You’re Making The Number, But Are You Achieving Your Potential?

I’m an unapologetic believer in the concept, “It’s your God-given right to 100% share of customer and 100% share of territory.” Everything I’ve been taught, everything I’ve taught or coached has been around maximizing the full potential in the “territory.” While it’s impossible to achieve, this mind-set totally reshapes the way one thinks of opportunities, growth, and success. It reshapes the way you approach and engage your customers. Whether at an individual or organizational level, we must always strive to maximize our ability to achieve the full potential.

So, I frequently become frustrated in conversations with sales executives and people who focus on their attainment of the number, without having any concept of achieving their full potential. Let’s look at a few case studies.

A number of years ago, I was meeting with the executives of a mid sized technology companies. We were discussing what they perceived as outstanding success with their two largest accounts. They spoke in glowing terms, “These companies are very important to us, they are our largest. We’re growing our presence by double digits every year! We’re being tremendously successful! Things are fantastic!”

I asked a few questions about win/losses in those accounts. They replied they won the majority of deals, most of the time beating the competition.

After they had finished patting each other on the back, I asked, “Do you know the total spend of those companies in your product category?” I quickly followed it with, “Do you know how much that spend has been growing in the past few years?”

They looked at me, their eyes crossed, and they seemed on the verge of saying, “Why are you asking us this, clearly we are very successful, let’s move on.” They didn’t, I think a few may have suspected what I was about to say, so instead they responded, “No, but how is that relevant?”

I then dropped the bombshell, “In each of the cases you have outlined, you have no more than 7% of what they are spending for products in your category. Additionally, their annual spend has been growing at least at the rate that your revenues have been growing, in some cases faster.” I went to the whiteboard, wrote out a few data points about their sales and what their customers were spending. They quickly paled.

See the problem is, they were measuring their success based on their own performance, the goals they had established for themselves. They viewed success as hitting the number. They saw year after year of double digit growth as evidence of their outstanding performance. What they had tragically missed was how they were performing against the opportunity or potential. They were only addressing a small amount of the potential in these accounts. Their high win rates had deceived them, causing them to think they were being successful. They didn’t realize they weren’t even identifying the majority of opportunities in the accounts, or that despite their “success,” their competitors were being much more successful and taking much more money out of the accounts than they were. In short, they were missing huge growth and revenue opportunities. Even worse, because of their share position, while all these customers were extremely important to them, they were relatively unimportant to their customers.

Also, years ago, I was talking to an executive about his company’s largest account. The revenue they got from the account was huge–from their point of view. They were proud of the performance of the account. It was a scientific instrumentation company, they sold to engineers. When he talked about their success, I congratulated him, then asked, “How much should you be getting from this account?” He didn’t know, so I bought two plane tickets.

Over the course of 5 days, we went to each major location of this customer–their design labs, their factories. We didn’t meet with anyone, we just looked at the size of the buildings, counted cars in the parking lot. I told him, “80% of the people in these buildings should be your customer. Do you know how many people that is? Can you imagine the revenue potential that exists?” Over the next 2 years, we executed a plan that grew the revenue 10 times. In the years after that, it grew even more.

Again, this company thought the volume of sales and the continued growth represented great success. But they were looking at it from their own point of view, they didn’t understand the full potential of the customer and hadn’t developed a strategy to go after that potential.

Not long ago, I met with an executive, he ran sales at a large company. He was talking about how successful his team had been. Most people were making their numbers. Year after year, they asked people to “stretch” increasing their numbers. They were growing, they were making their plan. Every year, they celebrated their success at the “100% club.” But their top 2 competitors were growing faster. While the exec knew this, his definition of success was “hitting the number.” Yet his competitors were taking share from him.

We have to measure success by more than the number, and by more than great year over year growth. We need to look at how we stack up against the market potential, how we are growing our share of the total opportunity? Growing our sales is great. We need to celebrate that. But maximizing our performance against the potential offers so much more. Doing anything less is a disservice to our companies our shareholders, and ourselves.

I wish this was limited, but it’s not. It’s also not restricted to the smaller or mid-sized companies. Today, I had coffee with a close friend and mid level executive for one of the largest technology firms in the world. She was lamenting the executives “just don’t get it.” While the numbers weren’t as dramatic as those I outlined, she quickly went through a couple of dozen cases in which this company was not maximizing their penetration and share of some of their most important accounts. See, everyone was focused on the number, and not the potential.

As a consultant, it’s frustrating. I encounter too many executives who say they don’t need help, they are hitting their numbers, they are growing. But when you see different data–share of the account, share of the territory, share of the market segment. When you see growth rates compared to growth in spend, growth of competition, and others; it’s hard not to be frustrated, they could achieve so much more!

More Business articles from Business 2 Community:

Loading...
See all articles from Business 2 Community

Friend's Activity