Technological advances are accelerating the pace of business change like never before. Markets and customers can change overnight. Yesterday’s suppliers can become tomorrow’s competition, and yesterday’s competition can become tomorrow’s strategic partner.
The companies that can’t adapt — and fast — will find themselves swallowed up by the companies that can. You already know all this. But what can you do about it? SAMA and 3M recently co-hosted an executive symposium at 3M’s campus in Dusseldorf, Germany, where practitioners from 3M, Arcadis and DHL shared their experiences from the point of view of their respective companies.
Read on to find out what you, as a leader in your SAM organization, can do to position your company for sustainable success:
“Shoot for the moon.”
Most SAM organizations are expected to grow by at least double the rate of the rest of the company. This means that creating value on the margins — smoothing out a customer’s supply chain, say — isn’t going to deliver the impact expected by upper management.
At 3M that means “shooting for the moon,” says Dan Snustad, technical director in Western Europe for 3M Research and Development. “People talk about failure, but I talk about ‘fast learning,’” he says. “If you don’t have failures, you’re going to be incremental. You’re going to be ‘me too.’”
At 3M that means creating a culture that encourages taking risks. Management at 3M encourages a culture of innovation and risk taking in a number of ways, including:
Boundaryless organization. Employees have carte blanche to talk to the owner or marketer of a technology or capability to see how they might be able to leverage it for a customer.
“15 percent time.” Employees are empowered to spend up to 15 percent of their work time to pursue projects they’re passionate about but may lay outside the scope of their normal work duties. The initiative has produced some of the company’s best sellers and become a model for other companies looking to push an innovation agenda.
The ability to move very quickly to prototype, offering multiple early stages where employees can try and fail without retribution.
“For innovation to happen,” Snustad says, “You have to create the space to allow risk.”
“Design thinking isn’t just another process. It’s a mindset.”
So how does this mindset filter out into the organization? One way is through 3M’s embrace of the principles of design thinking. Monica Dalla Riva, the company’s head of design in Europe, stresses that design thinking isn’t about aesthetics. The word design comes from the Latin de-signare, or “to create meaning.” Riva uses this to guide her team’s design efforts and 3M’s broader approach to customer-inspired innovation:
“Design thinking isn’t just another process. With a process, you do all the right steps and then you’re done. With a mindset, you have to think at every step of the way, ‘Am I doing this for the customer? Is it delivering meaning?’”
What else is design thinking NOT? It’s also not just another way to generate new ideas, Riva says. Every company has ideas. The goal of design thinking should be to find the most meaningful ones.
For Riva, the goal of design thinking is to create meaningful experiences for the customer. Thinking of your customer as people, and zeroing in on all the different touchpoints your company has with your customer, will serve as your guide to making sure you are working on solving the right customer problems.
One challenge of a design thinking approach is data — specifically, there’s no data about the future. So how do you create meaningful innovation for a future state you don’t have concrete information about? If you create innovation that’s too far ahead of its time, it won’t be meaningful for people and won’t be adopted.
That’s why Riva’s team starts by looking 10 to 15 years in the future — by leveraging internal expertise and outside research to build future scenarios — and then works backward, to look three to five years into the future. But design thinking isn’t just a way of generating insights about the hazy future; it also can be a very concrete tool to engage with your customers.
Riva and her team used a design thinking approach to reimagine the typical “Tech Day” where customers file past a bunch of tables haphazardly covered with the company’s solutions. Riva and her team created “Design Nights” with the goal of creating new ways to engage meaningfully with the customers by telling a story. Rather than grouping technologies chronologically, or by 3M industry segment, the technologies were grouped and presented in a way that would be meaningful to the customer. Because in the end, if you’re not bringing meaning to your customers, you’re just another vendor peddling just another product.
“We’d like to see this a little better.”
