Managing Strategic Accounts

1. What problem is the customer trying to solve?
2. Does your product or service help them solve this problem completely?
3. What does the customer have to do to make your product work for them the way they want it to work?

 R.I.P. Selling, you will be missed. Selling (date of birth – beginning of time / date of death – sometime between 1999 and 2009) sadly passed away at some point over the past 10 years. Selling had been with us as long as mankind existed. Selling impacted all of our lives and touched many of us through all of our sensory nodes. Selling also had a great sense of humor, like on the car lot, Selling would always play games with us and stir our emotions or during company workshops when Selling would come into our business as an outsider dressed in a sharp suit with all the right answers regardless of the questions. It was simply amazing how well articulated Selling was on his feet. Selling will be deeply missed by all mankind.

Now wouldn’t it be sad if that epitaph were true? That was purely fictional as it has been 100% confirmed that Selling is not dead, in fact, Selling was just spotted at a shoe store in Des Moines last Tuesday.

There’s this common misnomer that those of us that are in Business Development and Strategic Account Management should never “sell” our clients. There are several books on this concept and a wide variety of well publicized opinions at a library or internet connection near you. Well, is selling really dead or are we just packaging it differently? We have conversations, we build relationships, we show strategic value, we drive towards return on investments made in our product or services, the list goes on – but in essence, aren’t we really doing all of that with one end goal in mind – to sell something?

We dance around the idea of making sure that we are not making our clients or prospects feel as though we are actually trying to do just that. When did “selling” a product or service become a bad thing? Why is selling getting a bad rap? I mean, if you are successful at delivering value and positively impacting your target audience’s environment, wouldn’t it be a disservice NOT to sell them?

I think what we want to avoid is not the concept of selling, but the uncomfortable impact of “pressure”. You can sell me something without applying any pressure whatsoever and if successful in doing so, then we have just begun cultivating our relationship at another level. Pressure is replaced with Value and those that understand that Value just get it, they understand the impact that it can have on their life, their organization, their objectives, etc.

Selling is very much alive. Now what’s it going to take for you to drive this concept home today?

Michael Good

Vice President

1. Assess what you know about the business you have with each of your clients – think about degree of loyalty and share of spend relative to your competitors
2. Identify business that is at risk, and take steps to prevent that loss
3. Identify opportunities for growth, and put a strategy in place to capitalize on them

A new season of (American) football has kicked off here in the US, so millions of us have also started playing Fantasy Football. As I was reviewing Week 1 results (http://www.nfl.com/fantasy) and making a few changes to my fantasy team and lineup, I noticed several parallels between fantasy team management and strategic account management:

Know and leverage your strengths – Every fantasy prognosticator (yes, people do this for a living) maintains a list of studs, duds, and sleepers. Your customer/prospect list no doubt has the same. Spend your time and resources accordingly. Challenge yourself to spend as much time with your sleepers (currently low revenue but high potential) as you do your studs (largest revenue/most profitable customers).  

Continuously reassess your competition – In most fantasy leagues, your team plays a different opposing team each week. Successful players adjust their lineups accordingly. Strategic Account Managers should too. Our competitors are constantly releasing new products or services or trying to change their tactics in approaching our customers. Monitor this competitor activity as closely as possible – even talk with your customers about it. Ask them what they think of your competitor’s latest release – this will give you a chance to hear their opinion and also give you an opening to reiterate why your comparable product is superior.

Monitor the news – Just like fantasy footballers monitor injury reports and who is practicing well each week, we Strategic Account Managers need to stay abreast of what’s going on within our client companies. A few specific suggestions: attend public company earnings calls to know how their business is performing and what they’re expecting in the future, set up Google alerts to deliver news and press releases on your client to your inbox, subscribe to client company newsletters and newsfeeds.

Maybe managing strategic accounts can be a little more fun (not that it isn’t already) if we liken it to fantasy football more often. Game on!

I read recently that the Customer Experience is what your customers deserve.

What are you giving them? You should really reach out to them and find out. You would like to, but it’s just not in the budget right now, right? Well, then, you should wait. I’m sure the customer won’t go anywhere while we wait for the economy to turn around. In fact, it has been so easy recently to bring in new customers that this whole concept of making sure that we are looking after our existing customers is probably just overrated hype. We can always replace them with new ones.

