Do Or Do Not. There Is No Try.

December 16, 2015
Thomas F. Fitzgerald, CPA 

I’ve never been a Star Wars fanatic but like most people, I’ve been a casual watcher of these hugely popular films. To me, the most interesting character has always been Yoda. Inspired by George Lucas’ fascination with Eastern philosophy, Yoda personifies the power that comes from a life dedicated to learning, discovery and self-discipline.

“The Empire Strikes Back” featured a scene where Yoda made one of his most iconic statements. Encouraging Luke Skywalker to fully commit to the mission, Yoda said, “Do or do not. There is no try.” He was saying either you do something or you don’t; there is no middle ground. Yoda knew that Luke must have an extraordinary amount of self-confidence in order to achieve the improbable. Luke needed to muster the courage and the skills necessary to “Do” the monumental thing that, we later discovered, would earn him a prominent page in the Rebel Alliance’s history books.

Yoda’s wisdom comes to mind when thinking about sales practices, discipline and discovery. As I see it, “Do” suggests that sales professionals implement those industry best practices that have been proven to boost bottom-line profitability.

The Council for Research on Distributor Best Practices (CRDBP) published a breakthrough report, “Customer Stratification: Best Practices for Boosting Profitability.” One of the study’s many important discoveries is that existing customers buy a whopping 67% more than new customers.  That means legacy customers will spend more dollars, on average, than most any prospect will buy from your company this year!Clearly, your sales people can “Do” more by focusing on your best, most loyal customers. That’s where Customer Stratification comes in. As defined by the CRDBP, Customer Stratification tests your customer database using the key metrics of buying power, cost to serve, loyalty and margins. The result is the segmentation of your customers into four groups, as follows:

Think about how Customer Stratification can help you improve sales efficiency and effectiveness. Objective data infuses the sales process with greater confidence. Your sales people can spend more time growing relationships with the Core customers who represent your most loyal and profitable group. Opportunistic customers who do less business with you than their buying power suggests might be selected for upsell opportunities. Marginal and Service Drain customers who do not contribute meaningfully to your bottom line should be serviced using labor-saving technologies and strategies that serve their needs without exhausting your capability to service your key accounts.

Don’t get me wrong. This article is about salespeople – not Jedi knights in training! You should have a strategy to prospect for new business. Depending on the industry you serve, an attrition rate of one in ten (or more) should be expected. Clearly, prospecting and qualifying must be part of your ongoing business plan.

What I am saying is that we can learn a lot from industry leaders. As I see it, distributors who choose to “Do” best practices will separate themselves, more and more, from those who “do not”. I can’t think of a better place to start than with Customer Stratification, a best practice that is essential to helping distributors like you grow more sustainable and profitable businesses.

Star Wars is a registered trademark of Lucasfilm Ltd.

Thomas F. Fitzgerald, CPA
Thomas possesses over 40 years of experience driving proven results in corporate financial management, spanning the scope of strategic planning, merger & acquisition, market/product targeting, sales plan integration, operations control & review, cash flow management, capital acquisition, income tax planning & compliance, wealth preservation planning, and enterprise resource planning design...
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