How to turn Strategic Accounts into a growth engine for your business

Google

By Peter Browne

How can you turn Strategic Account Managment into a growth engine for your business? Research has revealed that revenue from Strategic Accounts is growing at a rate nearly twice that of average accounts.

To find out how, we present a video interview with Bernard Quancard, President and CEO of the Strategic Account Managment Association (SAMA).  The organisation that 50 years ago created a new profession: the Strategic Account Manager.

In this new video you will get answers to questions such as:

• Customers can't all be strategic, so which ones should you consider?
• What are the key elements for operating an effective SAM program?
• What metrics should be used for managing a successful SAM program?

For help in developing and growing your SAM program contact us on +61 2 9450 1040 or at www.gordianbusiness.com.au.

Do you need to Persuade Faster?

Google

By Gary Peacock

During one session with a client, on a flip chart we summarized the pressures acting on their buyer:

1. More Results
2. Less Time
3. More Problems

This client’s buyer was under pressure to produce more results: higher sales and higher margins. The buyer was expected to deliver better results in less time; they wanted results faster. However, the buyer has less personal time to deliver more results because fewer buyers do more work. Finally, they are facing more problems: from outside their business, competitors and governments make their tasks harder and from inside their business, other departments are not cooperating or have different priorities.

Given these three pressures— more results, less time and more problems— our client must find ways to persuade faster. Presenting data in the traditional way would take too long. Without getting the buyer’s attention and action, our client would not get results and the buyer would not get results either. Many businesses face similar challenges. Do you need to persuade faster?

‘We must go fast, because the race is against time.’ Anna Held

Persuading With Data Faster

In some businesses, a critical part of persuasion is to give insights from data: tables and graphs. For many of us Excel, Word and PowerPoint are part of our business life. Anyone can produce a table or chart. Even my teenage daughter regularly produces tables and charts.

Yet, most people just accept what appears from Microsoft or from their data provider. Typically if it looks professional: that will do. However, in business presentations most tables and charts I see are unpersuasive. In many businesses, how to make data persuasive is a neglected competitive advantage.

‘Concentrating on the essentials. We will then be accomplishing the greatest possible results with the effort expended.’ Ted W. Engstrom

Once you see how fast you can persuade with data, you will understand why the companies who know keep it a secret. Also why the companies that know the secrets stand out from the competition?

Try this simple test: take 5 of your slides, show them to a colleague and ask:

1. What are the messages of the five slides
2. Rate the slides on a scale of -10 to +10, where -10 is boring, 0 is neutral and +10 is exciting. 

Then just listen.

•          How fast do they get the messages?
•          How often do they get a different message to the one you intended?
•          Which slides were rated as exciting?

If you want to see a more persuasive version of your data, send us your most boring data slide and we will send back a version that will help you persuade faster, send it to gary@gordianbusiness.com.au.

‘Footprints on the sands of time are not made by sitting down’.  Proverbs

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.

Solving Impossible Problems: What are you assuming?

by Gary Peacock

As we strive to solve our impossible business problems, most of us are held in chains.

 "Chains of habit are too light to be felt until they are too heavy to be broken."

- Warren Buffet

In business, the chains that stop us solving impossible problems are our assumptions. Most of us don't know what we are assuming.  Our assumptions bounce around inside our brain unchallenged. To solve our impossible problems we must examine our assumptions. However, we can’t do this unless they are in writing.

Assumptions affect Strategic Customers and Strategic Negotiations

The American actor, Henry Winkler once wisely said: “Assumptions are the termites of relationships”. Too often when we are called in to investigate losing a strategic customer we find the supplier has assumed the customer simply wants the same product but cheaper or faster. Or the supplier assumes their customer’s strategy is the same as it was 5 years ago. So, to protect your relationships with strategic customers, ask regularly, what are we assuming? 

As well as affecting strategic customers, assumptions affect strategic negotiations. More than 20 years ago, I remember a negotiator urging me to test my assumptions. He rewrote the word assume as Ass-U-Me to remind me that if I did not test my assumptions, I would assume and that would make an ass out of you and me. I never forgot that lesson that assuming is bad for both sides of a negotiation.

Practical Tips

"The way to keep yourself from making assumptions is to ask questions."

-Don Miguel Ruiz

 Ask: What are you assuming? Write a list as quickly as you can. Don’t hesitate. Simply writing a list is often enough to help you break the chains holding you from solving the problem. Often, as soon as you see the assumptions in writing you know the assumption is wrong and you see another solution to your impossible problem.

If you need to analyse the assumptions further, try this. Once you have a list, number the assumptions and then ask two more questions:

1. How uncertain is the assumption? (low or high)
2. How important is the assumption? (low or high)

You can then map your assumptions in a simple 2 by 2 diagram (See example below).  Investigate further, those assumptions that you are highly uncertain and important to your business.

  

“Your assumptions are your windows on the world. Scrub them off every once in a while, or the light won't come in.”

 - Isaac Asimov

Only 15% of companies manage their accounts strategically - how does your company measure up?

Google

by Peter Browne

“Where we are at now – that’s not for me to worry about. Where we are going – that’s what I care about. And our suppliers better care about that too if they want to be our suppliers”

- President, EMEA – Industrial Products Manufacturer

Based on a 2010 study of senior managers from manufacturers, retailers and distributors in Europe and North America, only 15% of organisations measure up when it comes to managing their key accounts in a truly strategic manner. Alarmingly, 65% of companies believe they are managing their key accounts strategically, so there is a whopping disconnect between what organisations think is strategic account management and global best-practice.

In addition, the study identified that organisations with an effective strategic account management program had continued to improve their approach. This means that not only were the competitors falling behind, the gap between them was increasing. They had differentiated themselves and successfully increased the barriers to entry against their competition.

Companies that fail to address their key accounts strategically typically find that:

• They are increasingly reliant on price as the primary negotiation lever
• They are incurring costs with accounts that deliver little or no value
• Margins are declining
• They are not growing

The same study identified a number of common shortcomings in strategic account management practices.

Sales led

Many organisations think that if they have some large accounts, a dedicated account management team and some form of account planning system, then they are strategically managing their accounts.  This is simply a better than average way to allocate and sell to large accounts.

To build a strategic relationship there must be broad and deep connections between all levels of the relationship. Senior level engagement is the most critical. The growth of your company is inextricably linked with your key accounts so senior managers must be intimately aware of and involved in strategies with key accounts.

Revenue focussed

The primary focus of most account management programs is short-term revenue growth and account retention. The account plan and objectives of the account manager all relate to revenue opportunities and what the organisation can win from the key account.

The primary objective of strategic account management is to build a strategic relationship with the key account, which will achieve sustainable long-term revenue growth, increase organisational differentiation and create significant barriers to entry and exit.

Failure to identify and create value

Sales teams too often focus on what they want from the account. Not enough time is focussed on understanding what the critical success factors are with a key account, and what “value” means from the account’s perspective.

Strategic Account Management requires the account team to ask a lot of questions across the key account, and make conscious observations of what they are seeing and hearing. This information needs to be distilled into insights that provide clarity on what real value is for the key account. Only then can a focussed and actionable account plan be developed and executed.

Summary

Whilst there a many more success factors for your strategic account management program, these are some of the most critical. The fact is that companies that have effective strategic account management programs achieve better growth and financial returns than companies that do not.

We have worked with many organisations to develop and implement strategic account programs, and identify ways to deliver more value to your largest accounts, so if you need help to make this shift please contact us at Gordian Business on +61 2 9450 1040 or www.gordianbusiness.com.au.