________            

OK, I’m sure you felt the sarcasm in the scenario above. It was not meant as a rant, but more as a simple translation of what some organizations are trying to say in a far more politically correct manor. Don’t you think it really sounds odd when translated?

The thought of cutting back on the one thing that can help your organization persevere through difficult times is baffling to me. Product development is not going to stop the bleeding – especially if they are not able to learn from their customers which problems need solved. Finance is not going to solve the problem by slashing budgets – that will just drag out the inevitable if left unaddressed. Business development is not going to solve the problem – how hard is it to maintain or grow, if for every new customer you have walking through the door, you have one or more existing customers walking out another door or decreasing the amount of business they are doing with you?

Therein lies the problem, and it is your responsibility to be part of the solution! Yes, YOU! You already know those companies that align the voice of their own customers with their key growth objectives have a far better track record, through good times and bad. Just look at your competition, it should be obvious to you which of your competitors are not using this proven business method within their own walls. While your business development team is sharing your value prop with the world of prospects and out trying to exploit your competitor’s weaknesses while refining their competitive differentiators, you should be making sure that the customer intelligence and actionable data is being compiled and there are strategies being developed to maintain and grow your EXISTING clients! The best way to do this is by continually challenging yourself and your program to be best-in-class. Not just best-in-class by definition, but best-in-class as in “getting results.” The rewards for this discipline will deliver a return on investment that far outweighs whatever risks would be involved.

There is an elephant in the room and he’s looking at you!

Prioritize and execute – it’s up to you.

Michael Good

Vice President

So many accounts so little time. You’re probably thinking…not a bad problem to have. And I agree. But this issue routinely presents companies with several important decisions. Which accounts do I assign to my best people? Which accounts are worth salvaging when issues arise? What kind of salesperson do I assign to my accounts that are strategically valuable, but troubled? Do I provide special training to these salespeople? The list of questions or decisions to be made goes on and on.

The impact of a company’s answer to these questions lands squarely on the bottom-line. An article titled “Working Knowledge” by Robert Kaplan suggests that approximately 40% of customers represent 120% of profit dollars. The remaining 60% add no profit dollars or actually detract from a company’s total profits. So, make the wrong decision about which accounts to invest in and you handicap your company’s ability to grow profitably.

Recognizing the importance of this decision, at Walker, we have developed a framework that enables companies to consistently (account-to-account) determine the total strategic value of each customer. The three keys are in the criteria we use to determine the strategic value of an account. We call the components the 3 P’s.

·         Profitability

·         Potential

·         Partnership

Understand where each of your accounts resides on these three dimensions and you’re well on your way to helping your company make its most important resource and investment decisions.

Noah Grayson
Senior Vice President

I’m getting ready to attend the PGA Championship this weekend. As opposed to other sporting events you may attend, I find that it pays to do some prep work before attending a major golf tournament.

Here’s the challenge: There are 156 players in the field all teeing off at different times and on both the front and back nine (see schedule) for the first two rounds on Thursday and Friday. How do I make sure I see the players I want to see?

Preferred Strategy: Pick 2-3 key holes or locations on the golf course to be at certain times of the day. Be at those long enough to watch a string of groups you want to see come through.

I like this plan better than following one group or player all day, though there are thousands of fans that take this approach. 

How does this apply to strategic account management? In lots of ways:

-It’s usually best to not give all of your time and attention to just one customer, even if they’re your best one. (It’s fun to watch Tiger, but you miss a lot of action and opportunity if that’s all you do.)

-Planning ahead for whom you want to spend time with and when will pay off. (There are some great strings of groups. The 12:55-1:45 tee times from the first tee have groups that are chockfull of favorites: Anthony Kim, Bubba Watson, Davis Love, Steve Stricker, recent British Open champ Stewart Cink, and hometown favorite, Phil Mickelson. Park it somewhere and watch the parade of amazing golfers come through.)

