Fresh from Florida

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By Stephen Kozicki

Last week, Peter Browne from Gordian Business was presenting in Florida at the Strategic Account Management Association’s 50th Anniversary Conference. Peter was presenting a case study of a successful client who in a mature market grew profit ahead of their 5 year plans.

“SAM has had the biggest impact of any initiative
we have undertaken in the last five years.
The business is almost unrecognisable.”

Case study, The Managing Director

The Strategic Account management Association (SAMA) have published the case study in their latest ‘Velocity’ magazine released at the SAMA conference. Also at the SAMA conference was the global launch of the practical business-to-business book on Strategic Account Management by Peter Browne and Gary Peacock.

Image: Peter Browne (Gordian Business) & Todd Snelgrove (SKF Global)

“In this book Gary and Peter provide some very practical and fresh ways of how to identify, build and grow relationships with individual and corporate customers.  Critically important, for corporate customers, they explain why some relationships work and why some do not work.  But they don’t stop there; they also offer simple tools and thinking models for how you can enable your team to plan how you can work with your key customers from a strategic perspective.”

Lynette Nixon, Industry Fellow, Innovation and Design Thinking at University of Technology, Sydney

So, if you are considering starting a SAM program in your organisation or are already on the journey and need practical advice to maintain your momentum, then pick up a book. The book is available from www.matrixplustraining.com.au or your airport bookshop, or soon download a copy of the ebook from www.amazon.com. 

Does your business need SAM (Strategic Account Management)?

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By Gary Peacock

 

Only those who will risk going too far
can possibly find out how far one can go.

T.S. Eliot 

In business there is a constant tension between managing risk and capitalising on opportunities. SAM is a critical element for doing both.

From our experience the top 10 to 20 accounts of any B2B organisation typically represent 60-80% of revenue and profit. We have seen cases as high as 95%. The consequences of losing one of these customers are dramatic, and in today’s business environment it is almost impossible to replace these customers; your competitors will protect them at all cost.

Do you have a problem?

Depending on a few accounts for your revenue		Do you rely heavily on a few large customers for most of your revenue? Is the revenue generated by these large customers growing as a percentage of total revenue? Over time, industries consolidate and the big get bigger. If you are an industry where this is happening it is likely you have a problem.
Losing large accounts		Have you lost a large account and you don’t know why (sorry, price isn’t the reason)? Repeatedly, companies lose key accounts and rationalise the loss of a one-off, caused by actions of a desperate competitor. They are rarely one-offs. They are a signal the market is changing and more is to come. Do nothing at your peril.
Serious financial consequences of losing a large customer		Have you assessed the financial impact of losing one of your largest customers? Would it be manageable or would it be fatal? How easy is it in your industry to replace a lost large account with a new one? In most industries this is becoming harder; if not impossible. Big accounts are locked into long-term agreements and competitors will defend them at all costs.

Businesses also need SAM because customers have become more sophisticated in their buying strategies. Successful sales and management teams need to become more sophisticated in their key account management strategies. Rethinking and adapting approaches for each customer is imperative. As industries and customers evolve, so too does the way they make buying decisions and manage supplier relationships.

Is your market changing?

Different competitors		Are you seeing new or different competitors emerge? Many industries are experiencing new niche competitors nibbling away at their revenue, or online channels creating low-priced and convenient alternatives. Are generic products a growing threat? Can you justify the premium customers must pay for your branded product – and for how much longer?
Different buying processes Different relationships		Is the way your key accounts buy changing? Are procurement and the senior executive team becoming more involved? As organisations apply greater governance and executive oversight, decisions are being made higher up. This is clear trend. Is your account team equipped to deal with these changes in the buying process?

If you identify with a problem or market change above then you would benefit greatly from a SAM program in your organisation. If you are looking to start a SAM program or are already on the journey and need additional practical advice to maintain your momentum, this is the book for you: Managing B2B customers you can’t afford to lose.

If you are thinking about starting a SAM program at your organisation then check out http://www.gordianbusiness.com.au/strategic-account-management or call +61 2 9450 1040 or email gary@gordianbusiness.com.au. We would love to hear your comments below and subscribe to our blog at the top right of the page.

How to deal with fast-paced negotiations.

Fast-paced negotiations need agility not speed.

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By Stephen Kozicki

There is more to life than simply increasing its speed.

Mahatma Gandhi

I have just returned from projects in Malaysia and Singapore. The region is fast paced, chaotic, and full of opportunities and pitfalls. When dealing with these opportunities and pitfalls I am surprised with how agile successful people and companies are.

Obviously in KL, the news topic was still the missing flight MH 370. There was much discussion around the slow response to the missing plane. Also around the multiple airline officials and government minister’s hasty responses.

Hasty responses often occur in critical negotiations. As the pace of the negotiation increases, there is an increasing danger of a hasty response instead of an agile response.

Successful management teams must become more sophisticated in their negotiations with key accounts. Management teams need to rethink and adapt their approaches for each major customer. Critical negotiations are a great place to learn agility over speed. Agility creates value and hasty responses descend very quickly into price discussions. 

