Growing ‘share of wallet’ with existing customers is a positive force on both these key metrics because it leverages the investment made in acquiring the customer and it grows the lifetime value. Since share of wallet sits directly at the intersection of CAC and CLV, why do so many sales organizations struggle with it? In our experience, there are usually multiple root causes, but the chief one is the lack of a consistent sales process.
Research by the Corporate Executive Board on share of wallet noted that the “lack of a defined sales methodology encourages ‘cowboy’ selling and discourages multiple product areas and divisions from joining in a sale to capture full share of wallet from the relationship.” Closing the sale to meet short-term goals, rather than solving customer business problems sacrifices the opportunity to increase lifetime revenue.
The majority of sales reps have narrow selling comfort zones, relying on a limited set of selling tools and their familiarity with a partial set of products and services to hit their quarterly quotas. They frequently fail to spot cross-selling opportunities that are more complex, but more valuable.
In the 1990’s IBM recognized that some product lines were growing faster than others, even though they were sold to the same customers and provided equal value in terms of technology, service and support. The solution to IBM’s dilemma was to enable the divisional sales organizations to follow a common methodology called “High Performance Selling.” The approach was modeled after the customer’s buying process and used a ’stage-gated’ standardized, multi-step sales process. Sales people were armed with tools to identify and serve customer needs at each stage of the customer purchase cycle.
Your sales organization can grow the share of your customers’ wallets by leveraging 5 key principles of “High Performance Selling:”
- Build upon the best practices and selling behaviors of top performers
- Map the selling process to the customer buying process
- Establish a consistent sales methodology for all product lines and geographies
- Train all sales staff on the sales process & terminology; including managers
- Provide selling tools for each stage of the sale
By standardizing, everyone in the organization is trained on the common process and expected to follow it. Even customers expect it. A common language about the stages facilitates collaboration across divisions. The early phases of the sales process require sales people to engage customers in high level conversations apart from a specific sale. At each phase, the salesperson and the customer make a mutual choice to move forward which must be clear to the customer and verifiable by the salesperson. Verifiable outcomes are crucial to adherence to the process.
A word about tools. The methodology and tools are interdependent. The methodology gives purpose and context to the tools; the tools improve execution of the methodology. The tools or sales aids are specific to each stage of the sales process, based upon the approaches used by top performers. There are multiple tools at each stage. Sales reps choose the one that is most applicable for the given situation, or choose to use none. Use of tools, however, makes validation of ‘verifiable outcomes’ easier for the rep.
You have invested in acquiring customers and now you want to grow their lifetime value. Growing share of wallet is the solution. Build a sales process that encourages reps to work collaboratively to travel upstream with the customer from individual sales transactions to uncover deeper business issues that your entire solution set can address. I’m interested in hearing about your experiences with the challenges of growing share of wallet. Please make a comment below.
A standardized sales process makes it possible for the entire organization to ‘plug in’ to the sales process in a way that is seamless to the customer. Contact me to learn more about it. You owe it to your own wallet.
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