Are your Account Managers scared of your customer’s CEO?

Google

By Peter Browne

One of the biggest weaknesses of Account Managers is their lack of skills and confidence to build and sustain business relationships with senior executives at their major accounts.

We fear things in proportion to our ignorance of them.

Christian Nestell Bovee

Don’t just take it from us. A 2013 survey by Executive Conversation revealed that the highest priorities for training of salespeople were:

1. Training on financial acumen and ROI
2. Training on selling to customer executives

When you start to manage your major accounts more strategically, this issue often emerges. To manage their major accounts more strategically, Account Managers need to develop new relationships. These new relationships include C-Level leaders such as the CEO, CIO, CFO and even Board Members.

However Account Managers are used to dealing at the operational and mid-management level. So for many Account Managers, building relationships with executives is unfamiliar territory. So they lack the confidence and knowledge to initiate and develop C-Level relationships.

Typically, once Account Managers are in roles where they must meet with a senior executive they have three questions:

1. How do I get a meeting?
2. What questions should I ask?
3. How will I know if the meeting was successful?

 To be effective, Account Managers need to overcome their anxiety. They believe there are some special skills that they need that they don’t have. However in our experience, if they are used to dealing with management, they have the required relationship building and question asking skills; they need to change their perspectives: 

From	To
Your company’s products & services	Your strategic accounts business issues
Only creating value for your company	Also creating value for your strategic account
Operations	Strategy

However changing perspectives isn’t easy. Most Account Managers have spent their career focusing on short-term revenue and results. So changing their focus to understanding the senior executive’s key business issues, creating value for the strategic account and discussing strategy for future financial years requires some investment. They need help to transform their thinking. That is why sales training in this area has become the No.1 priority for many companies.

For companies who want to develop and sustain strategic account relationships, establishing and sustaining relationships with your customer’s senior executives is a critical capability.

So if this is an area your Account Managers struggle with we hope this blog gives you some ideas. Of course if you need more ideas or help look at our workshop; http://www.gordianbusiness.com.au/executive-interviews-workshop or contact us to discuss ways to improve the skills and confidence of your team to more effectively manage senior executive relationships. Contact us on +61 (02) 9450 1040 or email peter@gordianbusiness.com.au. We welcome your contribution so please comment below and subscribe to our blog at the top right of the page.

Is your sales development investment targeting the right problem?

Google

By Peter Browne

Are you serious about creating an account team that can think and act strategically? Or are you doing the same things as your competitors each year, and making no meaningful progress?

Based on a recent survey by Executive Conversation it seems the latter is the case for most companies.

The June 2103 survey found “understanding customers’ business needs” was the most important issue for companies. It also found that training on financial acumen and selling to customer executives were also of high importance.

Yet when you look where companies are investing their development dollar, there is little reason to be confident much progress will be made in any of these areas.

Currently almost 90% of companies include training on products and services in their sales development programs. And despite the fact that respondents rated their team’s product and service knowledge as excellent or above average, they plan to continue to dedicate the highest percentage of their sales development investment to more product training.

This illogical situation does not surprise us.

In our work across many companies and industries time and time again we see the same problems. The account team are so focused on selling products and hitting their targets that they spend no time trying to understand the customer’s business needs; they have poor financial acumen so lack confidence when conversing with senior executives. So, it is blatantly obvious why account managers struggle to sell to customers executives.

Today’s fast paced and resource constrained business environment has changed the game for account managers. Senior executives expect key suppliers to understand their business and they expect you to do your own homework. So when you are given the chance to meet with or present to them, they expect you to understand their business, your business and engage in language they understand – financial language. If you fail on any of these points good luck getting in to meet with them again.

Companies that are serious about changing the way they work with their key customers, and build more strategic relationships must get off the “product training drug”. They must equip their account team with the skills and processes to understand their accounts more deeply, and understand and convey value in business language.

So if you want to stop banging your head against the wall, do something different this year with your team to change the way you work with your key accounts. Based on the evidence you will be one of the few.

