Account Targeting

A Tool for Dynamic Growth

September 24, 2019

As soon as your customer and prospect database is up and running, the next step is to prioritize accounts and advise sales representatives on how best to focus their efforts.

Often, sales teams fall into one of two categories, 1) They focus on closing the largest deal to earn the highest commission, or 2) They focus on closing the easiest deal to allow time to pursue other accounts (an approach often tied to a less than optimal compensation plan). Account targeting helps sales representatives strike the right balance between the opportunity for an increased commission and the likelihood to close. When balanced, this combination can create a more predictable sales engine.*

Our experience with our portfolio companies has helped us to develop a few tactics for creating effective account targeting plans. Here are some of the most effective:

“It is important to emphasize that targeting is a combination of the quantitative output from the weighting formula and the qualitative judgment a sales representative applies based on their knowledge and experience.”

Account Targeting: A Tool for Dynamic Growth

  1. The “$100 Exercise” Often Is a Better Start Than a Complicated Regression Model
    1. In an ideal world, there would be enough historic sales opportunity data to conduct sales life cycle and win-loss analyses to identify key characteristics of the ideal prospect for our customers to target. However, few companies have the luxury of access to that information.

      We’ve found that leveraging the collective wisdom of the management and sales team is a simple alternative. To do so, we create a survey that includes a set of variables of prospect characteristics ideal for targeting. Each survey participant is then asked to allocate $100 across the variables. Whether they decide to place the full $100 on one variable or across many, their allocation should reflect what they consider most important for prioritizing accounts.

      Once you aggregate the allocations from across the team, the variables which are the most “funded” will be those the teams collectively consider most integral to the targeting formula. Using this, the team can build a weighting formula for each account that gives a score for prioritization. Of course, the formula may vary by product, as certain variables are dependent on the product or service offered.

  2. The Target List Should Be a Representative’s Go-To, Not a Mechanical Blueprint
    1. There is a delicate balance to strike with sales representatives on prioritization. If you offer them a list of accounts numbered 1 through 250, the approach to account #15 should be likely close to that for account #17 and fundamentally different than the approach to account #190.

      If not empowered to use their judgment, representatives can be dismissive of the prioritization. So, it is important to emphasize that targeting is a combination of the quantitative output from the weighting formula and the qualitative judgment a sales representative applies based on their knowledge and experience. Positioning account prioritization as a tool for representatives to use rather than as a compulsory rule for them to follow allows them greater flexibility in accomplishing company goals.

  3. Celebrate Targeting-Related Wins Early
    1. The value of account targeting is more evident when sales representatives begin to more effectively hit their targets and see the value themselves. Sharing wins early (e.g., prospects moving through the sales funnel or prospects entering the pipeline) can incite greater momentum—especially for those who have been in their territories for quite some time.

  4. Prioritization is Ongoing
    1. A well-managed CRM should make account targeting an ongoing system to help sales representatives properly target accounts. Similar to how your CRM can load new information to the prospect database as it's developed, it can also be calibrated to calculate a weighting formula and reprioritize accounts as more information is collected. For fields in which information is still in the collection stage, an average score can be assigned to the given account until enough information is received to score it more accurately. Account targeting is not a replacement for real customer segmentation work, as the customer and prospect database and account targeting go hand-in-hand. It is a useful tool, that when used early, can encourage representatives to focus on the right opportunities as you build a repeatable sales flywheel.

*Assuming most accounts are not with large enterprises, which tend to be more sporadic.

“We have seen success deploying this framework within our portfolio.”

"While this framework can consistently be applied across industries and business models, it is important to note that this is not a cookie-cutter playbook."

Serent Capital invests in profitable, growing software and service companies. We typically invest in founder-led companies and often represent the first institutional capital in the company. We are highly selective, choosing to invest in only a handful of businesses each year. Our selectivity ensures that all our companies receive the attention and expertise that they need. Learn more about our portfolio companies.

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