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Increase Your Market Share If you had 100% of the business of 100% of your existing customers, would that increase your market share? Of course it would. Let’s say you just increase the business of your existing customers by 10%. Would that increase your market share? Again, yes. As tough a task as the above sounds, it is far easier than to sell that amount to new customers.
Yes, I’m saying that to increase your market share, give-up on trying to penetrate the new accounts, walled cities and focus on getting more and more from your existing bastions of strength. Then, as these accounts become stronger with your help, those walled city accounts will crumble and come rushing to you for your expertise.
It sounds risky doesn’t it? The bigger risk for you is an existing customer doing more business with your competitors, and we all know your competitors are trying desperately to make that happen.
New Account Syndromes
The biggest handicap to increasing market share is the inordinate amount of time that sales people feel they have to spend getting new accounts. These are tough sales, second only to the toughest, trying to introduce new technology to new accounts. They’re tough because you have no credibility and no contacts that will leverage you forward. Yet, you waste precious time pounding doors and leaving advertisements to generate interest. Sales people cost too much to do that. They should not be used as an advertising arm of marketing.
Answering RFP’s is another time sink and waste of valuable selling time. If you haven’t been involved in the development of the RFP and you haven’t gotten to the P/L leader to understand the business issues, you don’t know how to present your solution so that you stand out as more valuable than the rest. Even if you submit the lowest price, you may not win-over the ultimate decision-maker because price is not his issue – even though everyone said it was.
I’m in sales. I sell my consulting, my books and my training programs. My focus is on my existing customers. 90% of my time is with existing customers, spent learning, observing, interviewing, integrating and moving up. I use and develop my network. As for new accounts, I’ve hired a marketing company that makes calls and qualifies. Once they’ve got a prospect to a point where I can interview an interested leader, I’ll invest to see if I can fit into his solution image. I don’t chase windmills. Unless I have credibility or a coach on the inside, I will let it pass. I invest my most valued asset where I can make the most sales.
The Lowest Price
Here’s how it works. The person responsible for revenue generation and expenses (the P/L person) sees you and your competitors as all alike if he hasn’t associated you with the success of his business. So when it’s time to purchase, he says, “Get me the best deal,” which the functional and purchasing people interpret as price. The best way to get lowest price is bidding – commodity mentality.
This is why you are always in a competitive wrestling match. It’s why you can’t gain share without lowering prices. You’re a commodity that can be easily replaced or substituted at any time. It’s also why you can’t introduce new technology. Even if the operations people say, “This would be great,” the P/L person will say, “Unless the business is threatened, let’s get along with what we have.” “Unless someone gives me a compelling reason, there is no need to spend here.”
What’s worse for you is the subordinates do not know what a “good deal” looks like to the boss, or what he sees as compelling because they haven’t asked for details. For example, “Boss what’s a good deal look like to you or what’s a compelling reason?” Like sales people, they are intimidated and they assume what it should be. Unfortunately they are too consumed with their own initiatives and see the boss’s desires through their filters – usually incorrect.
When you lose a sale in an existing account (negative impact on market share), listen to the reasons – price, financial conditions changed or some competitive tale. The real reason is that the P/L person didn’t see you as anything special to pay more, or he did pay more because somebody connected to what he saw as valuable, or he didn’t see any compelling reason to change and/or buy anything.
Whoever is seen by the leader as a resource - helping him do his business better, will get the contracts.
Recently a semi conductor client of mine wanted to move customer A’s production from one fab to another, to make room for customer B’s production. This would cause Customer A’s unit price to go up, and to make it worse; A would also have to pay $260,000 for new tooling. They proposed this A’s operations and purchasing people, and they went nuts. “No way,” they said. “Do you think we’re crazy? Besides, our boss will fire us.”
They asked for my help. I told them to get to the GM and find out what was critical to his success. We strategized on how to get there and what to do once they got there. They found out through my interview process that capacity was the key to him because in semi conductors when business is good, customers go on allocation and he knew it. The GM’s most important issue was to get his product to his customers or else his competitors would. Knowing this my client’ people went back and came up with a plan to guarantee A his capacity in return for paying the tooling changes and incurring a higher unit cost. Sounds crazy, but A went for it because the General Manager who was responsible for sales and production felt that the guarantee of capacity was far more important for him than the extra expenses.
Had my client not known this, they would have had a tough time negotiating and could have lost Customer A. Had they stuck with the operations or purchasing people, they would have failed. Conclusion: It’s all about the person who’s responsible for what your product or service does for his organization. If you can’t tie into his deal, you’re one of the bunch or you’re not needed.
Your Golden Network
Existing customers are the easiest place to increase market share because you have a Golden Network of strengths. These are people that have benefited from your product/services in the past and those with whom you’ve established credibility. If you ask them to introduce you to higher-level people, not to sell but to learn business issues as it could relate to your stuff, you will probably get there. This is your strength, your leverage to be used. Your Golden Network can transfer their credibility with their superiors to you. This is a giant step to learning what really counts and for you to develop your own credibility and relationship with a leader.
However, many have gotten to the leaders and failed. They blew their chance by being pushy and self-serving. This meeting is not about you or your company. It is personal to this P/L person or direct staff person. This is an interview and you have to get this person talking about his issues, his environment, his threats, and his opportunities as they relate to your world. Your goal is to learn. Most importantly you have to make this person want to see you again. Then when you do come back, it will again be personal about what you can do for him - not his company or his subordinates. These meetings have to be one-on-one and carefully planned and there is a science to this whole process.
Unfortunately, most sales people don’t do this. They meet regularly with the functional person and make an occasional stop in purchasing. They spend no time broadening their presence in an upward direction. Consequently, the sales person is not known by the person with the power to spend or those that have significant influence with him. Your company is thrown in as one of the bunch of good suppliers – at best.
Mark my words here and now. If the P/L person sees you as an integral part of his success (and don’t say it will never happen), competition will not exist, price will be a benchmark only, business you never thought existed will surface, budgets will be created, and you will increase your market share.
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