segment accounts, it is only a first pass look at your accounts. It is up to you to fill in the details, set your goals objectives and strategies, and focus your execution. Segment accounts and you will be able to better decide how to use your limited resources and what opportunities should have your priority.

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