Beware of Wolves in Sheep’s Clothing

Google

By Gary Peacock

Are you interested in improving your Strategic Account Management?

Yes, you are interested in Strategic Account Management. So, then you start to browse the internet and look at websites and potential companies to work with. Companies to improve your current processes or to implement a new process. Beware of companies who I would describe as wolves in sheep’s clothing.

"Well, wolves will pretty rarely hunt. You're vulnerable if you're on your own or injured."

Bear Grylls

 So, what does a wolf in sheep’s clothing look like? Well these are companies whose products and services are just to sell products and services.  In short, they are sales training companies who have changed the titles of their workshops and consulting, from sales to Strategic Account Management. Simply renaming their services to take advantage of an opportunity in the marketplace.

If someone from one of these companies was beside me as I write this blog, they would argue with me. Typically, they would say “Gary, the skills of selling are useful in Strategic Account Management.  That’s why we can offer services to help our customers with Strategic Account Management.”

There is a nugget of truth in this argument. Part of Strategic Account Management is selling your ideas to your strategic accounts and selling your ideas to your organisation to get resources for your strategic account. So, some selling techniques are useful, for example asking good questions and building credibility with the person you are trying to sell an idea to.

However their approach is simply using selling techniques under a new name. This flaw is serious but not fatal. However, there is one fatal flaw to buying from a wolf in sheep’s clothing. When you examine their approach carefully, you will see they frequently set sales targets for products.  Also, they frequently talk about products and pitching products. So, their approach is simply high level sales training to sell more products. In short, “this is how you get access to the CEO level to sell more products or a bigger bundle of products”. This is not Strategic Account Management. This will not create more strategic relationships. Typically, a competitor will come in with a bigger discount or bigger rebate at the end of the contract period. So, you can lock in a strategic customer for a while. But competitors can and will be able to wrestle the customer from you.

So, if this is not Strategic Account Management, what is? Well the answer is surprisingly simple. Strategic Account Management is a process not designed to sell more products but to improve the business results of your strategic customers. Just so we are clear, it is not about more sales of your products and it is about more results for your customer.

The most successful Strategic Account Programs are built on this foundation. To build a deep strategic relationship, you need to invest in improving your strategic customer’s results. If you do this for 12 to 18 months and do not gain an obvious benefit from the work you do, it transforms the relationship. Working on improving their business results creates a deep strategic relationship that competitors cannot easily break with bigger discounts or bigger rebates.  This transforms the relationship because the customers view changes:

• From “ I think this is just a new technique to sell me more products”
• To “I think this supplier is serious about helping me improve my business results in ways that are not just going to increase their sales. I wonder if they can help me with…”

Perhaps this can be summed up best by quoting part of a conversation between a customer and a strategic supplier at a dinner attended by executives from the two companies.

“We see you as a partner not just a preferred supplier.”

“What’s the difference?”

“With preferred suppliers we meet with them long enough to get the biggest discounts. With a partner like you, our executives share our business problems and opportunities with your executives. Then we listen to your market knowledge and work with you on your ideas for new businesses to create more revenue and profit for us.”   

If you want to be like this company and transform your relationships into strategic relationships, beware wolves in sheep’s clothing. To find out more about Strategic Account Management click this link: http://www.gordianbusiness.com.au/strategic-account-management/

"That strong mother doesn't tell her cub, Son, stay weak so the wolves can get you.
She says, Toughen up, this is reality we are living in."

Lauryn Hill

We would love to hear your views so please add your comments below and subscribe to our blog at the top right of the page. Or contact us to discuss how we can help on +61 (02) 9450 1140 or email gary@gordianbusiness.com.au

Are your Account Plans strategic? – take our 5 question test

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By Peter Browne

Are your account plans as strategic as you think?

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”

 Sun Tzu

Senior executives must juggle many balls. They must strike the right balance between focusing on long-term and short-term objectives. Fail on the short-term and you are out of a job; fail on the long-term and you might not have a business. Because key accounts drive both short and long-term revenue and profit, one litmus test of how well senior executives are directing the business to achieve the right balance is to see what is included in strategic account plans.

Including the word “strategic” implies a longer timeframe and matters of significance. To test if you are working at the strategic level with your key accounts take this quick 5 question test:

1. Does your account plan include actions to increase your understanding of your account’s strategic priorities?
2. Does your account plan include initiatives that go beyond this financial year?
3. Does your account plan include actions that will broaden and deepen relationships with your account?
4. Does your account plan include initiatives that are beyond your products and services?
5. Does your account plan identify your account’s strategic problems, and initiatives to help solve them?

If you are serious about creating strategic relationships with your key accounts; increasing barriers to entry against competitors; and barriers to exit for your key accounts, you should score 5 out of 5 for these questions. If you did not score 5 out of 5, then you need to identify the problem. Are you too focused on the short-term? Does the account team still require development to think and act strategically?

In our experience most “strategic” account plans are operational and short-term. Businesses too often focus on winning sales at the expense of building truly strategic relationships. Account teams find it hard to manage the internal pressure for short-term results.

So make sure the accounts plans for strategic accounts include short and long-term activities; and activities that create value for both you and your strategic account.

We would love to hear your views so please add your comments below and subscribe to our blog at the top right of the page.

If you are struggling to make the shift from traditional account management to strategic account management please contact us to discuss how we can help on +61 (02) 9450 1140 or email peter@gordianbusiness.com.au

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 well are you managing your Strategic Customers?

Google

By Gary Peacock

In many of today’s markets growth is becoming slower. In slow growth markets competitors need to steal a market share from you. The first place they will look is your Strategic Customers. How well are you managing your Strategic Customers?

A quick test is during your 90 day account reviews: to ask two questions?

1. How many actions in the account plan are going to make a difference to the customers’ results and your results beyond this financial year?
2. How many actions are about more than your products and services?

The first question will show you if you are only being tactical—focusing on delivering sales this year. Or if you are also being strategic— building the relationship by doing some things that will cost you this financial year but produce a better sales result for you and your customer in the next financial year.

Some activities that support this year's sales is fine. However, too often and too soon, the tyranny of today drags Account Managers from investing time in activities that will pay off next year.  Not investing this time will soon condemn your relationship to being transactional.

The second question shows whether your Account Managers are simply salespeople with a fancy title. If the actions in the account plan do not include actions that are about more than products and services then you are only being tactical—focusing on delivering sales this year.

The best Strategic Account Managers bring ideas and insights to help their Strategic Customers improve their results without any immediate return in increased product sales.  Why? Simply because this is the biggest investment in the strategic relationship you can make. If your Strategic Customer sees you doing this and sees there is no obvious return for you, then they know you are serious about building the relationship.

Some simple examples:     

• Getting your HR manager to share with their management team ideas for improving their employee satisfaction
• Letting your Insurance manager share his experience of making a claim for a flooded factory
• Getting your IT manager to share her experience installing SAP so the customer can learn from your experience

None of these will sell you more products and services; all of these will build your relationship which will sell more products and services.

Too often, Strategic Account Programs drift towards becoming product sales programs and away from building the strategic relationships.  Building strategic relationships will build more sales beyond this financial year and will build barriers to keep your competitors out.

So, during your 90 day account reviews ask these two killer questions.

1. How many actions in the account plan are going to make a difference to the customers’ results and your results beyond this financial year?
2. How many actions are about more than your products and services?

If you need help to focus your Account Managers on their strategic relationships then call us on +61 2 9450 1040. We welcome any comments you want to share. To receive our blogs directly to your email then subscribe to the Gordian blog at the top right of this page. Simply add your email address to the box, click the button and you will receive all future Gordian blogs direct.

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

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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