Not everyone deserves a trophy

Credit: Fox News 2015

Several years back James Harrison made the news for telling his sons they didn’t deserve or need the trophies their team handed out to everyone simply because they participated.  James Harrison being a championship winning NFL player knows what many people forget. Not everyone deserves a trophy.

Not every customer is your most valuable customer.
Not every prospect is most likely to close.
Not every sales person will exceed quota.
Not every sales territory is the same.
Not every project is fund worthy.

Your most valuable customers have low acquisition cost and high lifetime value; it didn’t cost much to get them and they’ve spent a lot of money with your organization. They deserve a trophy. Should you cut or trade some lower value customers? Absolutely. Send them back to the minors, supported at a level where value is exchanged profitably.  When was the last time you segmented your customer base? What criteria did you use? How many times have you been in the room for the conversation about Bob Buys-Alot and the amount of your resources Bob consumed? Too often, after a thorough customer segmentation exercise, organizations learn, Bob Buys-Alot doesn’t or costs too much.

Along the same lines, once you’ve figured out who your most valuable customers are and what traits they have, you can focus marketing and sales efforts on prospects that are most likely to close and be profitable.  Create an Ideal Customer Profile that is trophy worthy. Identify the personas who make or influence the buying decisions in those trophy worthy accounts and focus people, time and money on closing and retaining them. 

We spent 7-weeks with a client who gave every sales person a $2MM sales quota and a geographic territory.  Part of our analysis showed a left skewed quota model, a preponderance of their sales people were not making quota.  A smaller than normal amount were exceeding and carrying everyone, year over year.  Turnover was low at the company, low performers stayed for years, getting the same trophy every year, a $2MM quota and no fear of non-attainment. 

People, time and money are key levers for every executive to manage and unless you’re living on another planet, they are not infinite. Have you been in those meetings where every project got some funding, the peanut butter approach?  Every project manager got a trophy. Every decision has a trade-off, mature products that have performed in the past, may not deserve a trophy and there are clues:

• Market share decline by product family greater than 3% and accelerating
• Average selling price compression or erosion greater than 5%
• Declining or no customer satisfaction rating as compared to the market leader
• Past product portfolio forecasts that failed to meet expectations greater than 10%
• Products constrained by historical routes to market when new entrants are taking buyer preferred alternate routes to market

So hats off to James Harrison, not every person, project, department, or product deserves a trophy.  Need help finding the trophy winners in your organization? Ascendiosa can help.

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