Are You Selling to the Right Accounts?


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An effective sales strategy starts with well defined segmentation of your current and target accounts.  However, many companies struggle with defining the right criteria to build an effective account pipeline, which then significantly reduces the productivity of their entire sales process.    This post will discuss three examples of how to qualify the accounts you decide to pursue; the existence of vendor programs, the match with delivery capabilities, and account productivity.

Vendor Programs

Most fortune 500 buyers have implemented some type of formalized vendor program. The key considerations in pursuing programs are the strength of relationships a staffing company has with corporate decision makers, along with any differentiators a company can illustrate to the account such as industry vertical expertise, diversity status, or technology expertise.   If your organization can manage long term corporate relationships and/or can provide a unique differentiator then pursuing large vendor programs could prove to be fruitful.

Selling outside of vendor programs either means avoiding companies that have them or providing services that can capture spend outside of the program.  To avoid vendor programs completely translates to an aggressive prospecting strategy that target mid market companies and buyers that have SoW or some other mechanism to bring in contingent labor.  This business, while more difficult to identify, can bring in higher gross margins and better close rates.   If your organization is very strong at lead generation and prospecting and/or provides solutions, pursuing buyers outside of staffing programs may be an appropriate criterion to consider when qualifying your accounts.

Delivery Capabilities

One of the most common problems that I run into with different staffing companies is their inability to deliver for their clients.  In many cases this is due to a mismatch between the staffing company’s delivery capabilities and the success factors at that client.  One of the most common examples of this is the small diversity company that lands fortune 500 clients that want them to deliver like large national recruiting centers.  This mismatch breaks the staffing firm’s business model and fails to deliver for the buyer.

When evaluating companies to target, a little research into rules of engagement, job order volume, and submittal turnaround time can go a long way in determining an effective match thereby strengthening your account pipeline.

Account Productivity

While being able to speak at a dinner party that (insert large well branded company here) is a client of yours oftentimes you are paying for that pleasure.  The idea of account productivity is something that is picking up steam as a way to measure how productive your client base is.  Certainly gross margins are where the story starts, but understanding the cost of the operational throughput necessary to support the account must also be taken into consideration.  Staffing companies could learn something from manufacturing and get a better grasp on what is cost to actually produce a submittal.  I have seen ranges from $100 to $400 per submittal.  Well, if a company has accounts with a submittal to hire of 30:1 with 18% gross margins they must have a low cost delivery model to ensure bottom line profitability.

Account productivity oftentimes can only be measured once an account is landed.  However, having a strong grasp on what accounts make money is an important criteria for account qualification.

There are several different criteria that a company can use to qualify their account pipeline.  The important thing is that some criteria is used and it is consistent with the capabilities of what a staffing company can effectively deliver.  Without developing criteria a company runs the risk of building an account base they cannot effectively sell to or deliver for driving down bottom line profitability.

Delivery, Management, Process, Productivity, Profit, Sales, Staffing, Strategy, , , , , , , Permalink

2 Responses to Are You Selling to the Right Accounts?

  1. Candace Berk says:

    A recent SIA report surveyed 171 large companies (1,000+ employees) and found that the trend for Vendor Neutral, VMS continues to grow. The report showed an 81% adoption of this client segment by 2011. That seems high but to me but the value proposition around savings and risks reductions are pretty strong.

    Additionally, the report shows an increasing desire for these companies to capture more spend -capturing both SOW work that is really time and materials and rogue spend in an organization.

    It seems that large staffing firms will need to figure out a way to deliver cost effectively to VMS clients if they are going to grow revenue.

    – Candace Berk, Comforce (VMS leaders)

  2. Mike Cleland says:

    Candace,

    Excellent points, no question more companies are implementing vendor neutral programs and trying to capture rogue spend. These are critical trends that must be considered when developing a long term growth strategy.