Written by: Rajendra Singh Sisodia
About the author: ex Executive Director, Indian Oil Corporation | Chairman, Bitumen India Forum | Strategic Advisor & Consultant | Globally acclaimed Speaker | Mentor to Startups | LinkedIn 19000+
Focus on Sale in “Others Category” with application of 80:20 principle is bound to make you achieve the Targets
Focus is always on major or high volume customers to achieve the Target Volumes & Market Share
In all high level review meetings either the focus is on to increase the sale/ Market Share or to firm up strategies/action plans for 20% customers who contribute 80% of the total volume. In most of the cases almost all the time is devoted in discussion of Sale to top 20% customers & practically no time for discussion on “Others Category” customers/ sales. In contrast to this, the global statistics indicate that in some cases the contribution of Sale in “Others Category” may be as high as upto 40% of total sales. Hence I am writing about strategies to focus on this category of Sales.
No focus on Others Category as number of customers is very large
As mentioned above, since focus all around is on sales in the major categories & major customers, the sales person on ground also concentrates on major accounts with little or no focus on small volume customers in Others Category. As a result sale in this segment is neither certain nor assured but with contribution @ upto 40%, this can make or break the performance against targets. Generally the justification given for not attending to this Category is a very high number of customers which requires a huge amount of time to contact or attend to such customers. Somehow, this justification gets accepted also, resulting in no focus on customers in this category & the life goes on in a routine way.
How to strategies for capturing sales in this category
As they say there is “No gain without pain”, the best way to handle this category is to list down all the customers with sales potential in descending order. Now out of this list, pick up top 20% customers contributing 80% of the volume in Others Category. This way the number of customers from the large list will reduce to only 20% of the total number of customers. Say if the total customers in Others Category is 200 then you have to focus only on 40 customers, which should be manageable yet giving 80% of the Volume. This way it will almost cover the Others Category sales & will certainly add to the sales volumes to ensure better achievement of target Volumes & Market Share.
Application of 80:20 principle in major categories of sale will further enhance the sales & market share performance
Not withstanding only Others Category, same principle to focus on top 20% customers contributing to 80% of Sales in each major category will surely optimize sales in these categories as well with same time & effort. As a result overall sales will surely increase resulting in maximizing Sales to improve market share & beat the competition.
The conclusion is, while it is important to focus on large customers & categories of sale, but it is equally important for sustained level of performance to focus on small volume customers in Others Category which can contribute as high as 40% of the total volume.
I am sure that the this will be a good read for all sales professionals and it will be my pleasure to respond to your queries.