7/20/2011
I am often asked which is the preferred system for managing sales territories, the account-based method, or a method based on the sales rep? The correct answer is account-based management. At a recent training seminar, it became apparent to me that the return of the account-based system is long overdue.
Managing accounts by sales rep is convenient; it seems like the path of least resistance. But I'd like to outline a simple four-point account management system. Under this plan, a manager will have straightforward and specific guidelines for managing accounts, giving the sales reps and the manager the opportunity to operate at maximum potential.
Account Management Plan
1. Prepare an account analysis. A complete analysis requires identifying all current and potential accounts, with all accounts segmented by potential. For the sake of convenience, I am using a medium market as an example.
"A" accounts are the bread and butter. They are heavy on annuals and, in a medium market, will buy approximately $25,000 per year.
"B" accounts will purchase between $12,000 and $25,000 annually.
"C" accounts must have been active within the last 90 days and spend up to $12,000 a year.
"D" accounts are developmental accounts and are inactive, but there must be a specific plan for turning these accounts active.
"S" accounts are seasonal accounts, such as amusement parks, concerts, and events.
2. Time allocation. Each A and B account needs to have weekly activity. A sales rep, depending on experience, should have five A accounts and up to 10 B accounts. Since A and B accounts are the main target of the competition, these customers must get maximum service. The A and B accounts will also need to have new ideas brought to them on a regular basis.
C and D accounts will need bi-weekly activity. A C account list may have 20 customers, and D accounts are capped at a maximum of 30 customers. (Developing more than 30 accounts at one time is almost impossible for a rep.)
S accounts have a 60-day time period when activity increases, leading up to their scheduled run. Total accounts in this system range from 50 to 60 for a rep to the never-ending 100-plus accounts typically seen at a station.
3. Account list coverage. Weekly planners are the most productive system for tracking the reps' activity. Knowing in advance where the reps are going is essential to keeping them focused on the correct activities and preventing daily emergencies.
4. Account list control. This involves standards of performance the manager determines for each rep. Actual performance is constantly analyzed, so the manager is aware of whether the performance is on target. By tracking activity levels, a manager minimizes the need for call reports ? which tend to be largely fictitious.
Basic Account Guidelines
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A, B, and C accounts must have been on the air in the past 90 days in order to stay on a rep's list. A rep should maintain as many A, B, and C accounts as possible.
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If an account falls from an A, B, or C list, it may be temporarily placed on the D list. However, if the account has not regained its active status within 90 days, it will be removed from a rep's list and given to another rep.
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D accounts are capped at 30 clients. No more than 90 days should be needed to develop and move accounts to active status.
An S account has no limit on days, and its active status is relative to market size and seasonality.
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A rep may claim up to 25 new prospects monthly, but contact with the account must be established and the potential must be estimated within 30 days. After 30 days, these prospects will either be added to the current list or dropped for lack of potential. These new claims are in addition to the D accounts.
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Accounts are not assigned on an agency basis; at the discretion of the manager, agency accounts may be serviced by one or more sales reps.
Using these basic account guidelines can provide the manager and the reps the needed procedures to manage more effectively.
Finally, true account management also involves daily field coaching of the reps. There is no substitute for customer relationships. It is imperative that the manager also have an established relationship at most A and B accounts.
Ten years ago, I would have said that 5 percent of radio stations were using an account management system. Today, I would speculate 20 percent of radio stations have an account management system in place. That is progress, but we still have a long way to go.
Sean Luce is the Head National Instructor at the Luce Performance Group in Houston and can be reached at
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