I have seen many mistakes made when leaders attempt to build strategies or hire salespeople to win new accounts – most of which I’ll list in my next blog post. Before that part of the discussion, I’d like to share my observation on why it takes so long for salespeople to build their own portfolio of business of new accounts in the security industry.
The first thing to consider is that there are two timeframes of sales throughout all industries. Let’s call these two timeframes Continual and Infrequent. A continual sale is always happening, week after week. Some examples are paper, coffee services, and accounting services. Most of these services don’t even require sales transactions after this initial engagement. An infrequent sale is something that may happen every three to five years, or more. Some examples are copiers, healthcare capital equipment, and security installations.
The second thing to consider is that there are two types of sales. Let’s call these two types of sales Transactional and Sticky. A transactional sale doesn’t require much from the salesperson and there is typically turnover in the vendors. It’s easy for salespeople that sell transactional types of products and services to win new business. It’s also easy for them to lose business from current accounts. There is little to no loyalty with transactional sales. Examples are packaging supplies and HVAC maintenance services. A sticky sale is very difficult to win from an incumbent. Even if the transactions happen every five years, customers of sticky sales like to stay with their current vendors because of difficulty in changing or fear of the devil they don’t know. Examples of sticky sales are IT services, payroll services, and security installations.
I’ve created a table below to illustrate the above paragraphs, and where the four characteristics intersect.
|
|
Continual |
Infrequent |
|
Transactional |
Transactions happening weekly, giving frequent chances to win easy new business. Examples can be from any commodity like paper or coffee. |
Transactions that happen every three to five years, or more, but are also easy to win from current vendor. A great example is the copier industry. |
|
Sticky |
Weekly sales but also very intimate with the customer. The customer relies on the salesperson. Examples could be accounting or payroll services. |
Security projects live here. They happen only every few years, and they can be difficult to steal from the competition. |
The quadrant that you should examine is in the lower-right: Infrequent and Sticky. In this quadrant, an opportunity to compete on a project comes along every three to five years, and it’s very difficult to influence a customer to move away from their current provider. This is where security sales are.
The reason it is so difficult for a salesperson to build a book of new business quickly in the security industry is because of the perfect storm of having a low probability of winning a project away from an incumbent and only getting a chance every three to five years. It’s simple math, but it’s also a very complicated scenario. Once leaders understand this, they can make the appropriate decisions … which I will discuss in our next post.
