Relationship Management

A quick, true story -- when delivering buyer insights years ago to a global manufacturing client -- a name we all would recognize -- the client leaders in the meeting were stunned by one of our key findings. Their products were top-notch as expected, but customers of all stripes were unhappy for a different reason. Many hadn't known who to contact for questions or service, and then struggled to access human contact in customer service calls.

On the spot upon hearing this, the COO asked his quality/Six Sigma executive, "What projects do we have in Customer Service?" The quality executive pulled up the file, glanced through it and had to respond that out of more than 100 formal improvements under way, zero were in Customer Service. Talk about a gap in priorities! Let's avoid the cliché, "What gets measured, gets done," and just say, "What was never initiated or finished is not getting done."

To add a powerful metric to any corporate scorecard, why not track the progress on customer-focused initiatives across the company? Then you keep senior managers abreast of projects enhancing customer experiences. Here are five tips to make this work:

1. Carefully select projects according to:
   • The impact on customer loyalty/experience and/or on vendor choice
   • The effort and cost of making the enhancement -- highest priority being projects of high impact/low cost, but high cost initiatives undertaken when impact deemed high enough
2. In B2B, have initiatives underway at three levels – key accounts, business units (product or regional), and corporate or cross-functional.
3. Report upward the # of projects on schedule/late or at-risk. Or with a small number of major projects, report progress.
4. Tie some compensation to goals for individuals/teams responsible for the projects.
5. Include the new metric in a scorecard or other metrics portfolio receiving monthly or quarterly review by senior management

Businesses tout customer-focus as a go-to-market strategy, but can they do that without accounting for customer-focused initiatives?

I'd say no -- no customer initiatives, then no customer focus.

So let's start counting our customer initiatives.

 

The "tangled web" woven in this famous poem is about practicing deceit. Integrity makes life much easier in account managment too, but  the "tangled web" in B2B is the complexity of roles and relationships that must be developed.

For example, large customer-side relationships include purchasing, corporate executives, key decision-makers and influencers by function and BU, and of course end-users. Channel partners add layers of relationships, including for customers behind the channel.

This complexity makes journey mapping the B2B customer experience quite challenging. The array of personas have varying expectations themselves, not to mention within unique customer segments or verticals served. For example, Purchasing and Decision-makers may well have total cost or ROI more top of mind than influencers and end-users, who care more about the core product's ease of use and product quality. Channel partners tend to look more for training and marketing support than direct customers, who seek technical support. But some of these priorities adjust according to buyers in markets as distinct as, say, telecom vs. financial services.

The myriad of relationships and expectations in B2B makes creating the maps all the more valuable, because they help clarify the internal message about what key customers want, from the the variety of personas. Which are the real "moments of truth" to emphasize, for not only account managment/sales, but support, marketing and R&D as well?

B2B journey mapping helps untangle the web.

 

Not a big reality TV fan, I admit being quite entertained recently seeing my first episode of  "Chopped" on the Food Network. This cooking show challenges four competing chefs to create dishes in about a half hour. Each chef must work with the same set of ingredients, but no recipe. They are usually given odd bits such as sardines, or watermelon along with more conventional foods. A panel of judges watches and samples the final creations, then "chops" a loser after each course -- appetizer, entree and dessert -- leaving just one chef standing at the end.

The secret to winning? It was clearly in using practical creativity and resourcefulness. During the episode I saw, Kraft Macaroni and Cheese had to be used in the entree. This very concept disturbed the gourmet sensibilities of these chefs, but it was fun watching each one trying to make something of it and taking a unique approach.

Something similar takes place with account managers trying to win more share of wallet with customers. Key or strategic account managers must be resourceful like the chefs on the show -- by working creatively with available resources and aligning those to fit the demands of their "judges" -- their customers. Where chefs decide how to use available food and supplies, strategic account managers (SAMs) deploy people on their teams, gain endorsements from their executives and cooperation from extended staff and other parts of their organizations.

Like musical conductors, the best SAMs orchestrate the resources at hand. They marshal available technology, expertise, processes and plan how to scale these up according to the changing business needs of their customers. In the Strategic Account Management Assocation's 2012 Trends and Practices Study results, the best indicator of a successful SAM was effectively aligning resources from for customers.

