Whether you are a sales leader responsible for an entire team’s performance or a single salesperson looking to hit your income target, Sandler’s KARE tool is a simple, powerful resource well worth spending some time with in Q4. KARE will serve you well as a planning and prioritization tool for closing 2020 as strong as possible... and for setting yourself and your organization up for a great 2021.
KARE helps salespeople by giving them simple guidelines for segmenting their accounts into four different groups. This is an important, often-ignored starting point, because different sales opportunities are driven by different objectives, and they require different levels of prioritization and different strategies. Take a look at the KARE model now and notice first and foremost how simple it is.
Effective segmentation using this bare-bones analytical model prevents you from having to reinvent the wheel every time you approach a new opportunity. It allows you to categorize accounts and identify specific characteristics relevant to your objective as a seller, group those accounts for marketing and outreach purposes, identify the right priorities, and create template approaches so you can maximize your personal efficiency within each quadrant. Let’s take a brief overview of each of the four KARE categories now:
Keep: These are “maintenance” accounts you want to keep doing business with.
They typically offer low growth potential and low risk. They are easy to do business
with and make regular repeat purchases. However, they may be significant revenue producers and may need to be managed accordingly. Do you know what is required from each account for them to keep buying?
Attain: New business you want to win is in this category. They are typically low risk, but with a potentially high cost of pursuit and high growth potential. They are probably already buying from a competitor. Are you hunting for new business because it makes the best commercial sense or for the glamour? How much of your revenue goal is expected to come from net new accounts? What does this mean in terms of your likely pipeline value over the next sales cycle, given your typical close rate for new account acquisition? Are you pursuing new business at levels that allow you to grow, or are you standing still because of high churn rates?
Recapture: These are lapsed accounts. Typically, either you blew it and lost the account in the past, or there was a problem within the account that froze budgets, or a new executive came in and replaced you with one of their favored suppliers. Questions to ask here include: Is there sufficient growth potential? Is the cost of pursuit acceptable? Is there an additional strategic value in recapturing these accounts? Are there decision-makers in the account who still favor your company? Have they simply stopped placing new orders, while still using your product or service?
Expand: Usually the most profitable accounts are those that are already buying and have high growth potential. Your aim here is either increasing the range of products you sell to them or expanding their purchasing into parent companies, sister companies, subsidiaries, joint venture partners, etc. Have you completed a solution “heat map” identifying what they buy and don’t buy…so you can have a clear view of the likely opportunities?
As we enter the final quarter of the unparalleled year of 2020, a few critical insights emerge for sales professionals taking on that question.
The first and most important has to do with the importance of setting KARE priorities strategically, rather than by force of habit. The fact that a given salesperson is most comfortable or familiar or enthusiastic about pursuing (for instance) KEEP opportunities does not mean that these should automatically rise to the very top of that person’s to-do list, or dominate the to-do list altogether. Time and attention are precious. Make conscious choices about where you will be investing that time and attention, and make sure those choices align with your team’s and your organization’s strategic objectives. In our experience, individual salespeople typically overinvest time and attention in the KEEP quadrant and spend less time and attention than they should in the RECAPTURE, ATTAIN, and EXPAND quadrants.
Complicating this picture is the reality that the behaviors, attitudes, and techniques required for conducting a successful pursuit in each quadrant will vary. Not everyone is able to be equally successful everywhere. People with strong “hunter” skills lend themselves more to ATTAIN accounts, while people with strong “farmer” skills tend to gravitate toward KEEP accounts. One big question for sales leaders is: Have you aligned your sales resources to the most important accounts with optimum effectiveness?
Each organization and each team must set its own priorities, of course, but as we close out 2020 and begin laying the groundwork for a stronger 2021, we may want to look more closely at the RECAPTURE and EXPAND quadrants as we establish those priorities. We could end up discovering that many of the people whose budgets declined or evaporated in Q2 and Q3 due to the global health crisis are back on their feet and open to discussing the possibility of doing business together again – in the short term. That’s good news for 2020. In addition, we may find that some of the people we are already doing business with will, if we analyze the situation collaboratively with them as part of a proactive business review process, present major new opportunities that can be developed in the longer term. The cost of selling to an existing customer is widely believed to be on average one-ninth to one-sixth the cost of selling to a new customer. It usually makes more sense to spend your time pursuing these opportunities than it does to hunt down new customers. You may end up deciding that making that kind of pursuit a priority makes sense for you and your organization this quarter.
To learn more, read the full edition of the Q4 2020 Sandler Advisor.