What does it look like when you use design thinking for an actual customer engagement? Here we turn to Arcadis, the Netherlands-based design, engineering and management consulting firm, and Jim Ford, the company’s global head of client development.
One of the many areas Arcadis works in is environmental remediation, and this success story grew out of a simple customer request: “How can we make this process more impactful by getting a better visualization of your recommendations?” To put it very simply, companies hire Arcadis to build conceptual models of sites that need may need remediation, which the companies can use to make decisions about risk and resource allocation.
In the past, this was all in two dimensions, on paper. But recently a customer asked Arcadis if it could make its predictive models more dynamic and interactive. The SAM worked with outside software providers to develop a tool to build an interactive, three-dimensional digital representation of the site. Suddenly, the customer could grasp the specifics of the site much more intuitively. But they wanted to be able to drill down deeper into the data.
For this, Arcadis built a cloud-based platform and leveraged IBM Watson to bring predictive analytics into the equation. Then, using 3D printing and augmented/virtual reality, Arcadis rendered the models the customer could feel, touch and manipulate. This cut the time to remediate by several years, helping the customer make more informed business decisions and saving millions of dollars. And it all started with the innocent customer request, “We’d like to see this a little better.”
Meeting your customers’ increasingly complex challenges requires new way of working, and in many cases this starts with recognizing that your company can’t possibly have all the answers in-house. This reality will require you to embrace an ever more expansive definition of your customer’s ecosystem to include not only your customer but your customer’s customer, their other suppliers, your own suppliers, and even your competition.
This is bound to make people in your organization uncomfortable. Jim Ford, the global head of client development at the Netherlands-based engineering, architecture and business consulting company Arcadis, offers five rules to live by as you begin (or continue) to expand your customer ecosystem paradigm.
Decide what you want out of co-creation. It is critical to choose with whom you want to engage and how. Developing this type of inclusive ecosystem requires massive effort, so it’s critical to (a) have management buy-in and (b) decide which markets and which customers warrant the investment. Once you’ve done this, you have to ask these questions: What’s the strategy? What’s the client experience look like? What do you want the output to look like? How are you going to assess whether the mutual value you create justifies the investment? “If you don’t answer those questions,” Ford says, “you’re going to be DOA.”
Position yourself and your company as the ecosystem captain. When you take on the role of assembling and leading the ecosystem, you get to define who’s “in” and who’s not, what the goals are and the role that each participant will play. Most importantly, the client’s perception of your value goes up immeasurably.
Develop a strategy to leverage and connect talent across all the organizations. It can’t be just you, a technical expert and your executive sponsor. Do not underestimate the knowledge, expertise and creativity of people in your organization who have nothing at all to do with your customer or even your customer’s industry. The more expansive your view of who’s “in” from your organization, the better you’ll be able to “zip up” with your customer’s organization. The strength of the connective bond comes with each tooth that connects you to the customer, and the power of having a different perspective is huge.
Recognize that you can’t have all the solutions in-house; think of yourself like a broker. We stipulated at the beginning that you won’t have all the answers. You have to think of yourself as the idea broker, reaching into other organizations — even your competitors’ — for expertise you may not have in house. This is the part that’s going to make you, and others inside your organization, the most uncomfortable. “That’s OK!” Ford says. So long as you’ve cemented yourself as the ecosystem captain, you’ve got nothing to worry about. This expanded group of problem solvers will allow you to come up with much more robust and impactful solutions.
Make sure you have a mechanism for scaling your solutions. The best solution in the world is next to useless if you don’t have a plan for scaling your new solutions and platforms for other customers, markets and priority sectors.
Do you have the right blend of skills and competencies to thrive in this ecosystem leadership role? Here are Ford’s top three competencies for 21st-century SAMs:
• Understanding the needs and key drivers of your customer and market trends driving their orientation.
• Combining that knowledge with knowledge of your own organization to create an actionable plan.
• Having agility, leadership skills and ability to translate plans into action.
