Selling Skills Blog

QUALIFYING ACCOUNTS BY ‘EXPECTED VALUE’ IS A GAME CHANGER

Posted January 25th, 2022
QUALIFYING ACCOUNTS BY ‘EXPECTED VALUE’ IS A GAME CHANGER


Most salespeople will agree that QUALIFYING accounts accurately is one of the most important selling skills a territorial salesperson needs to maximize time, effort and resources with accounts in their territory that have the greatest sales potential for their products and services. Accurate qualification also effects how you classify your accounts, set up and implement call cycles, and cover your territory. In fact, all significant ‘time-investment decisions’ made by salespeople in the field depends on accurate account qualification.

 

A lot of salespeople qualify accounts by determining the Account Potential (AP) for an account and multiply that value by their Estimated Share (ES). For example, if a company is going to spend $1M this year for certain products and you have a good product fit for 40%, then the Sales Potential (SP) for that account would be $400K. Although, that’s a lot of revenue, it’s not enough information for you to classify the account and make an accurate time-investment decision.

 

You need to determine your chance of winning the business which is called the Probability Factor PF). For example, if you determine you only have a slight chance (20%) of winning the business you now have $1M x 40% x 20% = $80K. So your Expected Value (EV) for the account equals $80K. On the other hand, if you determine you have a very good chance (80%) of winning the business your Expected Value would be $320K. With this additional information you can now make a much wiser decision on the value of this account to you and how much time you should spend with it in comparison to all your other accounts. Often, it’s wiser to spend priority time with an account that has a lower Sales Potential if it has a higher Probability Factor. You need a good Probability Factor Chart to master this skill.

 

Qualifying accounts by Expected Value, will enable you to maximize your time with accounts in your territory that have the greatest real sales potential for your products. That’s key to success! To learn more about this 21st Century Selling Skill please visit my website and review my other courses and contact me: http://www.21stcenturysellingskills.com/courses.html

 

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