The ultimate goal of every sales system is to develop and nurture a handful of ‘partners.’ These are customers who are so committed to you that they form the foundation of your revenue. Let’s unpack this.
What’s a partner?
A partner is a client who has developed an exceptional degree of trust in you, relies on you, and expresses that trust and relationship by buying almost everything they can from you.
Just like with the other processes, there is, with this process, an output which should be measurable. It may be a bit trickier though, because of the somewhat subjective nature of our definition.
In my seminars, I ask the question about partner:
How do you know one if you have one?
In some industries, you know you have a partner because they sign a contract. In my last employment, I was part of the negotiating team that negotiated a “systems contract” with the organization that was my biggest customer. I had a $5 million-dollar territory prior to this. When we finally signed the contract, the client had contractually agreed to buy $7 million dollars a year, more than doubling my sales territory. They were, clearly, a partner. We knew it because they signed a contract.
In some cases, then, the way you determine that you have a partner is by the signing of a contract.
But those cases are rare. If you are going to create a partner, you must have a way of knowing when you have been successful.
In my seminars, I have people list characteristics of a partner for their business. While the details vary, the principles remain the same. There are subjective factors, like trust and communication that are difficult to measure. There is always one objective factor which should be measurable – a partner buys almost everything they can from you. While it is difficult to have 100% of a customer’s business, I’ve always used 75% as the threshold for defining a partner. In other words, if you have less than 75% of a customer’s business, they may be a great customer, but they are not a partner until they trust you with a larger commitment.
In order to measure that, you need to know two numbers: the potential in that client for purchases of your goods and services and then the percentage of that potential that you have obtained.
I call the measurement of potential QPC. That’s an acronym that stands for Quantified Purchasing Capacity. QPC answers this question: “If this account bought everything they could from me, over the next 12 months, how much would that be?”
Imagine what could happen if you were able to capture QPC for every account. This exercise can be an eye-opening, transformational initiative for a selling organization. The amount of potential, when it is quantified and verified, is almost always far larger than almost anyone anticipated. Even seasoned sales reps routinely overestimate the percentage of a client’s business they actually enjoy, typically because they underestimate the QPC.
(Note. For a complete description of measuring potential, see Chapter Five of “11 Secrets of Time Management for Salespeople.”)
When you have defined what a partner is for your business, and then determine how many you have and who they are, you’ll find they are the most profitable of all your customers, generally providing 50 to 80 percent of the gross profit, and almost all the net profit. Not only are they most profitable, but they are the easiest to deal with, and the most committed to you. In a sense, they are the backbone of your revenue stream, providing the revenue and profit that allows you to do almost everything else.
That realization can inform the entire thrust of your sales system, helping to determine, for example, which prospects to invest in, and how to direct the sales team. In one sense, creating partners is the ultimate objective of every sales organization.
After having defined a partner and measured their impact on your business, you’ll be committed to creating more. Use this guideline: Typically, somewhere between three percent and five percent of your customer base can and should become partners.
To begin to use this principle to enhance your sales system, create a goal for the number of partners you’d like to create each year for the next few years. Once you have a goal on paper, then you can proceed to develop a plan to reach that goal.
Creating PartnersAsk yourself these questions: “What would have to happen for a client to become a partner?” “What can we do to make that happen?”
Here’s an example of the kind of thinking those questions prompt. Working with one of my clients, a B2B seller to manufacturers, we determined that:
• the client would need to know several people in the selling organization, in addition to the sales person.
• the client would want to know the seller’s senior executives.
• the client would want to have purchased a number of things for a period of time.
• the client would need to visit the seller’s facility.
Each of these experiences were designed to build a relationship with the client, and to instill in him a greater degree of familiarity and trust with us.
We then determined which clients were candidates for a concerted effort and put in place a sales process to make all the above experiences happen with that group. We created a check list for each of our potential partners, and methodically worked to create the experiences we had identified.
That’s how you develop partners, systematically and methodically.
At this point you should see a trend. In order to begin to build a sales system, you must understand the fundamental sales processes. When you have identified each of the three processes, you can then (1) create goals for each, (2) create an effective system for accomplishing those goals, (3) measure the important elements, and then (4) continually refine those processes forever.