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Managing accounts and targets

A customer living in one salesperson's memory is not a customer of the business. When that person leaves, half the market leaves with them. Account management is turning a personal relationship into an asset the business owns.

Chapter 1 · Lesson 4 of 510 min readBeginner level

Three things make a mature sales operation: a reliable customer record, a target built on logic rather than a wish, and an incentive that drives the right behaviour. Break one of them and you break all three.

1 The customer record: the forgotten asset

  • Identity data: legal name, tax number, address and contacts.
  • Commercial terms: price list, discount tier, payment terms and credit limit.
  • Trading history: orders, invoices, returns and complaints.
  • Contact log: visits, calls, proposals and their outcomes.
  • Account owner: the responsible salesperson, and who covers when they are away.

The customer recorded three times

“Al Noor Est.”, “Al Noor Trading Est.” and “Al Noor”. Three records for one customer, so their balance splits three ways and they exceed the credit limit with no warning from the system. Deduplicating by tax number rather than by name prevents this at the root.

2 Segmenting customers

SegmentDescriptionHow to handle them
Key accountsA few that produce most of the revenueA dedicated owner and an annual plan
Growth accountsSmall today with real potentialInvest in expansion and cross-selling
Steady accountsRegular orders at a reasonable marginEfficient, low-cost service
Draining accountsThin margin and heavy demandsRe-price or exit politely

Not every large customer is a profitable one

A customer buys a lot, but wants daily delivery, returns 15%, pays after 120 days and consumes half of customer service’s time. Measure customer profitability after the cost of serving them, not by how much they buy, and the list of “our best customers” will change considerably.

3 Building the target and forecasting

1
The base

Last year’s sales stripped of one-offs

2
The market

Sector growth, inflation, competition

3
Capacity

Headcount, stock and supply ability

4
Allocation

Across months, regions, products and reps

A target not tied to real capacity is a number for presentation, not for management

Probability-weighted forecasting

Four open opportunities for next quarter:

OpportunityValueProbabilityWeighted
Customer A — in negotiation400,00080%320,000
Customer B — proposal sent300,00050%150,000
Customer C — qualified250,00020%50,000
Customer D — prospecting200,00010%20,000
Total1,150,000—540,000

The rep says “we have one million one hundred and fifty thousand in the pipeline”, and the number fit for planning is 540,000. The gap between the two is the gap between an optimistic report and a budget that can be delivered.

4 The commission scheme

ModelHow it worksWhere it fits
Fixed salary onlyNo commissionTechnical services with long cycles
Percentage of revenue% of salesSimple, but encourages discounting
Percentage of margin% of gross profitThe safest for protecting profitability
Accelerating tiersA higher rate above targetPushes past the number
Tied to collectionEarned once the cash is receivedWhere credit sales are common

Every incentive produces a behaviour — so choose it deliberately

Commission on revenue produces discounts. Commission paid before collection produces sales to customers who do not pay. A tier that jumps at a certain number produces deals pushed from December into January. Always ask: what behaviour does this scheme make profitable for the salesperson?

Lesson summary

  • The customer record is an asset of the business, not one person’s memory, and is deduplicated by tax number.
  • Segmenting customers decides how each group is served and invested in.
  • Customer profitability is measured after the cost to serve, not by purchase volume.
  • The target is built from the base, the market and capacity, then allocated.
  • The probability-weighted forecast is the number fit for planning.
  • The commission scheme creates behaviour, so design it on margin and collection.

5 Test your understanding

Three quick questions

Pick the answer you believe is correct and you will see the result immediately.

1. One customer is held under three different names in the system. The most serious effect:

2. A pipeline holds 1,150,000 in opportunities, weighted at 540,000. Which figure goes into the budget?

3. A company pays commission on invoicing rather than on collection. The expected outcome:

Sources and review: the concepts of customer record management, segmentation, target setting and incentive design as settled in sales management literature. The figures are illustrative. Last reviewed: September 2026.