The hunter-farmer sales model was invented and first put in place in the American insurance industry in the 1870s. As a subscription model at the time, insurance sales executives had to find new customers as well as collect monthly subscription fees from existing customers. Over time this led to less and less time invested in new customer acquisition. To combat this, two distinct sales roles, a “hunting” sales executive and a “farming” sales executive were implemented. The hunters were chasing new customers, whereas the farmers were collecting monthly subscription fees from insurance customers.
In today’s world, a hunter-farmer differentiation is still regularly used and even more often discussed.
The attractiveness of the hunter-farmer sales model lies in its potentially easy solution for a complex and ever-present challenge: creating high-performing new customer acquisition activities and combining them with the systematic development of existing customer relations.
A big problem of the hunter-farmer model lies in its low motivational value for the sales executives. The hunters’ objective is to work on (often ice-cold) prospects, make them aware of the company’s services and products, get them interested and move them towards some kind of purchasing volition. However, once the hunters are successful, they move back to the starting point and have to start from scratch. To keep hunters motivated, sales organisations try to use monetary incentives. Nevertheless, in the long run most hunters lose motivation and either quit the company or move on to other sales roles.
Farmers on the other side tend to develop an expectation of being “fed” with nicely developed leads and tend to show a limited degree of dynamism.
The hunter-farmer sales model’s biggest shortcoming, however, is its lack of customer centricity. A prospected customer, who (after some time) agrees to put his/her confidence in the sales executive (the hunter), only to then find out that that sales executive is no longer responsible for his/her business, will hardly be delighted by the customer experience.
Our recommendation for the prospecting & account management dilemma is a combination of the hunting farmer and the farming hunter.
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