Want to know how you compare to your peers in these (and other) critical SAM competencies? SAMA has conducted close to 2,000 individual competency sessions, offering SAMs and extended account teams a data-driven snapshot of how they’re performing and a roadmap for improvement.
Ecolab CEO Doug Baker delivered the opening keynote address at SAMA’s 2016 Annual Conference in Chicago, where he spoke about (among other things) how he built a culture that puts the company’s customer at the core of its business. Ecolab is a $14 billion global provider of water, hygiene and energy technologies and services to the food, energy, healthcare, industrial and hospitality markets.
Bernard Quancard: At what level do you position the corporate account manager position within the organization? What is the career path? Are these managers going to stay in the position forever, or would you move them back and forth?
Doug Baker: At Ecolab, our best salespeople aspire to become corporate accounts managers, because they are among the most important sales positions within the company. We seek strong salespeople for our field manager roles as well. A field management position can be a developmental experience for a high-potential employee who is moving up through the organization. In these instances, we are moving them from what I would call functional responsibility and into the commercial side of the business.
The corporate account manager position can be both a career and a development opportunity. We make sure that we are offering the right titles and compensation to allow associates to make corporate accounts a long-term career. We do not want to create a situation where the only way these associates can receive equity pay or earn a spot on the general management team is to leave corporate accounts. So, we have equity pay for our corporate account teams, and the leaders of our big corporate accounts in our largest divisions are on our general management team.
You have to have the compensation and prestige signals right within the company. I do not want to drive all my best salespeople into management roles when it may not best suit them.
BQ: Let’s talk about the data tsunami, you know all this data which is being collected, which is going to present so many opportunities for innovation, like new services. How do you see the training of corporate account people?
I believe there’s going to be a big learning curve for both our corporate account managers and our field associates. However, we’re not going to make corporate account people into data scientists. This data has to be fairly well integrated into what we’re providing, so it’s a closed loop for customers. We must turn data into valuable insight for our associates and our customers, not simply do data dumps. In the restaurant business, we serve more than half a million restaurants around the world. That’s a lot of sites, and it’s a lot of data. How do you make this data helpful? What our customers are telling us is, “Don’t just tell me that I have problems. Tell me how you’re going to help me reduce my risks.”
BQ: Where do you think you are going to get the best talent for corporate account managers? How do you see the talent pool? Where would they come from, the best?
Usually, they come from our field. We hire frontline salespeople. The path is a little different in different businesses, but frontline salespeople often become frontline sales managers and then move into corporate accounts. So they’ve often managed a group before their corporate account responsibility, and they already understand the industry. They’ve served the industry and understand what’s happening at a customer site, how the technology works and how the field interacts. That’s a big component of what they’re selling: knowledge of the customer and knowledge of our technology. And strategic customers are seeking corporate account managers whom they trust and respect, and who bring value to the party. It’s more than having wonderful sales skills; it’s having competency and knowledge, and understanding how the technology can help – and being persuasive. I believe the persuasion helps bring the knowledge to the forefront. It does not replace knowledge.
BQ: Do you request your C-levels to be sponsors for the most strategic customers?
I’d say almost every one. However, you have to be careful not to have a C-level sponsor become the corporate account leader for the team, because it doesn’t work. I was a C-level sponsor, and corporate accounts reported to me directly; I didn’t have it report up through sales. I had the field sales leader and corporate accounts leader both report to me. I knew exactly where we were with accounts, and even made calls to accounts. There were times I’d take them on as a project, because I could help raise the level we were calling on within the customer.
BQ: I think a C-level sponsor can really help in some instances to go higher in the customer organization. So having C-level sponsors for strategic accounts can be a very valuable thing, not all the time, but a couple of times a year.