Aligning for a customer means gaining a deep knowledge of the customer's business and collaborating with them on what they want, then in turn, creatively assembling the best solution from one's own company.  An example in the fleet managment business was when global customers first wanted four and five year agreements that flew in the face of the traditional three year contracts on cars and trucks. With vehicle quality up and the ecomomy down, buyers wanted to squeeze more from the deals. Global account managers had to work through major hurdles with Corporate Legal, their own management  and supplier relations to make the change.

When companies are too product or inward-focused as opposed to customer-focused, it may be in part not listening to their own strategic account managers, who must play on both sides of the fence. SAMs are the front line for gaining deep customer insight; but must also communicate inside their own shop, effectively negotiating for the right resources, support and alignment for their customers.

Sales and Marketing executives who must "place bets" on where to allocate resources sometimes ask, "Are we spending too much on customer/hospitality-related activities? What's the impact on earning loyalty?"

Entertainment's impact is hard to measure. It likely doesn’t win business on its own, or act as a key driver of customer loyalty, However, hospitality can have a role in starting and building relationships. Most customers care most about how products/solutions help their businesses, but buyers need to know who they are working with, too.

In B2B sales, various relationships must be built and maintained within buyer accounts, including between executives on both sides. This often best occurs in informal settings – over a drink after work, dinner, hospitality suite during conference, etc. --  as well as in office meetings and of course phone or video encounters.

With travel, entertainment and sponsorship budgets under siege in recent years, here’s evidence from Corporate Executive Board research about the danger of cutting back too much on hospitality measured in travel costs .  Another take from CEB on the continued impact of having face to face contact. Of course those are office meetings as well as off-site.

In summary, managing the budget so that account reps deliver solutions desired by strategic accounts is always the single most important issue. Hospitality plays a key role in building some of the relationships necessary to make that happen.

The recent death of Steve Jobs and publication of his biography sparked public attention to business innovation. Apple's track record brings to mind a more old-fashioned word -- invention. New-to-the-world, breakthrough products or "disruptive" ones in the sense of their changing whole business categories. Most product innovation activity is actually making upgrades or iterations to existing products or services rather than new ones. But the brand new, disruptive ones attract the most attention because their impact can be enormous ... and awfully good for business.

Launching disruptive products is not exactly new. History notes the major global impact of the printing press, telephone, automobile and airplane. Entire lifestyles have been changed by new products, not to mention launching major business industries world-wide. But in business today, the strategic importance of achieving breakthroughs and innovation of entire businesses has picked up steam. It was recently reported in an Innosight study of the S&P 500 Index  that up to 75% of listed companies probably won't be around in 2027. Where the average company in 1958 had been around 61 years, that average duration dropped to just 25 years old in 1980. The tenure today has dropped again dramatically to just 18 years.

So innovating and re-inventing the business has truly become an issue of survival. It's interesting that many companies and industries spawned by major inventions couldn't always follow that act up over time and eventually faltered. Kodak is one example. Its inventions helped people over the last few generations use affordable cameras and film and earned itself prominent listing on the S&P 500 for many years. But, with the advent of digital technology is struggling mightily today. In contrast the Innosight authors cite IBM, P&G, and J&J as three giants surviving the test of time and innovation turmoil by 1) operating effectively 2) creating products meeting market needs and 3) shedding their legacy businesses toward the end of their life cycles. Good survival strategy tips.

Many companies struggle when it comes to actually enhancing the customer experience. Even after customer initiatives are planned, time may pass and leaders wonder why customer scores aren't improving. Good intentions and plans are often not sustained, getting overtaken by the running of the business. I believe that teams planning action or customer-focused change would benefit from knowing they are being innovators and by adopting principles of lean innovation.

After all, taking customer-focused action is innovation. Adjusting a solution or service to fit what customers want is an upgrade, whether we call it "version 2.0" or not. People working on such projects become energized when they are recognized for creatively producing something new and important for the business.

The emerging practice called Lean Innovation offers a fitting tool for customer action planning because these principles begin and end with customer insights. For example, the first rule is knowing the customer's large "monetizable pain point", which of course would be a key driver of customer loyalty/retention -- which is what action teams typically work on today. Armed with customer relationship insights, teams start out a step ahead in the game of Lean Innovation.

