MANAGING STRATEGIC ACCOUNTS

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1 BLOG BOOK MANAGING STRATEGIC ACCOUNTS blog.walkerinfo.com/blog/managing-strategic-accounts

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3 Blog Book Managing Strategic Accounts How being a happy loser makes you a winner Jennifer Batley Nobody wants to be a loser, but being a happy loser that may not be so bad. According to G. Clotaire Rapaille, a psychoanalyst and ethnographer whose research on salespeople led him to characterize that group with a Happy Loser archetype, being a happy loser is what drives their success. That is to say that the successful salesperson is somebody who sees rejection as a challenge a happy loser comes back to try again and again for the win. They look for new ways to get the outcome they desire. The rejection stimulates them instead of beating them down, and in the end, they win more often. And winning more often, well, that s definitely a good thing! A Strategic Account Manger s role often includes advising your clients to adopt solutions that will drive profitable growth for their organizations. Even when you are not explicitly selling a product or service, you are still in the role of a salesperson: selling your clients on the value of your insights, expertise and perspective, and convincing them to step outside their comfort zone and take a risk to earn big rewards. And like more traditional salespeople, it is likely that you hear no a lot more than you hear yes. How you treat each no will make the difference. Each no should be a chance to learn from mistakes, to refine your approach. Each no should spur you to behave like a happy loser, and come back with another recommendation on how to help your customers grow. Each no increases your odds of winning the next time. 3

4 Oh, There s No Loyalty in My Industry Sonya McAllister A very smart, experienced businessman a Senior Vice President in his company told me last week that there is no customer loyalty in his industry. Can this be true? Are there certain industries where customers do not develop a certain affinity or alignment with their preferred providers and behave accordingly? In this particular case, we had some evidence to refute his hypothesis. We were talking about the semiconductor industry which happened to be an industry where we conducted an assessment of the state of customer loyalty across the industry a few years ago. While customers are generally less loyal to their providers in this industry than what we see in others, there is proof that those companies within the semiconductor industry which excel at building customer loyalty are dramatically outperforming their peers on key financial measures. This chart depicts the difference in operating income - with the orange line showing the operating income performance for the most customer-focused semiconductor companies (growing at 82%) and the red line showing operating income performance for the least customer-focused companies (growing at only 15%). A pretty big difference, and we see the same results across many other financial measures. Now, I get that customers who are buying semiconductor products are buying based on a lot of (primarily technical) factors. But, when your performance on these factors is in an acceptable range, then customer loyalty does come into play and makes a big difference in how a company performs. We ve conducted similar studies in many other industries, and we find the same pattern. We also work with companies in industries ranging from accounting firms to retailers and have yet to find an industry where there is no payoff in building customer loyalty. But, I m intrigued by the idea is there an industry out there where customer loyalty or the strength of customer relationships does not come into play? 4

5 Blog Book Managing Strategic Accounts SAMs+Operational Excellence=Profitable Growth Jennifer Batley While a lot of the thinking around growth focuses on acquiring new business, there is much to be gained from seeking out operational efficiencies that can drive profit and growth through more positive customer experiences and reallocated resources. In short, one of the best strategies to increase your odds of profitable growth is to ensure you are operating optimally. This applies as much to account management as it does to process and functional management. At the core, it s about managing the cost to serve accounts: allocating our account management resources appropriately, and then turning newly available resources over to the systematic pursuit of profitable growth. Resource Allocation Quite simply, we need to match the right level of resources to the right customers. I think we would all agree that there are some accounts who are more or less deserving of our resources, but I m not sure we d all agree on which accounts are the mores and which are the lesses. Applying an established set of rules to categorize accounts based on elements beyond just their current value (ie, think about the future!) will allow SAM teams to strategically reallocate resources to improve profitability and capitalize on growth opportunities. Pursuit of Growth With our resources now allocated appropriately, SAMs are in a position to do two things. First, those assigned to accounts with growth potential can begin actively pursuing any up-sell or cross-sell opportunities. And second, newly freed up resources can be redeployed to pursue new customer acquisition. So what about your organization? Take a look at your SAM allocation and if it s out of balance, make the adjustments that will lead to greater growth. 5