Occasionally having a C-level leader join a sales call can be a good strategy. But you need to be thoughtful about when it helps and when it doesn’t. [Never] bring them in on a pricing discussion. Sponsors should be used for offense, not when the account manager is playing defense or doesn’t like where he or she is in the negotiation. As a negotiating tactic, it’s common to hear someone say, “I have to see a higher authority on that” to buy time to rethink or retrench. But if the C-level is sitting there, it doesn’t work.
BQ: Do you feel your top human resource people understand very well the role, especially the evolving role, of the corporate account manager at Ecolab?
For the most part, I think they do. It has been a very critical position for a long time. We’ve compiled a lot of industrial-psychological profiles and tried to line up who’s going to be successful in corporate accounts. From these profiles, we’ve selected about 50 people, and, of them, we believe about 25 are stars. So we try to identify and understand the consistent traits. There are some traits that aren’t often discussed, but are foundational; likability is one. Corporate account managers need a certain IQ, and they need the ability to listen and understand, because they’re dealing with very high-level people and they need to structure deals in a way that engenders trust. These traits are not often measured.
BQ: Also: being a good listener. Sometimes the lone wolf, the big hunter at sales, he doesn’t listen. He pushes the project, and the listening really allows you to have the outside-in view, which is so critical to understanding customers in depth.
I agree. And corporate account managers have to be willing to push for change within their own organizations. One thing I’ve learned is if corporate account managers are dealing with customers all the time, they tend to cash in all their “patience chips” with the customer, so when they get inside their own organization, they can be very impatient and not use their sales skills internally. In fact, they can become anti-sales within the organization.
This is something account managers need to understand: getting people to do something within their own organizations often takes very similar skills to those they’re exercising outside their organizations.
BQ: Within your corporate accounts, do you feel the need to tier your customers?
We have different businesses, and some do not tier corporate accounts, while others tier them in different ways, such as “value buyer” or “innovation buyer.” I always am a little fearful that it can be a self-fulfilling prophecy, that once customers are labeled as price buyers, we won’t call on them anymore.
Often you just have to say, “If I’m not succeeding here, is it because I do not have the right value proposition, or is it that I’m not presenting it right or not dedicating enough time?” Our account managers show me their top ten accounts, but I want to see the top ten potential accounts in the entire industry. What’s our share there, too? I want the accounts they’re not selling to in front of them every month, staring at them, and account managers understanding what it is they have to do to make this list look different next year or the year after.
BQ: My question regarding tiering maybe doesn’t apply so much in your business as a whole, but if you look at a company like General Electric, they identify some top customers in terms of the fact that they want to innovate.
We do the same. We have marquee accounts that are very important to have because the rest of the industry looks to them, and we manage them a little differently because they demand it. They negotiate harder on innovation, on service, and, frankly, on water and energy savings than they do on price.
BQ: So you manage them a little differently.
They receive more of our resources.
BQ: More resources and maybe different people to manage them?
To some degree, yes. We have teams of seven to eight people, who are 100 percent dedicated full time to large, global accounts. In certain instances, our people have offices in these accounts. To us, these accounts are worth it; it’s a very smart investment.
BQ: And the corporate account manager for that kind of customer, does he or she have a very long tenure, do they stay long in the account?
Often they do; they can become a senior vice president in that position. We want, and can get, people who are really skilled and have the dedication to fulfill financial and, I would say, prestige ambitions, by staying in corporate accounts. We do not want to lose these people by saying, “You can’t be a senior vice president unless you get out of corporate accounts.” It would be self-defeating.
BQ: At Schneider, for those big customers, the role and compensation of the strategic account manager is the same as a country manager.
Ours is the same. If you don’t do this, you’re going to drive them out of corporate accounts and into being a country manager.
BQ: How would you summarize the key facets of your role as the global CEO in influencing the quality of these high-level corporate managers? How do you really influence them?
I believe one facet of my role is to ensure that we maintain our high standards in terms of who we’re putting into these positions. It’s a bit like any club, or even a board; people want to join organizations that have people they respect and admire, and if you start polluting the membership, you start polluting the attractiveness of the role.