However, the next Lean Innovation rule reveals where some action planning teams get off track. Customers can't tell you exactly how to fix the problem, just where the pain is. After you plan a change, customers will say whether the new approach helps or not. But action teams should be quickly creating the new concept/change to test on some customers, rather than spinning wheels seeking more data up front, hoping that customers will play the designer role. As the authors of the new book,Nail it Then Scale it say, "Entrepreneurs innovate, customers validate."

Action teams can become more entrepreneurial and effective by following principles of Lean Innovation. In the five stages posed in Nail it Then Scale it below which I adapted slightly to fit customer action planning, note how customers are kept engaged through the design process in the early stages:

1. Nail the pain -- fix on a key driver of customer loyalty needing improvement (based on feedback); craft a revised solution/service/process concept.

2. Nail the solution -- obtain customer reactions to the new concept, then to a simple prototype, then to quick iterations of same. Ensure your design reaches the point where the customers see real value, will pay more, etc.

3. Nail the go-to-market strategy -- learning exactly how the customer will effectively use and/or buy the new approach ; who's on the "committee" using it and deciding where the value is. Do real testing with real prices, if applicable.

4. Nail the business model -- use customer insights from above to work out predicted usage, revenue streams and costs; as needed probe customers on how they will use, what they will buy, etc. Keep initial applications limited until business side proves out.

5. Scale it --  once the business model is set and functional, the change can be rolled and grown.

Another term from design engineers that fits this approach to customer focused change is incremental innovation -- taking a worst-performing aspect of something key to customers and fixing it, then moving to other aspects. I hope more of those responding to customer priorities will see themselves as the innovators they truly are. 

You don't have to be an economist (which I'm not) to recognize that extreme boom and bust cycles harm the economy. A market bubble such as the housing mortgage debacle has at its core some unhealthy relationships between the economic partners involved. I think those poor business relationships reflect on a larger scale what can happen to market relationships in specific industries. Unfortunately, I believe another economic bubble may be on the way.

Business/channel partner relationships that are healthy produce a "win/win/win" -- across the supply chain for original sellers, partners and end-customers. Delivering and receiving value at each chain link should be the metric for healthy partnering. Inadequate value will break the chain. Without good enough incentives or training offered by the original seller, for example, partners can't perform as well for the seller or the end customer. Or if a channel partner fails to support customers post sale, then the lousy experience for customers pings back to hurt the reputation and share for partner and original seller alike. Nobody wins.

On a larger scale, I think the housing mortgage bubble had unhealthy partnership relationships, between banks and mortgage brokers, realtors, regulators and home buyers. Housing prices became inflated because borrowing too much was made too available to too many. Fingers are still being pointed for blame. Suffice it to say that in the end, all those groups and more -- arguably all of us affected by the bad economy -- suffered as a result.

While less documented, another economic bubble disaster may be brewing, related to college lending and borrowing. I agree with analysts who say that higher education prices are inflated because too many are borrowing too much, in terms of lacking ability to pay back and/or lacking quality jobs. The enablers? Here include the usual suspects -- banks/financial aid brokers and regulators. But include as well the colleges and trade schools encouraging over-borrowing, and students and their parents who borrow more than they can pay back, and those studying for careers that can't pay enough earnings to warrant the cost.

Parenting four, college-educated children gave me a birds-eye view of seeing some of these dynamics first hand. But the broader evidence has come from analysis such as here and here (scroll down to chart comparing housing and college inflation rates with the CPI).

Unholy partnering, or a lack of true value for throughout the chain, never ends well. And as we've seen, large bubbles make big messes. I hope some behavior changes and we don't see this next one burst as some fear.

In a recent blog, I implied that learning your customer contacts' challenges and needs can be as important as the homework you do on their company. But I think you can assume they will benefit from the success of your product -- its implementation, in doing what you said it would do, and especially in the ROI. Whenever they recommend or choose you as vendor on their project, then your success reflects on them. But it offers an opportunity as well -- to partner up in telling that success story to others in the customer company. Then they win by sharing knowledge with their colleagues, and you win because those are your prospects.

