By: Jeff Hoffman
Are you a hunter or a farmer? In the sales world, those two terms describe the strategy a sales rep uses to close deals. Which approach should you use? Well, there’s certainly a place for both strategies in sales, but at times we place too much emphasis on that shiny new account and overlook the treasure trove that lies within our existing portfolio. So for this blog, let’s take a closer look at why it’s beneficial to be a farmer.
- Nurtures leads
- Fosters client relationships
- Cultivates customer loyalty
- Your greatest source of farming is the pool of existing customers to whom you have successfully sold your company’s services and products. If you stick to the customers you have brought into the fold, you may even put cold calling on hold for a bit.
- That may sound unrealistic at first – how will you meet quota without securing new customers? But, look a bit closer and it is really just a function of better utilizing your time to become more efficient with resources by leveraging your current book of business.
The Trick is to Control your Calendar
What is the biggest barrier standing between you and potential clients? — Time! Since the day you became a sales rep, time has become your worst enemy. There are only so many hours in a day and working days in a quarter – so we have to become more efficient.
Think of this example and how it can change your approach…
- You have 210 days in a year
- Within those 210 days, it takes you an average 90 days to close a sale.
- If you can reduce that sales cycle to only 81 days, you’ll have 10% more time to sell
- To do this, you can focus on your existing customers since some of that leg work is already done
- Since they are already familiar with the entire sales process, selling them additional services/products or renewing contracts will not take as much time
- With about 10% of time shaved off the top – you’ll be able to add a few more deals to your pipeline
- The TRICK: The trick to pulling this off is to work on deals that have already reached an advanced stage of the sales process.
Controlling time is not the only way you will close more deals each quarter, you can also master the art of up-selling and cross-selling.
Up-Selling and Cross-Selling Are the Real Winners Here
When up-selling, you use your persuasion skills to encourage the customer to invest in a higher-end product, whereas in cross-selling, you invite them to invest in a related product or service. Both strategies have huge upside when applied properly – and promptly.
Sales reps typically wait six months before calling the client again to sell another product/service, but this is often a lost opportunity.
- Leverage the sweet spot: You need to pick up the phone and schedule a call with them within 21 days from the time they signed the contract
- The three weeks time frame or the “honeymoon” phase is actually your best chance of making another sale
- This means ditching the usual type of conversation you have with your clients when it’s time to sell them another product/service
- For instance, customers who are up for renewal will expect you to call them within 90 days of their next renewal. They’ll likely appreciate touching base in the first few weeks after signing the contract. And, even if you are unsuccessful in your early efforts to up-sell or cross-sell, you will have at least established a good relationship with them.
If they don’t renew the contract and it expires, you need to practice traditional account management tactics. You are looking to make a sale here. Instead, you will contact them after three weeks to ask the customer to provide you with a feedback
After you’ve worked the opportunities that live in the honeymoon phase, you still need to keep that client on your radar. Calling them a week before expiration is far too late. The next step would be to check in 3 months after your close. This is the perfect time to see where you stand and how things are going with questions such as:
- “How do you like our products/services?”
- “Can you please provide us with a “letter” grade to rate our products/services?”
- At this stage, we are moving away from up-selling and cross-selling and instead, using our traditional account management strategies to search for selling opportunities. Our interaction will now revolve around asking for the customer’s feedback.
The Customer’s Feedback
The customer will rate us an “A,” “B” or an “F.” “A” is really the only grade you want at this point. An “A” grade gives you the permission to take the relationship to a deeper level and to broach the topic of up-selling or cross-selling as appropriate. “Bs” mean the customer is not satis ed and you need to try to move them up to an “A.”
The good thing is that when you learn that you are rated only a “B”, the relationship is totally salvageable because you better understand their expectations. An “F” means the customer is not likely to renew the contract and is already in the process of cutting ties with your company. Clearly, no explanation is required if your graded an “F” after three months – it’s time to cut your losses and refocus your attention. It’s also worth examining what went wrong to ensure you aren’t in a similar situation again.
If you want to beat your sales quota, you can’t afford to overlook the customers you already have. And, clearly it’s not about asking them for referrals. It’s about becoming an asset to your customers and finding meaningful ways to deepen your relationships. When you adopt the practice of farming, good things happen to your bottom line.