But it’s more than that; you need a compensation structure that is consistent, and you have to provide the ability to move up in the organization and other incentives to retain your talent, which to us is very important.
Corporate accounts can be both a great development role for general management and a great career position for those who are inclined to do it. We want to have a corporate accounts path where people can have a career. If I don’t create this kind of environment, I’ve created a challenge.
BQ: Coming back to those customers who are marquee customers, you expect much higher business outcomes with those, don’t you? Like, growth, retention, loyalty, profitability and innovation?
Yes. It’s a bit of a virtuous cycle, right? When you put the resources on it, there’s some inclination between the two organizations to start a relationship, and then you feed it and are rewarded for feeding it. And then you want to feed it more. Some of it depends on the culture of the customer organization; some customers really want to push suppliers into giving them advantage, not just low cost. They really want help, they want to innovate, and we want to help them achieve their goals.
The influence, control and sophistication of procurement organizations over their companies’ buying processes have been increasing exponentially for years. Whether companies are selling commodity products, new technologies or highly differentiated professional services, sales professionals consistently report that the rise of Procurement has contributed to making their sales more difficult, time consuming and complex.
As salespeople come to terms with this evolving selling paradigm, they will be forced to address different challenges from Procurement that will only become more common and pronounced with time. We’ll address five of the most common ones.
#1 Procurement as gatekeeper
While end users typically still play a significant role in decision mak- ing, more and more corporate policy now requires end users to go through Procurement to make their purchases. But treating Procurement as “the enemy” will quickly make them your enemy. Better to put yourself in their shoes to help understand what drives them. But how?
· Engage the procurement professionals responsible for the product or service you sell, perhaps as a facilitator or convener in conversations with end users. This will help them fulfill their goal of maintaining a degree of control over the buying process, while simultaneously ensuring that they get to hear firsthand from your end users about the value you provide to their organization.
· Explore ways to help Procurement become trusted advisors to their end users. For example, you could provide them with an overview of what you are seeing in their industry, share with them what you are hearing from their internal customers or tell them about ways you have been a resource to your other accounts.
#2 Selling value when Procurement seems only to care about price
Try to engage in conversations with Procurement, end users and other “coaches” within the organization to better understand what the customer’s procurement organization cares about – both in general and specific to what you are selling. For instance, you might discuss with them:
• What end do they ultimately hope to achieve, and what impact do quality, convenience, features, service or other differentiators play in the organization’s ability to achieve their desired results?
• To whom is Procurement accountable, and what are they being asked to deliver?
• How are they being measured?
• What supply chain risks keep them up at night?
• Are they open to working together to uncover cost savings, to refine pro- cesses and to innovate?
Ultimately, the more you learn about Procurement’s role and what they care about, the easier it will be to frame your solutions, your organization and the data they care about from their perspective – rather than from your perspective or that of your end users.
#3 Negotiating when it feels like Procurement has all the leverage
Salespeople often view negotiation power as a function of who needs the deal most. Since walking away from the deal is rarely a viable option for most salespeople, Procurement is perceived to have the power. In fact, research from Vantage Partners indicates that more than 75 percent of all sales and procurement respondents studied believe that the other side has more leverage during negotiations than they do.
Always think about potential sources of negotiation power you may have overlooked. For example, how long will it take for end users to get up to speed on a different supplier’s technology or get used to working with a different service provider? What risks to their supply chain are posed by a switch that doesn’t work out or moving down the learning curve with a new supplier? Are there costs with a competitor that will lead to increased total cost of ownership that they have not thought through?
#4 Managing Procurement’s reliance on the RFP process
If you have built trust- ing relationships with end users and Procurement alike, then you may at least know a request for proposal is coming. You may even be able to get in front of it and help shape the request by initiating a dialogue with your customer about some appropriate criteria to use when making buying decisions around your product or service, or by sharing market intelligence you have.
