Do you have a large customer base of mid-sized accounts or do you only have a few large customers you rely on? Your answer to that question will determine your success over the long haul.

Staying Power
I don’t think I’ve ever known of a top producer over an extended period who built a successful account base with a few large customers. What I’ve observed is quite the opposite. Sales professionals who are rainmakers do so year after year with a large number of medium-sized customers.

Experienced sales professionals know better than to put all of their eggs into two or three customer baskets.

The Problem With Selling To Really-Big-Companies

1. They beat you up on price. Everyone is after Really-Big-Companies so the downward price pressure is enormous.
2. You’ll waste lots of time on their government-like bureaucracy. And “may the force be with you” if one of your Really-Big-Customers is a government entity.  Double jeopardy.
3. Don’t be in a hurry to get your invoices paid; they aren’t.
4. They have people on the payroll to keep metrics on your performance. If you fall below their thresholds, you’re out. You’re a number. You have to watch your step on every order.
5. Since they eat up so much of your time, you can only maintain a limited number of these Really-Big-Companies as customers. Do the math. If you have three of these and lose one, you’ve just lost 33% of your sales. In short, you’re very vulnerable. A large account base of mid-sized customers allows you to spread the risk. Remember, 100% of sales professionals lose 99% of their customers over time because of normal attrition. I’ve seen too many examples of sales professionals who thought they were exempt from this universal sales law.
6. You’ll most likely be dealing with the purchasing department. Selling to purchasing departments is rarely a good thing from a sales perspective.
7. Whether you call it supplier reduction or vendor consolidation, Really-Big-Companies are constantly trying to reduce their number of vendors. See number four above.
8. You’ll rarely be selling to high-level decision makers, even if you are able to break free of the purchasing department. You’ll be selling chiefly to mid-level managers who are usually just information gatherers and recommenders.

Sales Tips Wrap-Up
I’m not saying that you shouldn’t take big orders from Really-Big-Companies. To do otherwise is not too smart. What I am saying is that long-term, high producing sales professionals usually achieve their results with a large number of medium-sized customers. This kind of account makeup normally results in better margins, fewer competitors, time savings, reduced credit problems, less account vulnerability and better access to decision makers.

©2010 Scott R. Sheaffer

Related posts:

1. Selling to the Fortune 500 and Other Really-Big-Companies
2. You Already Know What “Luck” Is In Sales, Let Me Introduce You To “Entropy”
3. Why There Is No Such Thing As A Standard Buying Process

Tags: competition, customers, Fortune 500, territory

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