Riddle me this...
When is a new account worth more than the revenue it generates?
There may be more than one answer to that question, but there is one in particular that is all too often overlooked.
The greatest value of a new account is when it is used as an investment to fund your future success.
This really isn’t unlike the investing for retirement you are hopefully doing. Of course, you could use that money right now and have a little fun with it or just make paying the bills a little easier. But you invest it, knowing that by being responsible, it will make your future easier. The same holds true with the revenue from a new account.
You could take that new account and the revenue it generates to improve your paycheck a little. Or, you could be responsible and make your sales future easier and even more profitable.
Here’s what I mean. Let’s say you bring in a “Top 5” account. If you want that account to provide even greater returns than the associated revenue, invest it by using it to replace a significant number of your smallest accounts that, in total, have the same revenue.
I have recently profiled the books of several producers. Without exception, a new account that has the annual revenue equal to the average revenue generated by the top 5% of their accounts (ex – if they have 200 clients, this would be the average revenue of their 10 largest accounts) would easily replace the revenue of dozens and dozens of their smallest accounts. I would tell you that in some cases it was well over 100 accounts, but that’s just too hard to believe (although it is entirely true).
Think of the additional return you would have if you invested the revenue from a new “Top 5” account by finding a way to pass on dozens and dozens of your smallest accounts. Even though any one may not generate a lot of work, the combined demand of these accounts on your time, your team’s time, and your resources is significantly more than you probably guess. That same time and allocation of resources could be freed up to go get several more “Top 5” accounts, providing an unbelievable return on investment. And you never stepped back in total revenue.
Preparing for your future sales success is just like preparing for success in retirement. Building your portfolio responsibly will provide exponentially greater returns.
Photo by krailathyothayath