My entire career has revolved around sales and business
development. B2B consulting has always been a part-time thing, something I did when
time permitted. I’ve had my own direct customers and have worked through
different consulting firms. Yet, there’s one thing that has consistently
surprised me about the companies I’ve worked with: Many think they’re well-known,
when in reality, they don’t know enough about their customers, and their
customer’s don’t know enough about them.
So, why do so many companies think they’re well-established, when in fact, they’re not? Well, in many cases, it’s due to complacency. Sometimes it’s because they believe their own hype. In other cases, it’s because they think their marketing and sales are working perfectly. Regardless of why, it suddenly becomes a complete surprise to them when they finally learn that not only do their customers not know everything they do; many don’t know them at all.
An Example of Complacency
I once worked for a company whose owner was convinced that his company was well-known. He assured me that not only did customers know them, but that they considered his company one of the industry’s most important vendors. To prove it, he gave me a list of customers from an industry trade publication, one that catered to his industry through multiple member associations. In his view, only high ranking members of the associations had the list, thereby putting him and his company among a select few.
Now, truth be told, this company didn’t provide consumables or raw materials. They didn’t sell the same things to their customers day-after-day, week-after-week or even month-after-month. Instead, they provided industrial finished goods and upgrades to manufacturers. Their sales cycles were long and their solutions were aimed at improving plant efficiencies. Business was slow and the owner was convinced that it was merely due to the bad economy.
Going back to that list, I asked myself whether or not it was a true representation of the market. So, I chose one state to review. The listing showed 15 companies within the state. However, over the next two weeks, I uncovered a total of 43 customers. The original 15 included five that went out of business and four that were acquired by larger entities. Of the six that remained, only two knew of the company. In fact, I only found one contact that had ever placed an order. Unfortunately, he had moved on to another vendor by the time I contacted him.
So, there were 28 customers that had never even heard of the company. 28 customers that had never been contacted. 28 customers who had no idea what the company did or how they did it. 28 customers that were completely ignored. 28 customers that weren’t on that all-important aforementioned list. How did this happen? Better yet, how could a company ignore so much potential? Simply put, the company didn’t know how to use a gap analysis to define the opportunities within their market.
The table above is an example of a gap analysis for a single customer. You can read more by going to: Performing a Sales Gap Analysis by Customer
Understanding the Gap Analysis
A gap analysis is nothing more than a statement of the business you have now, versus what remains to be pursued. It is a tool that forces your salespeople to define the sales opportunities with each customer. Multiple customer “gaps” are used to define the potential within a territory. Multiple territory “gaps” are used to define the gap within the market. It is the ultimate tool to defining market share and it’s critical for any company that wants to understand what their customers need and why they need it.
This information was used to define sales budgets, forecasts and marketing expenditures. We needed to define where the opportunities were and how best to close them. The gap analysis forces salespeople to hunt for this information, which in turn forces salespeople to know their customers. The goal was to rebuild the company’s reputation by getting back to basics: Understand the customer’s business and the company’s potential for sales.
You can read more here:
Use a Sales Gap Analysis to do a Market Gap Analysis
Sample Sales Territory Gap Analysis Excel Sheet With Pie-Chart
Perorming a Gap Analysis on a Sales Territory
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