STRATEGIC REVENUE: How To Use The Law Of Small Numbers To Grow Your Sales

I was sitting in my office one day, about 9 years ago. The phone rings and I end up in a lengthy conversation with a print owner. He appeared to have a very good business and wanted to know if I could help him grow it further and faster.

At the end of the call we agreed to meet in about 3 weeks’ time.

Fast forward 2 weeks and I get a call on my mobile phone. It’s the same business owner. He’s calling to cancel the meeting we have scheduled for the following week.

Naturally, I ask what’s happened in the intervening 2 weeks.

Here’s what he told me.

It turns out that one single account was responsible for nearly 35% of his revenue. He had just received notification that the client was cancelling the contract. He received 4 weeks’ notice. There was no written contract in place, so there was nothing he could do.

His cost base was structured in such a way that it could not make the required changes to account for the reduced revenue.

He had decided to put the business into administration.

Most businesses are heavily reliant on a handful of strategic accounts. We refer to that as strategic revenue.
The average in this industry is that 1 account is responsible for 19% of the company’s annual revenues. That is too much exposure to have in one single account.

A good rule of thumb to follow is this;

  • No single account to be responsible for more than 10% of annual revenues
  • Have 10 or more accounts contributing to the top 50% of your revenue

Sometimes, you will lose a strategic account and there is absolutely nothing you can do.

However, often times – there are specific actions you could have taken well in advance.

The video you’re about to watch is from a live event I conducted a while back. It will help you understand what strategic revenue is, and what you need to do about it in your business.

I will show you 5 different actions you can take to proactively protect your strategic accounts.

FREE Resource: I produced a special CONSULTATIVE SELLING CHEAT SHEET that I give my private clients to use. It will help you to sell more effectively to your strategic accounts. You can download it for free using this link.

(Consultative Selling Cheat Sheet)


Join the Discussion!

Let us know what you think. Or ask us anything. Or offer your own sage advice.

The only rule: RESPECT THIS HOUSE! Postings that contain abusive language and/or personal attacks will be cheerfully VAPORIZED. One cross word and – POOF! – your well-thought-out post will be gone in a puff of smoke.

Nick


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