It often happens with large accounts that your buying customer is just one among several business units and groups in the corporation -- other product lines, BUs or Geos. Account managers responsible for penetrating the account further can be daunted by reaching out to start conversations with the right people in these groups.

I was struck observing the practices of highly successful Global Account Managers (GAMs) recently that a pattern emerged in how their business with that account accelerated, by:

1. Initially selling a small-to-mid-sized project -- "just got our nose under the tent," as one GAM related, for one area of the customer corporation.
2. Making sure the initial project was executed and paid off for the customer business -- top and/or bottom line
3. And here's the key point -- helping the customer contact assemble a case story about the successful project -- a brief but slick powerpoint with talking points and financial impact as the punchline; deliverable individually or jointly by the contact and the seller. The target audience: other parts of the customer business that would clearly benefit from a similar solution.

These GAMs were motivated to go the extra step of initiating the case story preparation in order to smooth their entry into other parts of the business; the buyer was motivated because telling the successful story accomplished career goals for leadership, knowledge sharing and of course networking elsewhere in their global company.

Top sales account or salespeople are often charged with selling to existing accounts and are told this is "low-hanging fruit" compared to adding new logos. But the low fruit reference may be a stretch -- if it was so easy, then it would show up in the numbers and shorter sales cycles. Developing real partnerships with the contacts you work with can be jump-started by co-promoting a success that you shared.

The old business saying, "Nobody was ever fired for hiring IBM," should have this corollary-- "People got promoted for hiring IBM." Vendor choice and experience helps launch (and destroy) careers. I knew a young manager who became a young executive in a Global 500 bio-medical company, not long after ushering in a successful enterprise implementation. He deserved the promotion, but wouldn't have gotten it without the vendor's splendid performance.

My friend probably made sure this vendor's plan fit their business well. Studies and personal experience show that customers want their vendors to know their business better. By doing homework and aligning their products with the business challenges and goals of customers, vendors improve chances to win and/or grow account and market share. But what about learning the goals and issues of individual contacts at key accounts as well? If they influence choice of vendor, and that decision reflects on them and their careers, then it would serve the vendor to know these individuals better as well as their business.

I suggest that knowing your customer contacts better can parallel the learning of their business. For example, when conducting due diligence on a key account, best practices would identify the challenges faced by the business, strategies undertaken, and most critical business performance measures, so your product can be adapted to fit into that customer reality.

But some answers needed about your contacts are similar -- their career goals and challenges, what they have accomplished to date, how they may be affected by the degree of success in the vendor/partner relationship. The outcomes will guide building in features and assurances that accomplish the personal needs of your contact along with the business objectives. This might include a preferred frequency or mode of communicating project progress, or preparing the ROI story a certain way for the executive audience.

Customer contacts will tell you they want effective solutions from vendors rather than to be wined and dined. But creating some social situations can pay off if that is where we learn about the client as an individual beyond what can be obtained through social media.

B2B vendors are selected for reasons that vary by buying sector and company. Vendor size wouldn't always be on a company's short list of decision criteria, but I believe the size of the vendor plays a larger role than some buyers would admit. Implied with the size preferences and other vendor choice criteria is the critical need for vendors to exhibit customer focused leadership.

From personal observation and limited research on the topic, it appears that when considering vendors to hire, companies use some common elements, but vendor size isn't always one of them. For example, at or near the top would be Right Product Capabilities -- knowing that the vendor's product/service fits the goals and needs of the buyer.
In the next tier would come (order will vary based on company and situation):

• Technical Skill (for support and design)
• Capacity/Scalability The buyer company is not only growing and changing, but may also try out a new vendor with a small piece of business before ramping up the purchase.
• Competitive Pricing - the sum of vendor costs help keep the buyers competitive in their own markets
• Reputation/Brand counts, but often more as table stakes in B2B --  such as assuring financial stability, that the vendor stands by its work, etc.

Vendor size may be closely related to some of these criteria, beginning with Capacity/Scalability. A small vendor won't always compete well with larger ones on breadth of product line, but may have a niche expertise to leverage in having the Right Product Capabilities.

Let me offer a few hypotheses regarding the impact of vendor size in the consideration and selection of vendors by many B2B companies.