By far the best way to frustrate Procurement in a response is by submitting standard or canned information, answering questions that you preferred were asked versus ones that actually were asked, or, even worse, submitting endless, disorganized marketing materials that were not requested. It is critical to consider the actual questions and make sure these are answered directly. Paying attention to what is being asked will provide valuable intelligence about Procurement’s interests and the key criteria they are using to evaluate proposals, and your responses should be framed accordingly.
#5 Dealing with threats, stalling and other hardball tactics
Procurement often engages in some of the toughest negotiation tactics: threatening to put the business out to bid, insisting on excessive or unreasonable demands, misrepresenting the facts, getting angry or emotional, and even making personal attacks.
The trick in responding to the difficult tactics themselves is, first, to not react. Then, remain firm and constructive. All too often, the supplier simply gives in and makes concessions in order to close the deal. But research from Vantage Partners has shown that making such exceptions can lead to a precipitous drop in average selling prices for all customers over time.
Ultimately, you should not grant a price concession on its face without connecting it to something you are getting in return — or to something they are now not going to get as a result. That might mean re-scoping, chang- ing volumes, extending timelines or decreasing add-on services.
For the foreseeable future, Procurement will continue to expand its role in the buying and negotiation process. Getting into Procurement’s shoes and developing skill in negotiating with them are essential competencies for every account manager working today. Likewise, all sales leaders need to equip their teams with the data, processes, preparation and tools they will need in order to standardize engagement with Procurement and ensure that positive outcomes are not just possible but repeatable.
Delivered at SAMA’s 2017 Annual Conference in National Harbor, Md., watch as Francis Gouillart, President and Co-Founder of Experience Co-Creation Partnership (ECC Partnership) lays out five bold predictions for the future of SAMs and the SAM profession.
InMarch McKinsey & Co. Expert Partner Jennifer Stanley delivered a SAMA webinar entitled “The four megatrends upending strategic accountmanagement and how to approach them.” This piece is adapted from her webinar.
How do you deal with a force you can’t avoid or control? A megatrend is this type of force, and it’s one that if you don’t pay attention and respond to, you’re going to be left behind by your competitors who ARE paying attention. Today’s megatrends are profoundly reshaping the way customers engage in their purchase journeys. And when you think of a “customer,” realize that it refers to not only decision makers and procurement organizations but also influencers, peers and anyone else who could be part of the purchase decision journey – whether you know them or not, whether they’re obvious in the purchase decision journey or not. So it’s a very wide interpretation of the term “customer.”
There are four megatrends that are most important for strategic sales organizations because they are affecting how your customers are and will be buying. In turn, they change how you should be working with the very broad audience underneath the customer umbrella. Briefly, these four megatrends concern technology, demographics, user-centricity in B2B buyer behavior and the economics of interacting with customers.
The ABCs of information technology
Regarding technology, there are implications for the buying process ushered in by software being everywhere in our lives – and how customers are interacting with technology, both personally and professionally. I’m referring to the new ABCs of Information Technology that govern how customers interact with technology.
The ABCs — Analytics, Bring your own device and Cloud-enabled collaboration — are shifting buying dynamics, combining to change buyer and influencer behaviors. Today’s buyers are more sophisticated; they have access to more information, more peers and more influencers. Technology makes it really easy for them to understand and develop a view of your organization as a supplier, your offerings and others’ experiences with your offerings.
The world where the SAM can control much of the conversation is gone. It’s become much more one of managing information and shaping the conversation, having a collaborative discussion with the full understanding that the customer has a lot of information that didn’t come from you or from someone else on your team or in your organization.
What is the implication for how you serve the customer? This technology-enabled access to information, to preferences and to others’ opinions results in much higher expectations customers have as buyers as they move through the purchase experience. The main implication for strategic sales organizations is that, along with these changing experiences, traditional buyer organizations are changing, too. Customers are collaborating more amongst themselves, and they are using technology to collaborate and share information, which sometimes may signal their willingness to buy. So paying attention to and across the digital platforms they’re interacting on is really important for picking up on those signals.