6 Growth when is it NOT a part of our lives? Michael Good Growth it is something that encompasses our world the minute we enter it. We are born weighing so many pounds and so many inches in length and our ability to grow or not grow becomes a topic of conversation from that point forward, or at least for the next several years. We are constantly measured in these areas, compared to norms and averages, we are even judged by what percentile we are in related to both height and weight, for example, my son is 4 years old and in the 100 percentile in height. This is a great stat related to his growth, but I m only 5 10 so I guess I will be looking up to him in the near future, literally. I m slightly perplexed by that idea but that s for another day. Maybe that means he is best-in-class. As we get older, this topic of growth becomes less prevalent related to our outer-self and more a part of our inner-self. We look at how we grow as a person, whether it is intellectually, spiritually, or in a variety of other ways but growth is always something that we are either reflecting upon or acting on. Point being, growth is a part of our life, regardless of what stage of life we are in. This holds true in our professional lives as well. The difference between success and failure in the corporate world is directly related to one s ability to grow or not grow. It takes many different shapes. It s universal. In the world of account management, growth is good, but profitable growth is king. Being able to manage your accounts in such a manner that lends to positive, profitable growth, year over year is the ultimate goal. How is this goal obtained? By providing unprecedented value. I m not talking about successfully executing a statement of work, I m talking about providing insightful, game-changing expertise and perspectives to your clients. This value can be provided through a variety of methods, regardless of the service you are offering or the widget you are representing. 6

7 Blog Book Managing Strategic Accounts Executive Sponsors: Growth Contributors or Prohibitors? Sonya McAllister A VP of Marketing who has launched a strategic account management initiative in his company in the past year made the comment to me this week that his account teams were skeptical of the impact executive sponsors could have in their accounts. Even though I know we strategic account managers like to be in control of everything going on in our accounts, this surprised me a bit. All evidence I ve seen shows the positive impact gained by having top-to-top relationships between your company and your account. Some examples of the evidence: The Strategic Account Management Association (SAMA, a great resource in this topic area) says right on their web site: Executive sponsorship is considered a critical success factor for any organized strategic accounts effort. Grover Smith of Cisco presented his company s executive sponsorship program at the recent SAMA annual conference. He shared that they expanded their program from 15 executives covering 30 customers in 2006, to 125 executives covering 194 customers today and they did so because they see a positive impact on revenue, customer satisfaction (which we all know leads to growth), and keeping Cisco focused on the customer s top priorities. In some best practice gathering interviews recently completed with the highest performing strategic account managers at a Fortune 500 company, each one of the 6 high performers interviewed cited (without prompting) the influence of their executive sponsor on their overall success (high customer loyalty and high revenue growth) with the customer. So, it seems like a good idea, right? If you re starting to think so, try these tips to ensure your executive sponsor is a growth contributor: While your executive sponsor is your primary executive involved with your account, don t hesitate to tap others (particularly subject matter experts) as needed. Many of the high performers we interviewed mentioned using their executive sponsor to help them secure these additional resources when necessary. Be sure to find the right executive that fits with your customer. Grover Smith of Cisco shared that their sponsors are selected via a six-step process with the last step being an expectation setting/match analysis meeting between the account team and the proposed sponsor. Keep your executive (and you and your entire team) focused on your customer s priorities rather than your own. Remember, you all want the same thing success for your customer (okay, so that will lead to your success too nothing wrong with that). 7