1. There's a rule of thumb or "sweet spot range" on supplier size -- not too big or too small, (as measured by the percent of business the customer represents). If too small, say less than 1% of the supplier's business, and some believe you won't get enough attention. If too large, say over 10% of their business, then they may be over dependent on you and less able to withstand fluctuations in your volume (down or up). Here is one source supporting this notion and advising buyers to stay within the sweet spot range in picking vendors.

2. Bigger customers will look for big-enough vendors -- a minimal threshold to be of adequate size and/or brand/reputation to be considered. Part of the thinking has to do with Capacity/Scalability, but the other part is risk management for the company and the decision-maker. As the saying goes, "Nobody got fired for hiring IBM." Fewer are questioned in the corporate world for hiring a supplier of size and standing.

3. Bigger customers will lean toward smaller vendors as long as they are big enough (meeting other criteria). This is really a corollary of hypothesis #1. Large companies have been accustomed to being treated as major accounts with leverage in their supplier relationships. So they would rather represent closer to 10% than 1% of their vendor's business. This often means working with vendors that are not the largest in the sector.

For vendors, one implication is about marketing strategy -- realizing where the best match-ups might be in targeting customers, given your size. Also running through all the vendor choice criteria is the need to be customer focused. For example, as a market leader, vendors will have to remain nimble in order to compete with the smaller and ofter hungrier vendors in their space. They will also have to sell the buyer that they can "act small" in their customer focus and flexibility.

 "It's Time to Fire your Customers" -- Based on the number of comments, that HBR Blog headline sure caught readers' attention. However, the author makes a good case for parting ways with unprofitable customers who lack potential to grow or become profitable. My own comment suggested that this thinking could be around Three P's -- Payoff, Potential, and Partnership -- to assess how some customers are more valuable than others.

But then an intriguing ethical question ensued between commenters, posing challenges such as, "Aren't companies obligated toward even their 'low priority' customers"? "Isn't ... "(any) company that consciously jettisons customers... (treating) the customer as just a statistic?"

My response was simply, no. Business relationships should be win/wins; of mutual value to buyer and seller. Otherwise, the decision maker on either side has to make a call on whether to continue. Sellers have to be more tactful than buyers when disengaging, but they have the right to disengage, and perhaps the obligation to do so for the sake of the business owners.

A counter point was that businesses firing customers using the service/goods provided are treating them as less than "real people (or companies) with real needs." My answer: Sellers are people too, but who ever questions customers when they "fire" their restaurant, retailer or supplier, taking their business elsewhere? In fact, I think we call this, "shopping" and "choice."

Finally the questioner-of-ethics said he "would have difficulty accepting that it’s 'win-win' to summarily turn away a customer who's dependent on the company to meet his or her need." I agreed with him that a company turning away a customer isn't a win/win -- it's a lose-lose. It's a loss to the customer, especially one dependent on the company, but it's a loss for the company, too -- in fact the company had already lost money, which was the point of making the separation.

As always, there are exceptions to rules on letting customers move on. Utility services come to mind, which have grace periods and other policies that protect customers who can't pay in the short run.

But commercial enterprise should be evaluating the relative value of customers, and there's certainly no ethical argument about "targeted marketing", which tends to do just that. One could even say that companies make a profit one customer at a time...(or lose money or just break even.) there is definitely a time to consider firing a customer.

I wonder if you can't quickly check true customer focused leadership by simply looking for tangible evidence -- the initiatives, projects, metrics, etc., designed to deliver more value to customers. Without such initiatives underway, does a company deserve to call itself customer-focused?

These tangibles might be corporate but should be especially found within customer-facing processes or functions and strategic account teams. In each department it should be asked, "Where are the new projects and goals that will help earn customer commitment?"

I worked with a client some years ago that sold mission-critical equipment to businesses and was a global market leader at the time. They were very business development-oriented in their growth strategy. The feedback from buyers indicated a huge strategic opportunity for this company to enhance customer service, because salespeople didn't do much account management -- users were directed to call customer service with questions. Unfortunately, it wasn't always evident to the customer who to call or how to get their questions answered.

So this client made customer service a priority for improvement. And this was new thinking, because we found that despite having 100+ formal quality improvement projects underway company-wide, they had zero projects active within the customer service function, the number one customer-desired area to improve. This was shocking, but did lend urgency to making changes. They dramatically enhanced staffing and call software in customer service, made changes to the post-sale servicing approach, and have maintained their dominance in their global markets.

