Smarter Selling

Innovate your sales method to increase profit margins

By Andrea Hill

(Originally Published by MJSA June 2023)

No matter what happens with a recession in 2023—shallow or deep, long or short—one thing is likely to be true: We must begin to sell smarter and harder.

Most B2B sales organizations tend to focus on selling new products and more of the existing products to current customers, while gathering new leads at trade events, through trade ads, and contacts that present themselves online.

That is a growth strategy, but it’s one that depends on doing more of what you’re doing already. If you want to increase profit margins, it’s time to do something new. It’s time to pursue clients capable of delivering high-er margins, not just incremental sales.

This may seem difficult in an industry where the potential accounts are fairly well-known and there aren’t a lot of new entrants, and it is. But it’s not impossible, and business growth will follow for companies capable of innovating in the sales cycle. Why is sales cycle innovation so important? Be-cause the B2B landscape everywhere has changed dramatically, and with an average of 200 suppliers per independent retailer (according to Buyers Intelligence Group), the risk of being overlooked and replaced is very high.

Embrace Sales Innovation

So, what does sales innovation look like? It starts with building targeted lists of resellers. Most sales departments have a list of 5 to 10 key accounts, usually big names, they would like to pick up. But in my experience, not a lot of thought has gone into why those are the accounts they are targeting. It is reminiscent of the ’90s and early 2000s, when every jewelry designer thought the holy grail was to get into Barney’s. The truth is, Barney’s was a good fit for some designers but a terrible fit for others. And the fit between a customer and supplier significantly influences the potential for margin.

The first step in sales innovation is to think about whom should be on your list of target accounts. In account-based marketing we call this the ideal customer profile (ICP). An ICP is defined as the type of account that would benefit most from your mix of products and services. Companies that fit your ICP are not only most likely to buy your products, but they are also most likely to value your service offering and become loyal—all of which is the formula for higher margin customers.

Once you have defined your ICP, you begin to look at targeted accounts differently. Many companies discover that the accounts that were on their target list were simply there because of perceived prestige, size, or industry profile. With the ICP to guide you, your target list development becomes more strategic, which is critical for the next step: Expand your list.

In an industry as small as ours, the number of high-profile retailers is relatively small. This focus on high-profile puts an artificial constraint on the number of targeted accounts for your sales team. Your goal is to expand your target list to 100 accounts. The work of creating this list requires research and data gathering to compile information and analyze it.

It will take the better part of the year to assemble a full list. The goal is to have 100 target accounts prioritized in groups of 10. Each time an account is won or lost, a new target account joins the list. Data gathering and analysis should be ongoing, and prioritizations will shift with new information. In the first year, when the list is still being built, you prioritize (and reprioritize) and work what you have.

This intentional approach to target account building is the first step in innovating your sales method, and the surest way to increase margins over time.