One of our enduring insights remains: there is no numbers-driven approach to implementing strategic account management. At the same time, this book outlines the strategic account management challenges that our clients most often face. Our goal is to help you save time and money as you implement or improve your strategic account management program.
S4 Consulting uniquely focuses on obtaining the internal firm-wide commitment and support that is so critical to the success of strategic account management. Other readers who can benefit from this book are the very best of those who manage strategic account relationships—a complex, challenging, and often very rewarding task. The Introduction defines strategic account management and contains a high-level look at its specific rewards and challenges.
Getting Everyone Headed in Roughly the Same Direction
Define strategic account management as a business rather than a sales initiative. If a firm tries to implement strate-
Start with the right number of the right strategic accounts. Firms are sometimes tempted to start big—by simply
Tactical Issues in Strategic Account Management
Create human resources support for strategic account managers. Questions firms need to answer while developing a
Create firmwide relationships at multiple levels of re- lationships between the firm and its most critical accounts
The technology-driven company occasionally invests without determining its overall needs in the "latest and greatest." The technology-enabled business determines what it needs and then finds the best tools to support its strategic goals.
Conclusion
A Common Vision and Set of Values
This image not only keeps the bottom line in mind, but also helps employees set their priorities and make good decisions in uncertain times. This picture/vision is often most effectively created by a multi-level cross-functional leadership team using objective market and customer data. Since the group will be articulating the vision in words, it is important that they wrestle with a shared understanding of what the words mean.
It requires skillful dialogue between people and departments that will lead to the understanding and commitment that organizational alignment requires.
Systematic and Ongoing Communication of That Vision and Values
Structural Changes
Because strategic account management is very different. way to work with customers, however, these programs often fail due to a lack of support. WHAT ARE THE BENEFITS OF ALIGNMENT. strategic account management is about working smarter, not harder. When the firm is committed to the strategy, it will take significantly less time and fewer resources to get things done.
We—and our firms—tend to worry more about how things directly affect us, how we can be known, and how we can avoid disappointment and confusion. It's the most challenging type of selling—one that asks people to do their jobs differently and reframe their definitions of "accounting" and. Strategic account management was essentially put on hold, client relationships weakened as account executives became increasingly difficult to reach, and the firm's commitment to the program waned.
How Account Aligned Is Your Firm?
My company's account managers have identified the strategic account contacts with whom they are not compatible and have assigned another team member to manage those relationships. My company's strategic account listening and feedback systems are sophisticated enough to adequately alert us when an account contact is about to change. My company recognizes how disruptive it is to change a strategic account contact, so we have developed recovery strategies to minimize the negative impact on the relationship when such a change occurs.
We measure our performance at strategic accounts against standards that have defined account contacts. My company's internal systems and processes are all focused on exceeding strategic account expectations rather than the ease and efficiency of internal processing. During our recent sizing (growth or downsizing) we carefully examined any negative strategic account impact before removing/adding people or changing any process.
Because our size has changed, we've established strategic account delivery standards that tell us when processes are starting to become overloaded, unresponsive, or underutilized. Our market listening and feedback system is sophisticated enough to identify and exploit any technological breakthrough in our industry.
Review Your Strategies
Drive the Voice of the Customer Deep Into the Organization
Clearly, this nails one problem that is almost always at the heart of troubled relationships—the perception that you don't care. The supplier will then ideally improve the areas where it is not performing up to expectations—the process redesign mentioned earlier. This decision, as one Knauf executive said, "was the single best one we made in the entire project - and it was a very successful project." The management committee included decision makers from finance, marketing, manufacturing, logistics and sales.
What can you do to ensure your firm is aligned for strategic account management? A firm that considers itself burned out may rightly resist continued strategic account management. At one high-tech firm, the sales people "threw in" the maintenance contract for free to get the sale.
In Frederick Reichheld's The Loyalty Effect, Dave Illingworth, executive vice president of Lexus North America, makes this point very effectively: "The more you focus on the bottom line, the harder it is to hit."4Illingworth presents Toyota's approach to market, which focuses on the elements that drives customer loyalty. Start strategic account management with a pilot, focusing on two or three of your most critical accounts. Throughout this book, we talk about various support structures required by strategic account management.
