The dream of salespeople is to only work with prospects and customers who are easy to close, friendly, and who respect the value you bring to the table. These are ‘profitable prospects,’ and they’re the unicorns that salespeople spend careers pursuing.
But what is a ‘profitable prospect’? Is it the one with the most margin, the one that generates the best commission, the one that gives the most referrals or the one who closes fastest? Or a combination of all of these?
How do we begin to define and create a pipeline of profitable prospects – not in ten or twenty years like it takes most salespeople – but rather define and find those prospects today?
That’s what we discussed with David Shriner-Cahn, host of Smashing The Plateau and Going Solo. He coaches salespeople and entrepreneurs on how to work with more profitable prospects.
Because we’re trimming hope from our sales strategy, we’ll use the acronym TRIM to guide us through creating a system with a trigger, ensuring it’s repeatable, building in ways to improve it and of course, ensuring it’s measurable and getting us results.
T – Trigger: David explained that finding the most profitable prospects is something that doesn’t have to be done each day, but should be done at least annually. Because our industries change faster than ever, it’s important that we regularly re-assess our clients on a variety of factors so we can continue to refine who the most ‘profitable’ prospects are. That’s why David recommends putting a ‘prospect review’ on your calendar as an individual or more ideally, as a team so that you can review your existing customers and rack and stack them on the metrics that are important to you.
R – Repeatable: To make this process repeatable each quarter and put some actual metrics behind it (instead of simply guessing at which type of customers you’d like more of), David recommends writing down the name of each client on a spreadsheet. The first column should be the net income that client produced, percent of profitability in dollars, and how easy they are to work with. Once that’s done, rate those existing clients from 1 through 5. That will give you a visual representation of the dollars and ‘ease of working with them’ that determine a profitable prospect.
From there, you can decide to pull the prospects that are likely to be low-rated clients or simply de-prioritize outreach to them in favor of pursuing the types of prospects who have a higher chance of becoming a highly rated customer on next quarter’s customer profitability review.
I – Improvable: Once this exercise is completed, you’ll have a much better idea of what constitutes a profitable prospect. However, next quarter or next year, things will change in your business and with your prospects. You may decide to make ‘ease of working with’ as a higher value than profitability or decide that you want to place more focus on higher-volume customers due to the cost of supplying your product/service. To keep this system up to date with where your business will be in six months or a year from now, ensure you re-evaluate what’s important in your personal and professional life and align your customers (and prospects) accordingly.
M – Measurable: To ensure this system is producing results, match last year’s spreadsheet with this years’ most recent customer ratings. You should see more profitable customers this year if you re-aligned your pipeline and outreach with how you rated last years’ customers. David also recommends that you take a look at how much time each customer is taking based on gross revenue as it can reveal opportunities for efficiency so you can continue to create systems not just for sales – but for delivery of your product or service as well.