Tag Archives: Salesperson

How Do You Reduce Dependence on a Few Customers? Four Thoughts

Situation: A company has been very successful, but one customer represents over 60% of their sales. To grow, the company needs to diversify its customer base. How do you reduce dependence on one large customer? What are the risks involved? How do you reduce dependence on a few customers?

Advice from the CEOs:

  • The key to getting new customers is to dedicate time and resources to the task. Consider hiring a business development professional – a commission based “hunter” who has experience landing big accounts. You may pay this person a hefty commission for bringing in new business, but diversifying your customer base can be worth the cost.
  • If there is shared ownership of technology co-developed by the company and client and the client does not wish to pursue markets beyond its strategic focus, is it feasible to negotiate rights to pursue this business? The larger client will pursue their own interests, not those of the smaller vendor.
  • Perhaps a win-win can be worked out, but it may be challenging – particularly if the client is concerned that use of the technology in other markets could have a negative impact on the client. Use caution. The easiest way for the client to defend itself from a perceived threat is to sue and bury the smaller vendor through legal expenses. Regardless of who is “legally right,” deep pockets can win through attrition.
  • Consider recreating the opportunity. Create your own adjunct proprietary product with your own software or design talent and use this to expand your horizons. Be aware, the large client can still sue if they believe that your proprietary product impinges on their rights.

  [like]

How Do You Manage Employees Expenses? Three Thoughts

Situation: A company does not pay a lot of employees’ expenses but does pay mileage expenses for sales people and a car allowances to the sales manager. Sales people are paid 20% base and 80% commission. The CEO is interested in how other companies handle employee expenses. How do you manage employee expenses?

Advice from the CEOs:

  • If you pay mileage, require that employees receiving mileage allowances to keep a log of business mileage:
    • They should track where they went, with whom they met, what the mileage was, etc. To assist employee compliance while respecting employee time, make it simple using Excel spreadsheets or an online tracker.
    • Don’t pay any mileage expenses without submission of proper documentation.
  • Fire a thief. If you catch an employee cheating on their mileage expenses, let them go. This is an important example for others.
  • For car allowances – ask CEOs of other local companies in markets similar to yours what their policy is. If it turns out that your policy is overly generous, consider cutting or reducing your allowance.

[like]