The account managers read books and studied strategic account management models, but it was difficult for them to apply these models. When she finished, the chief customer officer said, "There are four people in this room who really know our business, and three of them are from Motorola." The meeting resulted in a $500,000 order. Some firms simply do not understand - as Motorola did - the need to concentrate strategic account management on a small number of accounts.
In 1995, one of our consultants asked several panel members how many clients a strategic account manager could effectively manage. It depends on the expectation of the strategic account contacts and the maturity of the relationship. Will employees outside of sales take responsibility for tasks assigned to them by the strategic account manager.
Team-based compensation is one of the most problematic areas in strategic account management, worthy of several books. How can you ensure your firm has created human resources support for strategic account managers? While it is important to develop such relationships, the strategic account manager (SAM) must develop firm-wide relationships—continuous parallel links between functional areas of the supplier and account.
Just as the SAM previously "knew" that the VP of procurement could not be the financial decision maker, so many strategic account managers take their gut feeling as gospel. Managers usually answer this question by looking at the strategic account manager's salaries and supporting people with how much time they spend on the account. We consider a C-class as a supplier positioned on the edge of the strategic account loss cycle and waiting for a push.
Companies that do quantify the value they receive from and deliver to customers tend to be more successful in their strategic account management. Companies that do quantify the value they receive from and deliver to customers tend to be more successful in their strategic accounting. Should we invest in technology?” The choice can be dangerous because the cost of some customer relationship management (CRM) and sales force automation systems easily runs into the millions of dollars, and may require millions more if problems arise (as they often do) in the system's implementation.
Step One: Identify the critical strategic needs for account management efficiency in the context of the sales and account management processes. Step Three: Filter – Which of the identified strategic account management performance needs identified in Step One could best be met by technology. Step Four: Assess the technology readiness of both strategic account managers and anyone else who will be using the system.
Step One: Identify critical strategic account management performance needs within the context of the sales and account management processes. Step four: Assess the technology readiness of both strategic account managers and everyone who will use the system. Provides NAMs with strategic information. The system allows NAMs to collect information from all NAEs serving national accounts shipping locations.
Define strategic account management as a business rather than a sales initiative. Unless everyone in the firm owns
Create human resources support for strategic account management. Strategic accounts are probably your firm’s
This may sound like a business-to-customer approach, but it is at the heart of most business-to-business approaches. interactions are two people talking. Aligning a company with strategic accounts begins with the company aligning itself after systematically learning from previous accounts. In coordinated companies, customer service is not a department. The company then shares those expectations with all employees and asks them what the company needs to do to consistently meet and exceed those customers' expectations.
As with most challenges in life, it is much easier to express your determination than to actually develop and focus it for the long term. As with most challenges in life, it is much easier to express your determination than to actually develop and focus it for the long term. advantages are increasingly difficult to achieve. aligning a business around its strategic accounts offers just such an advantage. At a time when sustainable competitive advantages are increasingly difficult to come by, aligning a company around its strategic accounts offers just such an advantage.
Strategic account management can create greater customer loyalty, which in turn can lead to greater customer profitability. One of the largest telecommunications companies in the world has clearly seen the benefits of building relationships with its strategic accounts. The company has found that customers who purchase even one additional service have a “dramatically higher” than average retention rate.”2 How can strategic account management lead to increased loyalty and profitability.
A strategic account manager, who acts as the single point of ownership and is given the right level of power to make decisions, can help resolve these issues as they arise. If the SAM has the firm behind her, she will almost certainly orchestrate relationships between her firm and the strategic account. We've already seen what can happen when there are few interrelationships: one transfer, one new buyer influence, one promotion, and the entire dynamic of the relationship can change - if not disappear.
To increase loyalty and long-term customer value, the strategic account manager must constantly ask himself how he can deepen and broaden the relationship with the account.
