You Already Know What “Luck” Is In Sales, Let Me Introduce You To “Entropy”
Monday, April 19th, 2010
Is the following statement true or false? When you don’t prospect, your account base will always end up in shambles.
True. Very true.
All of us have had times when we’ve gotten lazy and stopped prospecting. Do this long enough and we’ll unknowingly plant a malignancy within our collection of customers. Slow growing at first. But obvious, painful and lethal in the end.
There are two primary reasons why cessation of business development will kill a customer base.
#1, Entropy Always Increases
“Entropy” in this context refers to disorder. In physics, entropy is always increasing. In other words, things in the universe tend to naturally go haywire if they’re left on their own (like children).
Account attrition (i.e. losing accounts) is a perfect example of account entropy. Every Fortune 500 company, on average, loses approximately 25% of their account base each year.
That can’t be, you say! Oh yes it can. We forget that when customers stop doing business with us they typically don’t send us a postcard with the news. They just quietly slip out the back door unnoticed. They slowly fade away.
#2, Unconscious Overreliance On Luck
Most of us work in businesses where prospects (actually, a better term is “suspects”) make unsolicited calls to us inquiring about our products and services.
This is great – we think. I call this lottery prospecting. What are the odds that a highly qualified and desirable prospect will call us out of thin air? Furthermore, what is the likelihood they will fit beautifully in our market sweet spot? I have a guess. Just about zero most of the time.
Building a customer base this way is just as foolish as my Looney-Tunes uncle whose retirement plan is the lottery. It’s based solely on luck.
Over time, this “strategy” based on hopes of good fortune creates nothing more than a large number of high maintenance, slow paying, low revenue and low margin customers. Before we know it, we’re Gulliver tied down by a bunch of Lilliputians.
Conclusion
For these two reasons, and a million more, never forget that business development is the lifeblood of a personal account base and a company.
©2010 Scott R. Sheaffer

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.