One lesson is in knowing the priority of your customers and doing something about it, but there's a bigger picture here. Customer listening should relate to the tangible initiatives underway in different departments and teams. As customer due diligence, the existence of those should be observed along with customer experiences.

The adage should probably be, "Without customer initiatives; we don't have customer focus."

I think the "stickiness" term for good advertising and communication applies to training and development, too. When signing up for a development course, business people all want the same things. They want the content to be interesting. They'd like the instructor to be entertaining. But business learners most of all want takeaways -- learning that "sticks", not only in memory but in their jobs. Participants may be impressed with a course or instructor, but only stickiness gives the desired return-on-learning.

Steep investments are being made in professional development such as sales technique, supervisory skills, professional certifications. Then consider variety of basic training -- on software, new products, computer skills, etc. The workforce is off the job quite a bit for the sake of learning, plus the direct costs. Managers should be demanding evidence of stickiness and return.

One framework lending itself to finding evidence of stickiness of learning comes from Donald Kirkpatrick who has long been a thought leader in professional training. Donald crafted his four levels of learning as follows:

1. Reaction of student - what they thought and felt about the training
2. Learning - the resulting increase in knowledge or capability
3. Behavior or transferred learning - extent of behavior and capability improvement and  implementation/application
4. Results - the effects on the business or environment resulting from the trainee's performance

What I like best is how only one level -- the lowest one -- relies on participant experience ratings. So to really measure learning, you must address the other three levels -- follow up to find evidence that participants remember the key teachings, are applying them to their jobs and making a difference in performance. Only then would we have sticky learning.

Some of us in the B2B customer strategy remember back many years to when professional "customer feedback" was for the most part, consumer marketing research -- product testing mainly, but also concept tests, advertising recall, product marketing (awareness/attitude/usage) studies.

You partnered on a project with your client contact, usually a market researcher or product manager (or both) who was seeking market insights to grow or improve his or her brand, or help roll out something new. The stakes were high -- narrowing to the right decision on how to invest in the brand. The work was hard and the study had to be done right. You didn't dare talk about these projects to anyone, even family to secure knowledge that competing brands wanted to know.

Our company's business model evolved to advise B2B vs. B2C customer strategy but the brands my colleagues and I worked with thirty or so years ago are still around. Some of those are in the image to the right. Until speaking to an industry group last week, I had forgotten what tremendous companies these were.

And the main reason why these company brands have stood the test of time? The voice of the customer was sought out scientifically to anchor major product decisions --  on likes/dislikes, what outcomes the buyers were looking for and experiencing. The companies to the right, and many fast-moving consumer goods companies in the 20th century were customer focused... before it was popular.

The rise in BI software and scorecards for business reviews makes senior managers more interested than ever in linking customer scores to operational ones. "Since we invest in tracking certain operational KPIs, let's make sure the metrics relate to what customers want," one customer process manager in a global enterprise told me. I couldn't agree more, and will simply share here four precepts for undertaking such alignment or linkage.

Do expect the right customer sentiment data to align with related operating measures. It may take exploring, mixing and matching to find alignment. Managers over customer functions should help identify internal metrics which possibly affect certain customer ratings. Analysis of data must often allow for lag time between the service experience and customer perception scores. The fact is that perceptions stem from customer experiences, which are in turn the outcomes of processes. Execution and measurement naturally precede the impact upon perceptions of customer audiences.

Do expect that some internal metrics will correlate more strongly than others with customer sentiment. The difference in correlation across measures is hopefully less about unveven quality of internal data but points instead to the experiences that customers care most about. When an internal measure is found to be a leading indicator it enables better tracking of improving operating areas in ways that please customers.

Don't expect every internal measure to correlate with customer sentiment. Certain items measure cost or risk managment more than customer value. An example would be the number of calls handled per hour in a call center -- an efficiency that customers may not see or care about, but which helps bottom-line performance. Metrics that help the business hit financial goals are keepers, whether they correlate with customer scores or not.