-Prioritization of targets is key. Always have a top ten list of people you want to be building or expanding a relationship with and use this to help you manage your time. (In addition to the golfers listed above, I’ll also be sure to catch Fred Couples, Camilo Villegas, John Daly, and of course, Tiger.)

Have a plan and work the plan – it can make your work life as well as your leisure activities as fun and productive as possible.

Sonya McAllister
Principal, Senior Vice President

In a presentation I did at Walker’s most recent User Forum, I included some references to a book called The Art of Engagement by Jim Haudan, the CEO of Root Learning. I enjoyed this book primarily because of its basic premise: creating a strategy is far easier than executing it. The reason? Most organizations don’t know how to bridge the canyons that exist between key groups of people within a company: executives (the top), managers (the middle), and front-line employees (the face-to-face customers).

Similarly, creating an action plan based on customer feedback is the easy part. It is much more challenging to engage the required parts of the organization (corporate, functional, and account-level) in implementing the actions. So, as the book points out, to succeed one must bridge the gap(s) between the people and the possibilities.

Haudan talks about what it means to be truly “engaged” and introduces the concept of the disengagement canyon, which is formed when people:

·         Are overwhelmed

·         Don’t “get it”

·         Are scared

·         Don’t see the big picture

·         Don’t feel ownership

·         Don’t see their leaders facing reality

He uses some great stories to make his points, including scenes from movies, common high school experiences, and the old “You can lead a horse to water…” saying.

The “Art” part of the book’s title refers to a unique technique shown throughout the book of bringing people to a common way of visualizing a challenge (actual hand-drawn pictures that map out what you’re trying to do).

The last nugget I’ll share are three steps in a strategic engagement process. These are:

1)      Creating a Line of Sight

2)      Connecting Goals

3)      Developing Capabilities

My favorite example here comes from the step about creating a line of sight – it’s critical to ensure that people are all interpreting something the same way. Take a common spoken word like “bear” – surely everyone would understand that. When asked what the word means to them, responses included variations like polar, grizzly, teddy, panda; but also deviations like Chicago, market, naked, and the biggest surprise – aspirin! The point is obvious, if there’s a lack of clarity around a simple word like bear, imagine the differences in interpretation that would arise from common business challenges like a “growth-based culture” or “world-class customer listening.”

So if you get a chance, pick this book up and give it a read. Then, let me know your biggest take-away and how you apply it to strategic account management or customer listening.

Brad Linville

Sr. VP, Strategic Accounts

Walker Information

• 80% of our sales come from 20% of our customers
• 80% of our health-care costs come from 20% of our employee base
• 80% of our productivity comes from 20% of our assets
• 80% of the effectively executed action items come from only 20% of our strategic plan

• 20% of your customers account for 115-120% of your net profit
• The next 20% of your customers only add about 5% more to the bottom line
• Incredible as it may seem, the next 55% of your customers are a net wash and add no profit at all
• And lastly, the final 5% of your customers dilute all of your hard work by accounting for net losses of 15-20%

• Retain the first 20% of your customers by continuing to do what you are doing well
• Grow the next 20% of your customers by offering complimentary or new products that meet their needs
• Reduce the cost to serve of the 55% that are a huge investment of assets with no real ROI
• Transform or more likely remove the 5% that greatly reduce your profits and offer no real value

My wife recently made the comment, “I wish we could have a DO-OVER with that”, she said it in a joking manner and given the context of the conversation, it was quite humorous.  I won’t go into the details of what it was about but it got me thinking about Walker's area of expertise, customer strategy consulting.

What if your customers had the chance for a “do-over”, a mulligan, if you will?  Would they still choose you?  We live in a time when you are only as good as your last 10 minutes.  How have you been performing for your customers over the last 10 minutes?  Would they make the same choice to be with you if they could go back to the beginning of their relationship with you?

We work to assist our clients with the complex relationships that they have with their customers and one of the many areas where we assist is guiding them on how to take action based on the segments that their customers may fall into, even if they are “Truly Loyal” to your organization (keeping your clients Truly Loyal is just as important as getting them there!).  What if your customers were Trapped, meaning that they probably plan to stick with you, but may have reasons for not being happy? The contact person does not want to (or is indifferent to) continue working with your company, but will have to do so for the time being. They could switch to your competitor if and when they get the chance.