What is the impact of caring about technology for a SAM, about systematically going through, and relying on your organization to go through, big data streams that result from so much digital interaction and then applying advanced analytics? Advanced analytics is a broad term and may be used differently in different organizations. Here, it means matching data from three or more sources, one of which is external to your organization. For example, external data could be tracking customers’ digital footprint behaviors – how they’re moving and shifting across the different channels they operate on – or it could be doing a digital footprint scan of your critical influencers, in terms of how their IP addresses move across the various social media channels. This is not always possible because of privacy constraints; but where it is possible, it’s worth it. The idea is to not just look at traditional invoicing and CRM data, but to combine external with internal data to deliver a new set of insights about how to better serve the customer and how to better target segments that are important to you with more tailored offerings. Advanced analytics have to result in something that is practical and useful to the sales organization; otherwise, it’s just numbers.
McKinsey & Company has some data showing that having the backing of advanced analytics makes a big difference. Fifty-two percent of B2B firms are using advanced analytics to generate new customer insights and leads, while 46 percent are using them to create more relevant customer profiles and offerings. And these companies are enjoying 8 percent higher win rates. There have been cases where a supplier has been locked out in a certain market or at a certain customer plant, needing a lead to break into the market or get into the plant. The supplier gained access thanks to more insight from data analytics into how to create a more relevant offering for that specific sub-segment of the market or that specific strategic account. So the data shows about half the B2B firms benefiting from data analytics with better leads and about half benefiting with being able to more successfully tailor their offerings. The data also shows a substantial movement in the conversion rate from proposal through to a completed sale – an 8 percent higher win rate. Particularly in long sales cycles, it’s worth making the investment in data analytics.
Demographic trends: new pockets of growth and the rise of millennials
A second megatrend affecting strategic account management concerns two types of demographic changes: new pockets of growth in emerging markets and the shifting of the guard from boomers to millennials.
The fact that emerging markets are places to be present is not that new or exciting. Emerging markets become far more exciting when what is happening in those markets is considered and translated into where an organization needs to make sure it has a presence and a voice for its strategic accounts, given where its customers are or are going. Looking at China, for example, 220 cities will have populations over 1 million within the next four years. Compared to a mature market like Europe, only 35 cities will have more than a million people by 2020. This is an order of magnitude difference in terms of the number of customers.
Those emerging cities in China will be home to roughly 60 percent of the world’s consumers. That’s a lot of downstream spend, and it’s likely going to go into some pretty big categories: probably continuing into mobile devices and other types of consumer electronics, in addition to other consumer products that continue to have appeal in local markets. When this is considered along with looking back up the value chain into the supplier world, some staggering opportunities begin to appear. For example, China’s telecom and transportation spend is likely to triple, even in a slowing economy. So if you’re selling into these markets, that’s a pretty important space to be. And if you think about the infrastructure investments to support the growth of these consumer markets, roughly $10 trillion a year will be needed to fuel these types of investments on a global scale.
When you think about how to deploy your strategic account team, looking at emerging markets in this way may help you to think about where you spend more or less of your time. While this is an exciting set of opportunities, it could be daunting because it requires a level of agility and creativity that could be new to your organization or, in some organizations, frowned upon. Having the agility to spot trends ahead of your competitors, to be able to quickly shift in your supply chain and distribution centers to match where global growth is going at the level of cities and neighborhoods, is pretty important.
A second demographic change is the rise of the millennial generation as purchasers and the shifting of the guard away from the boomer generation. Some of the preferences of millennials present both challenges and opportunities for SAMs in dealing with procurement professionals.