For help in changing the way you work with your key accounts call us on +61 2 9450 1040. Please share any thoughts you have on this below and subscribe to our blog using the RSS feed at the top right of the page.

How to avoid price discounting: the 2 keys to success.

Google

By Peter Browne.

Is your company facing increasing pressure to compete on price? Are your competitors cutting prices to secure volume, and are you being forced to respond? Are revenues and profits in steady decline? Do you feel helpless to stem the flow?

The long-term implications of price discounting are catastrophic; it creates a discounting mindset, it hurts your brand and credibility and reduces your capacity to reinvest and stay competitive.

There is no silver bullet; however there are two proven strategies you can employ to better manage a competitive pricing environment.

1. Manage your accounts strategically

Managing accounts strategically enables you to create a relationship where your full value is understood and regularly demonstrated. Customers understand where increased cost comes from, and the value it delivers. They see value beyond your products and services, because they value the relationship they have with your company. Relationships between executives, operational and technical teams create a strong connection that rises above product and price. Customers understand the value you have created for them in the past, and trust that you will deliver more value in the future.

If you have not created a strategic relationship with your major accounts you are not in a position to negotiate. Your account will not understand the value you offer. If you have not helped them understand your value prior to the negotiation process they will fall back on price.

2. Have a strong negotiation plan

Before entering into a negotiation, you should know you are the account’s preferred choice. You should be able to articulate the additional value your company has created for them so far, and understand what is important to your customer. Both the explicit things they state also the “below the waterline” considerations that you have uncovered.  Your demonstrated value and deep understanding of their business puts you in a strong negotiating position and a long way ahead of your competitors.

If you aren’t managing your accounts strategically and demonstrating your value, you are not in a position to negotiate. And there is no point having a great negotiating plan, when you have no value to leverage. One out of two won’t do; you need both.

We welcome your comments; or for help building your value with your clients, contact us on +61 2 9450 1040 or at mail@gordianbusiness.com.au

Don’t just retain your key accounts – Grow your revenue and profit as well!

Google

By Peter Browne

One critical aspect of managing accounts more strategically is to retain them by increasing barriers to entry against competitors. However, what companies’ often overlook and misunderstand is the potential to grow revenue and profit.

Typically when companies begin a Strategic Account Management program, their objective is retaining their most important accounts. This includes defending share against aggressive competitors, reducing margin erosion, and creating a compelling value proposition that differentiates them from the market. However managing accounts more strategically also helps grow share of wallet and grow margins.

This is supported by the Strategic Account Management Association's (SAMA) 2012 Report on Current Trends & Practices in Strategic Account Management.  SAMA surveyed 700+ global respondents across 30 industries. In the report, SAMA  noted that “the average revenue growth in the strategic accounts surveyed in 2011 was 14%, up 2% from 2009”. Even with low growth in the economy, these accounts are beating the economic trend. SAMA reported improved profitability – showing growing revenue was not caused by discounting prices. If improved profitability was not enough, customer satisfaction scores also increased.

These findings make sense. Companies who manage accounts strategically understand their customers more deeply. So, they can identify problems that need solving for their accounts. Then they can solve the problems with their products and services, or find other ways to help their account solve the problem. Solving problems creates new revenue opportunities that would otherwise not have been obvious. Opportunities identified in this way are also unlikely to be offered to the market. So typically companies achieve better than average margins.

Also, companies that segment their customers using best practice segmentation tools can identify the small accounts most likely to grow. Small but fast-growing accounts get less focus from competitors, so you benefit from revenue growth and good profitability. In addition, you can position your organisation as a critical business partner. As a partner, you can provide fast-growing companies external expertise and insights to manage the challenges they encounter during their growth.  

So when you consider a Strategic Account Management program, don’t just view the initiative as a way to defend key accounts. Also consider the potential to grow revenue and grow profit from the accounts that are most critical to the future of your company.

We have work with many companies in many industries and many geographies to help retain key accounts and grow revenue and profit. If you would like to discuss how we can help, please contact us on +61 2 9450 1040 or www.gordianbusiness.com.au.