You should continually challenge your organization with this concept.  Would your customers choose you again, knowing what they know about you now?  Many times, our clients are very surprised at not only the % of their clients that show up as Trapped, but which clients actually feel trapped.

For some companies, it is a wonderful thing that their customers don’t have a “do-over” button based on the simple fact that they may not choose you again!  You control this, you can address this and ultimately, it’s the right thing to do.  Listen to your customers.  Are they trapped?  If so, do something about it, otherwise they could eventually be known as a “former customer” with the first opportunity they have to move on.
 
Michael Good
Vice President

• I’m leading a Yammer group that gives Walker employees a quick and easy way to share and search for best practices and great ideas generated by co-workers.

• I’m participating in Customer Connection, a Walker-led community open to professionals dedicated to improving the customer experience.

• I’m discussing strategies for developing relationships and growing accounts on Walker’s SAM Source, a qualified community for professionals dedicated to strategic account management.

So much of strategic account management is time management – making the right decisions about where to spend your time in order to realize the best results. One of the key questions is how much time to spend with people who are the users of your products and services versus people who are the choosers.

Obviously, we’re all trying to ‘work up’ in our accounts and we're working on building customer loyalty with more senior people – these senior people may be either users or choosers or both. And, some users are more influential on the choosers in your account than others.

How do you maximize your time and influence with these stakeholders? A few basic tips that may prove helpful:

• List all of the users and choosers with whom you interact in a given account. Give each a 1, 3, or 5 rating (5 being high) in terms of their importance/influence.

• Take the amount of time you can spend with a particular account in a given week or month and divide it into 3 equal amounts.

• Spend one-third with choosers rated a 5. Spend one-third with choosers rated a 3. Spend one-third with users rated a 5. And, DON’T spend time with any of the others.

This will be harder than it sounds – it will help if you literally track how you spend your time. As in so many things, time = money. Make your time pay off!
 

Ever wonder what running a marathon and driving double-digit revenue growth with your strategic accounts have in common? Planning. It’s very unlikely you’re going to set your personal record in a marathon if you’ve not first determined what you need to do to achieve it. Likewise, not many strategic account managers just wake up and happen to fall into the big deal that changes the company forever. Both require developing and executing a plan. No doubt there are other important, common elements, but this is a big one.

After looking at both (marathon training plans and account plans) recently, here are a few observations on shared characteristics of effective plans.

·         A clearly defined goal

·         The plan is adaptable – one plan doesn’t work for every person or customer

·         Contains action plans – with agreement from everyone who will be impacted

·         Has a progress review process – reinforces accountability with your running partner or account team

·         Integrates with existing training – leverages the running you’ve been doing or sales training your firm already uses

Have any account planning tips that you would like to share?

Noah Grayson

Senior Vice President

Sit still… pay attention…  can you feel your underwear?  Your earrings?  Your eyeglasses? 

Your most likely answer is ‘no.’  No, because you are so accustomed to how these things feel that they are not noticeable.  In these examples, comfort is a good thing.  In the business life of a SAM, too much comfort is a risk.

Fact: 
Strategic account managers over-invest in the wrong people, and under-invest in the right people.
Even worse: Sometimes SAMs miss the right people completely.

Outcomes: 
Relationships are weaker than they should be.
Value is not demonstrated to senior management at the client company.
Opportunities are missed.

Bottom Line:
Business is at risk.

Nobody likes to feel uncomfortable: it goes against human nature.  But in the world of account management, staying comfortable often means that relationships stay too low in an organization as not enough time is spent with the senior Business Managers and CXO level contacts who can make or break your business relationships.   Yes, the executive suite can be a politically intense place to operate, and the ambitions and rivalries are challenging to negotiate.  But there is much to be gained by stepping out of your comfort zone and into this space. 

Make a plan.  Who are the ‘right’ contacts for you?  How can you get connected to them?  What value will you offer them?  When you have the answers, put your plan into action.  Repeat, until your new relationships are as comfortable as your underwear.

Have you had success building new relationships with CXO contacts?  Share your tips here.

Jennifer Batley
VP, Strategic Accounts