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Hunters And Farmers…….Again

by David Brock on May 30th, 2017

There’s a round of discussions going on about Hunters and Farmers.  Underlying these discussions are attitudes, “Real sales people eat fresh meat every day”  (The hunter camp), “We need to develop our accounts to maximize LCV” (Farmers).

I even saw a post  on, “Which is better, a farmer who generates $1M of incremental business, or a hunter who generates $1M of new business?”  It’s as if $M from one is better than $1M from the other—they miss the point that each is developing $1M of incremental revenue!

That’s what sales people are supposed to do, they are supposed to develop incremental revenue!

Hunters do it in a territory, maximizing their share of territory.  Farmers do it in a territory, maximizing their share of territory.

If you are reading carefully, you’ll recognize the hunters and farmers are doing the exact same thing.  The are generating net new revenue from their territories.  A hunter’s territory may be defined as a city, region, country, or industry.  A farmers territory may be defined as a set of accounts.

Hunters may generate revenue from net new customers–organizations that we’ve never done business with or it’s been a number of years.

Farmers may generate revenue from customers who are doing business with us, but with whom we expect to get more business.

Is a dollar from one worth more than a dollar from another?  If our goal is to grow revenue, we want to seize every dollar of spending that’s in our addressable market!  This means finding new business–either from customers who are not currently doing business with us or from accounts that can be doing more business with us.

Whether we have a “new account territory,” or an “account based territory,” sales people are accountable:

  1. They must have a mindset to pursue 100% share of territory and 100% share of account.
  2. They must sell the entire product portfolio.  We may start with one product line, but we expand within accounts and our territories by selling the entire produce line.  Plus that’s our responsibility in executing our companies’ strategies.
  3. They must find new customers–new enterprises, new divisions, business units, buyers within our current customers.  There is a mistaken view that “farmers” don’t prospect.  That’s plain wrong.  If they don’t prospect, how do we get 100% share of account?
  4. They must retain and grow the business. Let me be very clear about this.  We have to keep the business we are getting–this is particularly relevant in subscription, recurring revenue models.  But we have to grow the business–that is adding net incremental revenue to the base, always growing the base.  It may be adding new subscriptions, it may be finding new opportunities in other parts of the business, it may be cross sell of other product/service lines.  Some companies don’t make their hunters accountable for this, I think (with some caveats), this is a mistake.

Forget these ridiculous labels, forget the ego driven contests about who is a “real sales person.”  Our jobs are to drive net incremental revenue in everything we do.  Where ever that comes from is critical to our growth, share and success.

 

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2 Comments
  1. Dave, no surprise that I agree with you. The only caveat I’d add is the cost equation. The heavier pursuit costs to acquire a new logo often exceed those to farm new business inside a current customer. Not always true, depending on a variety of factors that I won’t bore everyone with, but often true. This can make the accretive revenue from current clients more profitable. (Not intending to hint that we don’t need new logo growth, or that it’s less important. Not at all. Just offering a thought about profit/margin/OI as a factor to consider.)

    I find it interesting that most of what I read in the sales blogosphere seems to be related to generating new opportunities or logos and opportunity management. To Dave Stein and Steve Andersen’s point in Beyond the Sales Process, most potential customer interactions happen outside of that opportunity pursuit. Yet, I don’t see nearly as many posts about farming or strategic account management.

    • Great points Mike. The relative costs are something that should be discussed from an overall strategy/management point of view. Clearly, we have to make investments in areas that reinforce the company strategy/priorities and drive cost effective growth.

      Dave and Steve really had it right with their observation that many of the most important customer interaction happen outside the opportunity pursuit. In some ways we might think of that as structured prospecting/nurturing. And it’s applicable not just to current accounts, but to attracting new accounts.

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