8 Stranger Danger Jennifer Batley Growing up, every child learns about Stranger Danger and the risks associated with an unknown person. Don t talk to strangers becomes ingrained in our psyches and stays with us forever. The problem is that as we enter adult life, we can face a different kind of stranger danger. For SAMs, the risk reverses such that now the danger lies in NOT talking to strangers. What I mean by this is that as a strategic account manager, if you don t have relationships with some critical players in your customers organizations, then you face danger in the form of risks to your current business and/or missed opportunities for growing your business with that customer. The more decision-making power these strangers have, the greater the danger they pose to your relationship. Fortunately, you can address this problem in two simple steps: 1-identify the strangers, and 2-talk to them. OK, so maybe step 2 isn t exactly simple, but the more successful you can be at it, the more opportunities you will have to get new insights into your customers business and uncover opportunities to drive growth. Who s the next stranger you ll be introducing yourself to? 8

9 Blog Book Managing Strategic Accounts I Know Exactly What My Customer Thinks of Us Sonya McAllister Have you ever heard this from a Strategic Account Manager? Maybe you ve thought it yourself or even said it to someone. I ve seen an account manager go so far as to block any other access to his customer because any question about that account which needs to be answered can be handled by him. While it s true, we do know a lot about the accounts we manage and how they view our company, I ve got evidence that suggests we don t know everything. We launched our annual client feedback process this week, and I m not embarrassed to say that I ve learned something new (or at least a new angle on a current issue) from every single person who has responded from my accounts often about additional ways we could be helping them. It s not just me. The owner of the largest account at one of my clients learned enough when we initially asked for some feedback at his account that he included 5x the number of people for providing feedback the following year. Customers often tell us things via this avenue which they may not otherwise because: They know others in the company besides us will see their input They want the chance to shape our company s future plans and directions They are interested in our success and sincerely want to help So, even though we know a lot about our customers, we should really encourage them to participate in our companies customer loyalty programs. We learn some things (often ways to grow and expand our relationship), and we get the benefit of increased visibility to our customers issues within our company. 9

10 The more you know, the more you (can) grow Jennifer Batley I m guessing many of you are familiar with the The More You Know public service announcements (PSAs) that run on NBC, and maybe even with their forerunners, the One to Grow On PSAs. These spots enlist celebrities from Jimmy Fallon to Michelle Obama to inform the public about issues that are, or at least should be, important to us. Many of these issues tie to health care, and the PSAs promote lifestyle choices that will result in healthy growth. Healthy growth something each of us should strive for not only personally, but also for our business relationships. And wouldn t you know: the concept of The More You Know applies just as well in the world of strategic account management because the more we know about our customers, the more we are able to help them succeed, driving growth for them right along with growth for ourselves. Here are just a few of the sources of knowledge that any account leader can use to get informed and get growing: Internal financial measures, such as sales, revenue and repeat purchase pattern metrics External financial measures, such as your customers stock performance Annual Reports, which provide insight into strategy, leadership, markets and financials Customer feedback, from sources such as annual relationship surveys, transaction surveys, customer service interactions, and your own interactions with the client team Public information, as available on your customer s own website, as well as other online sources of opinion and fact Industry information, from analysts and relevant publications or other expert sources Competitive information, available from most or all of these same sources Turns out, knowledge really is power, and it s a power that is increasingly accessible and essentially ours to squander if we choose not to collect it, absorb it, or act upon it. And that is one to grow on! 10