Do expect the alignment to indicate needing new or different internal metrics. What would you conclude when customers are unhappy about, say, deliveries being late, yet internal on-time delivery scores are very positive? To me, it implies re-checking how the internal metric is measured, since it obviously was not from the customer's point of view. What the customer cares about most can at times be very hard to measure internally, such as installed core product performing at the level the the customer expected. Ideally, you devlop ways over time to measure internally what matters most to your key customers.

I've been reminded lately that having strategic customer focus isn't about all your customer processes and touchpoints. Customer Experience or focus shouldn't mean executing every touchpoint throughout the lifecycle a certain way, but doing certain things so well that customers choose you.

In my household, we find ourselves choosing smaller, more nimble businesses to do business with, such as an electrician hired the other day over the company we normally use. He offered a shorter lead time and an appointment time rather than, "We'll be there between Noon and Five." I expected the other stuff to be done well enough -- like getting the fixture installed right -- but I hired him because he would come on a day's notice and meet at an appointed time, as that made life so much easier for us.

It's the same in B2B. Customers buy from those offering certain unique outcomes, while doing the other stuff well enough. The Corporate Executive Board (CEB) found in a recent study that companies aren't preferred because they perform all or most their customer touchpoints better. Instead, the winners, like my new electrician, were delivering certain unique benefits to the customers -- ones they couldn't easily find elsewhere that made customers' lives easier in some way. More specifically, they found that the preferred companies would:

• Choose a small number of "unclaimed" benefits to provide through their experience.
• Identify and overinvest in the one or two touchpoints where they can best showcase those unique benefits.
• Use other touchpoints to reinforce their unique benefits. 

Customer focused leadership means being strategic and even selective. It doesn't mean that every process must be perfect or changed to fit your brand -- just the ones that mean the most to your buyers.

The lifetimes of once-core products, lines or even categories have their limits. But with the global economy changing locally on so many levels, old products can get new lives. We see B2B examples of this but one popular consumer brand story -- the Sony Walkman cassette player -- makes the point.

I didn't realize the extent of the IPod's dominance until seeing this WSJ article describing the demise of Sony's Walkman cassette player (at least no longer manufactured in Japan). The Walkman was itself a classic category-killer. Small radios, a staple in American culture, went by the wayside for the individualized experience of Walkman and other cassette players in the 80's and 90's. But then the coming of CD players (including Walkman's CD player) and especially Apple's IPod and its competitors meant that the days of the cassette Walkman were numbered.

Except for small fact.... the Walkman cassette is not completely dying. The manufacturing has been sold to a Chinese-based operation. Sony says it will continue to sell the product overseas especially in Asia and Middle East where tape Walkman demand is not “totally zero,…” The point is that in today's global economy, when your product cycle wanes in the core markets, there may well be a second life in other markets developing on a different cycle.

In some cases, demand for an old product put on the shelf may actually roar back because of renewed demand from a developing economy. In the automobile industry, demand for manufacturing and parts technology has been renewed due to growth in China and India. For technology providers, this sometimes means dusting off the processes and equipment for older generation parts that are still high quality and meet the immediate needs of the OEMs trying to meet end user demands.

So it seems that more traditional products shouldn't be shelved just because they've lived out their cycle in your core markets. Product managers should make more thorough checks around the globe to find the emerging pockets of demand. Hang onto those specs and blueprints.

 

Beginning over a decade ago, the Trusted Advisor concept became a pinnacle for strategic sales and account managers to reach. David Maister's book increased awareness of the term. Trusted Advisor generally means earning your customers' trust and commitment -- seeing you as an ally, with the customer's interests at heart as opposed to strictly your own.

This takes a different angle than customer focus. One can be focused on a customer or prospect without their best interests at heart, much the way the predator snake focuses on its prey. Most people can eventually discern the intent behind the interest someone shows them.

One test for being trustworthy in strategic selling is taking enough time to listen and think about the customer's problem and implications before offering a solution. Unfortunately, the tendency instead is to offer "premature solutions,"according to Neil Rackham, author of the classic, Spin Selling. In this interview with thought leader Charles H. Green, Rackham says we are often too eager solving the customer's problems with our products, services and tools before investing more detailed listening and consideration that their issue warrants.

