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.