The Big One
Sales is all about thinking big. Bigger clients lead to bigger profits which lead to bigger vacations, or so the logic goes, and a lot of the time that's true.
But rarely is it that easy. Big accounts are difficult to land, and even then, aren't necessarily a sure bet for big sales. In an economy where most businesses already operate on slim margins, that can spell trouble—time spent courting a large prospect that never pans out is money and resources lost. Or, as Gregg Emmer, chief marketing officer and vice president for Batavia, Ohio-based Kaeser & Blair Inc., put it: "Bigger isn't always better, unless you are talking about profit."
Still thinking big? We don't blame you. But don't go it alone—read on for six tips from Emmer and Diane Morsch, director of sales and marketing for Bristol ID Technologies, Lima, N.Y., for landing large accounts.
1. Avoid Long-Distance Relationships
Say you're located in California and a large, Florida-based prospect wants to meet within 24 hours. Do you have the resources to make that happen? If not, consider staying local. "Logistics play a significant part in success when going after mega-corporations," Emmer explained. "If you are not located conveniently to the headquarters' decision maker, you generally are out of luck. The largest of your competitors (international printing companies or top-20 promotional distributors) have budgets and other resources that allow them to go after business in far away places, something an independent or small business operator generally can't do."
Emmer advised creating a list of local companies and identifying the ones that offer the most direct access. "Work on the top two or three at a time," he suggested. "Once a prospect becomes a customer, continue to move down the list."
2. Don't Sell on Price
Large companies have more leverage than smaller ones in regard to who they buy from, and if your only asset is low prices, you'll lose out to the lowest bidder—or be forced to become the lowest bidder yourself. "Selling on price guarantees that you will have to sell every project every time," said Emmer. "And it guarantees that your margins will continuously decline as the slow-motion reverse-bidding auction drags on."
Instead of price, focus on solving problems. Emmer recommended researching a prospect's needs, whether it's sales, customer loyalty, employee retention or something else, and finding a way to meet those needs. "[If] you position yourself as an asset to your client that works to bring about the specific outcome the client wants, they will continue to work with you long-term," he noted.
3. Clear Your Schedule (and your wallet)
Morsch cited time and cost as the two biggest challenges in working with large accounts. "The sales cycle can be four to five times longer for large accounts compared to small- or medium-sized ones," she said. "Also, many larger accounts require compensation of some kind to do business with them—for example, rebates or discounts. This has to be factored into the overall cost of the sale."
Ultimately, that can make large accounts less lucrative than they appear. The time required to land one large client might be spent on several smaller ones, resulting in greater total sales. "A single $25,000 order from a large account will likely have less total profit than five $5,000 orders from five smaller accounts," Emmer explained. "And the total time necessary to write the five orders might be less than the single big order. This can be further complicated if you realize that while salespeople are investing their time to hopefully get the big order, other business they could more easily get is being ignored."
There's no guarantee a large prospect will become a buyer, even if you put in the requisite time and effort. For that reason, it's best not to stake your entire business on large accounts. Target them where opportunities arise, but make sure they're not your only source of revenue. "Large accounts can be very rewarding, but it is wise to have a variety of account types in your portfolio," Morsch advised.
"A good rule of thumb is to look at each account and analyze how your business would be impacted if you were to lose that account—not only from an immediate financial standpoint, but also long-term," she continued. "How long would it take to replace that revenue and what would the cost of that be? This could move you to work on mixing up your current blend."
5. Don't Settle for Approved Vendor Status
In theory, approved vendor lists are a good way to gain trust with large clients and ensure repeat sales. But there are downsides. For one, getting on the list may require giving deep discounts to the client, which means reduced profit margins for your business. For another, the lists only establish your business as an option—not the option. View approved vendor lists as a starting point, not the end goal.
"Vendor and bid lists forever put you at the back of the line, after all creative and development is done," said Emmer. "It relegates you to working only with purchasing agents and never allows you to become an asset or expert the actual buyer wants to work with. Get the buyer to work with you and they will get you on whatever list is necessary to get you the purchase order."
6. Be Sure You Can Deliver
Over-delivering is okay, encouraged even. Over-promising? Not so much. Research prospects thoroughly to be sure you're able to provide what they need, and enlist help if necessary. "Large orders take a lot of knowledge about production schedules, delivery specifications, financing, penalties, compliance issues and more," Emmer commented. "A distributor or salesperson without the knowledge to manage a large order should partner with someone who does."