The Perceived Disconnect Between the Value of New Growth and Growth from Current Clients
There is a lot of talk about established (but lazy) salespeople, the value of SDR's, and hunters vs. farmers. Here's something that I think all of those discussions are missing.
There's a common narrative in selling these days: driving new revenue from new customers should be the highest priority. Tremendous books by guys like Jeb Blount, Mike Weinberg, and others provide a roadmap for that approach. For the most part, it’s a good narrative and it is hard to argue with.
The job of any sales team is to generate the revenue that is the lifeblood of a company. If companies want to grow, they need more revenue, and so on... This axiom of finding new customers is valuable, but like most things, when it devolves into zealotry it tends to miss a couple of key points.
The fact remains that it's easier for a current customer to give you $100 than it is for a new customer to give you $20. Your actual ratio may vary, but I think this one's pretty close. Last time I checked, it was all revenue and 100 is more than 20.
Sales pros have known this for a long time. After getting proverbially punched in the face for a while, you start to notice the soft places to land. Your relationships deepen and you get more of your business by referral than by knocking on cold doors. It starts to look like you're not prospecting anymore. Sometimes that's even the case, and that's problematic, but as long as you hit your number...
As a sales leader, you’ve likely seen this happen to team members. Their performance starts to slip. But you can’t let them go. Their loyal customers (though not growing) represent a substantial amount of revenue, and they'll either go with him or take the opportunity to find a new solution on their own.
If the grizzled veteran salesperson won't prospect anymore, you need someone who will. You might hire a bunch of young, hungry professionals to do nothing but create opportunities. You might create boundaries (and blinders) for them so that they're not distracted and encourage them to kick up dust and stir up as many opportunities as possible. The ones most adept at this will be promoted and trained to close those opportunities and voilà! Great success. It'll be just likethe dolphins from that documentary.
Prospecting is absolutely necessary. Somebody's got to do it. However, the infatuation with generating revenue from new business often overlooks one key element of developing the business: increasing your wallet share with existing customers.
I've seen it time after time. The blinders of a prospecting team are so big and so opaque that opportunities to grow within the existing customer base are not even being looked into! I don't know if it's the rhetoric, or the bravado, or the fact that so many of these young salespeople are working at such a breakneck pace that they can only do what they're told instead of thinking for themselves... But real opportunities are left on the table every day because of it.
And the pendulum swings...
So what does a sales team need? A bunch of dedicated hunters, or farmers who've traded their spears for rakes and irrigation? Well, it's a little more complicated than that. For as long as I've been selling, I've noticed that great salespeople hunt for good places to farm, and they continue to hunt as they sow seeds.
Building and managing a sales team is not as simple as creating a KPI or two and having your reps relentlessly purse new business. In fact, that all-or-nothing mindset often creates a problem in exchange for solving another. There needs to be a thoughtful balance of hunting and farming that allow each rep to sell to their strengths while making sure the needs of the organization are met. That means good hiring, good mentorship, and good coaching, and it's hard to get that from an app in your tech stack.
Frankly, I'm tired of the debate. But the more polarized the discussion gets, the bigger the blinders are, and that means there's more to eat for the professionals in the middle who actually know what they're doing.