11 Blog Book Managing Strategic Accounts Performance Enhancing Drugs for Strategic Account Managers Noah Grayson I watched famed baseball slugger Mark McGwire confess his use of steroids to Bob Costas. Not a huge surprise when McGwire admitted to using steroids and human growth hormone during his homerun record-setting baseball career. But what was surprising was the overwhelming belief McGwire had that his performance wasn t enhanced by the substances. Following the interview, Bob Costas said he firmly believes McGwire was genuine in his remarks that the steroids only helped him overcome injury, not gain physical advantages. I think you only need to look at McGwire s pre and post steroid use homerun to at-bat ratios to understand the impact steroids had on his performance. Lucky for you I m not going to share my opinions on Mark McGwire or my thoughts on what the steroid era means to baseball s future. I will tell you that I believe performance enhancing drugs provide players with physical advantages. This got me thinking about the tools that provide Strategic Account Managers with a competitive edge a SAM s performance enhancing drug so-to-speak. Here are the top two tools that I believe provide SAM s with an advantage over their competition. 1. Developing Strategic Account Knowledge: there are numerous public sources of information available to us that provide insight into our clients and the challenges they face 10K s, analyst reports, press releases, etc. The problem is this information is available to everyone, so the unique advantage you receive from this information alone is zero. One unique advantage we have with our current clients is access to people and the unique insights they can provide about the business and their needs. As SAM s we need to insure we have a systematic approach to tap into this information and a method for putting this strategic account knowledge to work. 2. Strategic Account Planning: The account plans are where we put our strategic account knowledge to work. Here is an Alan Lakein (the famed time management author) quote about planning that I like, Planning is bringing the future into the present so that you can do something about it now. If you re not leveraging account plans currently you should be. We re all looking to build and maintain a competitive advantage in the marketplace. The good news is that there are time tested and ethical ways for SAM s to go about it. 11

12 Getting Fresh Jennifer Batley Sometimes managing a strategic account means sitting down with an unlikely group to talk about blowing up what is and map a path to what could be. This week I had the opportunity to spend a day with a client s extended Voice of the Customer team. This included internal stakeholders from critical business units as well as representatives from five companies who support the initiative. Yes, we are competitors - but we also collaborate to support this client in driving optimal use of their customer feedback, and the objective of this session was to launch a complete rethinking of their customer listening system. Now, there is nothing wrong with this client s system in fact, many consider it to be outstanding but it has been running for several years, and over time their business and strategies have changed. In a situation like this, it makes good sense to step back and get a fresh perspective on things. Discussion was lively and covered strategic questions (What does the future look like?) and tactical considerations (What does and doesn t work today?). As a group, we left with a renewed vision and a commitment to taking this client s program to the next level in terms of relevance, alignment, communication and actionability. When was the last time you got fresh with your accounts? 12

13 Blog Book Managing Strategic Accounts Don t create your own noise Brad Linville One of the six customer listening categories from our Strategic Assessments is communications. One can t ignore the critical importance of communicating information both internally and externally related to customer listening. In communications planning, it s common to hear things like rise above the clutter and don t get lost in all the noise. But did you ever consider that you might be creating your own noise, unwittingly? William Zinsser is a renown author emphasizing word economy and he professes that ambiguity is noise. So are redundancy, vagueness, acronyms, and jargon. The list goes on misuse of words, clutter, unnecessary adverbs (like successfully avoided), adjectives (ongoing process), and phrases (in a very real sense). In customer listening, information is our sacred product and noise is the pollutant. Noise pushes readers/audiences away so carefully read what you ve written, carefully rehearse what you plan to say and watch for ways to stifle unintended noise in your communication. The remaining message will travel to your audience as a pure signal, unencumbered by noise. I came across a cool-sounding book What Clients Love that touches on this topic and it will be my next read. I ll share additional highlights in a future blog. Have any of you read it yet? 13

14 About Walker Walker specializes in customer loyalty and related customer strategies, including innovative approaches to segmenting, valuing, obtaining, serving, and growing customers. Walker s diverse team of consultants provides tailored, comprehensive solutions to help companies achieve their business objectives and, ultimately, grow shareholder value. Walker s consultants regularly conduct workshops and assessment programs to help organizations improve their ability to administer customer listening programs. Walker Clients Include: Adobe Avaya Avnet Brightpoint Castrol Cisco D&B Dow AgroSciences ExactTarget EMC IHS Intel McAfee Motorola NCR NetApp Pepsi Tetra Pak WALKER INDEX NASDAQ DOW JONES S&P 500 The Walker Index is a stock index comprised of current Walker clients. Companies are included in the index only during their tenure as Walker clients. Companies attracted to Walker are committed to using the customer perspective as an impactful management tool. The Walker Index indicates these companies outperform the broad markets. For more information about the Walker Index, please visit Pennsylvania Parkway Indianapolis, Indiana Telephone: International: