Sales Quiz: Which Account is Strategic?

SCENARIO: You are selling for a medium-sized company that has ambitious growth plans. Before leaving on an extended vacation where she can't be reached, your sales manager assigned you three new accounts and told you to focus on "the strategic one." However, she neglected to tell you which of the three accounts was the strategic one. Here are your choices:

• Megastores, Inc. This brand of retail outlets is known around the world. They don't normally resell a lot of your product category, but landing them as a customer would give ANY firm enormous credibility on Wall Street.
• Microhard, Inc. This small company is a key player in a market that your company is trying to penetrate. Because they're small, they aren't going to spend much on your offering, but they know everyone in their industry.
• Warbucks, Inc. This company is your firm's largest customer. They buy in large quantities and are always given the largest discounts. They usually threaten to jump to a competitor whenever they're about to cut a new order.

Contrary to popular belief, a strategic account is not a customer that generates a lot of revenue and profits. That's just an "account." An account is strategic if, and only if, your overall go-to-market strategy will fail if you lose that account. That's what makes it "strategic" rather than just "tactical".

Your company's go-to-market strategy is rapid growth, so the only accounts that are strategic are those that have the potential to create rapid growth.

#3 Warbucks, Inc. doesn't qualify because they're already a customer, and they're only buying on price. There's no growth there, because the more you sell to them, the less money you make per unit.

#1 Megastores, Inc. doesn't qualify either. While winning them would be a PR coup, your firm is already established and doesn't need any additional credibility.

By contrast, #2 Microhard promises to get your firm a foothold in a new market, which is exactly where you're likely to find the most growth.

Note that if you were a startup, and your corporate strategy was to create credibility for investors, #1 Megastores would be strategic. Similarly, if your company's strategy was maintain market share, #3 Warbucks, Inc. might be strategic.

Note: The above wisdom is courtesy of Sam Reese, CEO of the giant sales training firm Miller Heiman. Smart guy.

MORE SALES QUIZZES:

• How to Handle "Your Company Screwed Me in the Past"
• How to Handle "I Can Get it Cheaper Elsewhere"
• How to Handle "I Have a Friend in the Business"