The 80s comedy, "What about Bob?" is a family favorite for us and depicts a scene that illustrates giving "premature solutions" and worse. Egocentric therapist Dr. Leo Marvin (Richard Dreyfuss) offers new patient Bob Wiley (Bill Murray) a solution for Bob's numerous neuroses, after only a few minutes into his observing and questioning of the patient. Standing at his bookshelf Dr. Marvin says that there's a groundbreaking new book that can help Bob.... that he has it here somewhere..... oh here it is! Dr. Marvin then pulls from an entire shelf-full of identical copies his own brand new book on the therapy he is recommending.

Bob Wiley overlooked Dr. Marvin's duplicity but it's just a movie and his character was quite neurotic. Strategic customers and prospects are more perceptive. It won't help building trust if we prematurely offer customers our favorite or core product as "just happening" to be the right solution for them.

To some it may sound like heresy, but I think you can advocate too strongly for your customer. Years ago at a certain business services company, the scuttlebutt regarding one of the most senior and otherwise respected SAMs (including at high levels) was, "Has Ralph (not real name) forgotten who he works for?" Perhaps that's the point where advocacy has crossed a line -- when colleagues indicate you are asking too much for your customer, or your company is simply not yet ready to give all you are seeking, or both. 

That's why I really like the term, "Balanced advocate" in describing successful strategic account managers. The "balanced" description cuts at least a couple of different ways. First, the SAM instigates good practices on both sides of the relationship -- with groups and individuals in his own company as well as with contacts and user groups within the customer account. Secondly, the SAM is balanced in the asking --  able to strongly advocate for the customer and acknowledge the situation and goals of the supplier company.

When the Strategic Account Management Association's annual Standards and Practices Survey recently asked SAMs and strategic account program managers for the traits and behaviors that most contribute to SAM success, the notion of balanced advocacy came out as one type of critical practice. But the three other essential practices implied the importance of working well on both sides of the customer relationship. 

Four SAM behaviors most contributing to success

1. Be the balanced advocate for the customer -- but don't forget who you work for! Align resources to achieve the customer's desired outcomes.

2. Build the team on your side and manage it effectively -- this ideally includes a mix of direct reports for core contacts and responsibilities but a host of supporting contributors from other functions and regions.

3. Guide your company to contribute according to the customer's most important priorities. The SAM knows the customer's business and how they make money from your products and solutions. the SAM knows their top challenges and plans and where your company fits in.

4. Build up trust with the customer -- build relationships, collaborative planning of solutions and initiatives, and prove out the value being delivered in order to seal the trust.

Managers or trainers of strategic account managers (SAMs) all look for certain traits needed by a prospective SAM because the job has unique challenges. SAMs must not only build business relationships within complex, global customer organizations, they must become influential in their own company to marshal cooperation and resources for their customer(s).

In helping the Strategic Account Management Association analyze results from their 2010 Standards and Practices Study, we were surprised that SAMs and managers focused on just four topics when writing in suggestions regarding traits that contribute most toward successful strategic account managers. 

1. Strategic thinker with a business mind-set -- Visionary. Have financial acumen. Able to learn the customer business model quickly, not only in terms how they make money, but also how the supplier solution(s) help them do so. Confident working with senior executives on both sides of the business relationship between the customer and supplier.

2.  Persistent with the drive to succeed and lead -- have the inner fortitude it takes to wade through obstacles and time required to build the business relationships. Many SAMs fight their biggest battles internally, such as when a local sales group won't adhere to a global approach desired by the customer. New SAMs are expected to stay in the job at least five or so years. 

3.  Communicator and relationship builder -- Great listener. SAMs must be willing to be up front and visible to their own colleagues as well as to decision makers in business units of the customer. Many customer relationships are salvaged because the SAM ramps up the visibility of his company solving problems with and for the customers.

4.  Honest and sincere -- Ethical. Trustworthy and reliable. SAMs are seasoned business people given enormous latitude by the employer as well as the customer, and wind up responsible for a critical amount of business as the relationship grows. By definition the SAM works fairly independently and have influence over extensive resources. They simply must be worthy of trust.

The vast majority of recommended traits for SAM success from the voice of actual practitioners fit into these four buckets. This implies making these four areas the foundation for recruiting and developing SAMs.