The most powerful method we use to avoid hasty responses in live negotiations is preparing questions. Questions give you control over a fast-paced encounter and they allow you to manage the emotional responses to different approaches. The major benefit of questions is they prevent you making quick statements to defend your position. They also make you prepare better for negotiations with key accounts, you learn to look for real interests and not become blindsided by positions that people take.

Some of the best persuaders – salesmen, negotiators and psychiatrists – persuade with questions rather than statements. The power of questions to generate actions and commitment is well displayed in John Whitmore’s book Coaching for Performance. The only question to avoid is Why? During a negotiation this will produce only a defensive response because the other person sees it as a ‘blame’ question. Few people will answer this question truthfully and it often damages the rapport of a negotiation. Other ways to ask the why question are: what are your reasons for that? or how did you decide to do that? Some well know research in negotiation conducted many years ago showed skilled negotiators used questions twice as often as average negotiators.

To be agile in fast-paced negotiations, prepare good questions and you will avoid hasty responses that will lower your prices.

For unbiased, practical advice when planning for your next negotiation, contact us on +61 (02) 9450 1040 or Stephen@gordianbusiness.com.au. Please share any comments you have and subscribe to our blog at the top right of the page.

Competition – A threat or an opportunity?

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By Stephen Kozicki

A certain amount of opposition is a great help to a person.

Kites rise against, not with the wind.

Lewis Mumford

I have just returned from doing 2 projects in Singapore and Malaysia and had the great pleasure of doing field work in both places, meeting senior managers from my client’s strategic accounts.

One of the key messages from each of those senior executives was that their business reality is changing and changing fast, that they are dealing with unprecedented competition in their markets.

One of the industries that I visited was healthcare. Senior executives in that field are facing ever increasing pressure to reduce costs. They often look at suppliers to cut margins to help them meet their hospital’s financial targets.

They’re clear that most suppliers to hospitals in most categories are now selling products that are merely evolving. No more breakthrough products, compared with a decade ago, when product innovation was revolutionary.

Your role as a senior manager in the way you bring value to your top accounts is more important today than ever before. Most industries, like the medical devices segment, are under constant pressure to reduce prices. Too many jump to price reductions and don’t look at a broader value approach.

Competition is a fact of life.

Your competitors constantly threaten your strategic accounts, so you cannot be complacent. You should analyse your key competitors identified in your account plan, and decide how you will respond (not react) to competitor activities that affect your accounts.

Capture intelligence about any key relationships that exist with representatives from your competitors. There are many industries where people tend to move around the major organisations and so have a wide range of relationships across the industry. It is critical to understand these relationships, especially those with your competitors.

You must know what level of influence they have over the buying behaviors of your account contacts.

Do two things; firstly document the products and services supplied to your strategic account by competitors. Secondly, and the harder but more critical, is understand deeply the value that your competitors bring to your major accounts.

Ask yourselves:

• Why does the competitor have some business with the account – really what is ours and their share of wallet?
• How does it fit with the strategy of the strategic account?
• Does the competitor have any competitive advantage that you need to respond to?
• Can they provide unique value beyond the products and services they provide?
• Can this value enable them to build a stronger relationship with the account and threaten your level of business or plans with the account?

Monitoring changes on a regular basis, keeps you on top of potential threats to your accounts. It can also signal a more widespread strategy from competitors that you can prepare for with your other strategic accounts.

Other organisations with whom your account deals are often overlooked in account planning. They may not be competitors or directly affect your organisation, however they can have a significant influence on how you manage your accounts. If you build good relationships with key influencers they can provide invaluable intelligence. Often they have different relationships within the account that can provide new insights. From their different relationships, they may be aware of unstated or emerging issues or opportunities.

A solid account plan, with regular reviews and all relationships monitored provides the potential to turn threats into opportunities. If your strategic account relationships or account planning processes aren’t secure and embedded, are you really prepared for the competition?

For more insights look at: http://www.gordianbusiness.com.au/strategic-account-management/ or contact us on +61 2 9450 1040 or email stephen@gordianbusiness.com.au. Please share your comments below and subscribe at the top right of the page.

Sceptical about buying on value? Check out the facts …

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By Gary Peacock

Extraordinary claims require extraordinary evidence.

Carl Sagan

Did you know the unit price of a product or service may only account for about 10% of the total costs. To reduce the remaining 90% you need to look at the total costs for your business. Todd Snelgrove from SKF Global is a world leader in value and total cost of ownership (TCO). We asked Todd, what makes value a better alternative? What easy steps you could take towards buying on value?

http://youtu.be/j_3usMkO6CQ

From this video you can see that scepticism is a valid reaction. However, if you can be open minded to the facts and the costs for your business and how to reduce these, buying on value is more profitable.

If you’re looking to drive savings to your bottom line and change your relationship with your suppliers look at our workshop http://www.gordianbusiness.com.au/strategic-account-management/ or contact us on +61 (2) 9450 1040 or email gary@gordianbusiness.com.au.

We would love to hear your views so please comment below and subscribe at the top right of the page.