What this means in the strategic sales sense is that customers may have a very different set of expectations about work interactions, about when and how they can interact with us. Information gets shared and networks get built through digital communication. Relationships get sustained that way, which is a different world from the traditional person-to-person interactions, the private interactions that most of us are used to. That’s not to say that personal interaction goes away; it just gets augmented. As those lines between what’s social and work and what’s social and personal get increasingly blurred, it’s really important that SAMs navigate these waters carefully and manage their teams to do so. But there is no doubt you have to swim in these waters one way or another.
User-centricity in B2B buyer behavior
The third megatrend is about the consumerization of B2B buyer behaviors resulting in very high expectations.
The life you lead as a consumer, and the lives your customers lead as consumers, become quite important for thinking about the buying experience. Customers today want “me plus free plus easy”; increasingly their research into and experience of your offerings is based on peer-to-peer conversations in whatever medium is most convenient. Chances are, it’s digital.
If you need to learn something or want a little more insight into marketing analytics or accounting, you don’t have to get formal training; you can take a free course online. If you need more document storage, you can download Dropbox. A small business that needs documents signed can go to DocuSign and make it happen. Every step of the way in getting work done, there are easy ways that feel very natural, where self-service interaction feels like a personalized experience. There’s a heavy degree of user-centricity to it. It’s “me” driving the journey, not a strategic account organization.
So the “me plus free plus easy” that you enjoy as a consumer needs to be reflected in how you think about strategic account management. What do your sales processes look like over the course of the con- tract? Are you making those processes personalized and easy? Organizations often talk about being easy to do business with, but how many times do you put roadblocks in front of the customer, whether time or documentation roadblocks that make it harder for them to do business with you? This will become even more important for strategic account organizations moving forward.
“Me plus free plus easy” boils down to making sure you’re covering these three aspects of interaction, even with the most senior of strategic customers. It can be hard to imagine the informality of using “me plus free plus easy” when dealing with a chief procurement officer or a chief information officer, but this expectation does exist, even if it’s not obvious.
The economics of interacting with customers
The fourth megatrend is what happens as a result of falling experimentation costs and the rise of the sharing economy. For example, there are 19 million handheld electronic drills sold in the United States. Their average active lifetime use is 12 minutes. At that rate, you could borrow a drill from your neighbor and save money. Almost everything is a service and can be shared, and consumers are comfortable with sharing their own idle inventory.
However, imagine a world in which five local hospitals get together and look at the total capacity and usage time of their CT scanners and then realize that, instead of each of them having a scanner, four scanners would be sufficient to meet their needs with no adverse impact on patient experience or quality of outcomes. Ask yourself if there are opportunities for your customers to share idle inventory or capacity, particularly for large capital purchases. If so, your sales forecast would look different because you have to consider those buying networks. This has been seen with the rise of purchasing organizations, but this is different because purchasing organizations represent the demand of the group – not necessarily the individual member’s demand.
In interacting with customers today, there are three things to remember.
1. Customers expect you to know them before you meet them.
This is not just about getting to know someone new; it could be about someone you’ve done business with for a long time. What’s changed in their personal life and organizational life? Basically, they expect you to know this and be paying attention.
Do you check LinkedIn profiles before meeting with customers, even ones you know well? Learning something new about a customer could help you to continually personalize the relationship. This knowledge could reshape your thoughts on how you open a meeting or on how you shape the tone of the conversation. For instance, one SAM found out through LinkedIn that his customer’s daughter had just won a scholarship to a university that happened to be the SAM’s alma mater. The SAM realized he needed to rethink his upcoming conversation with the customer and thought to offer to take the customer and his daughter to a football game at the university. There is an expectation of pre-fill knowledge before you meet with a customer; millennials, especially, don’t expect that there will ever again be a cold interaction. They put information about themselves out there and they expect you to go get it.
2. The traditional sales funnel is permanently altered.
A new paradigm of customer journeys has emerged, different from the traditional linear sales funnel. This new paradigm forces a reorganization of resources in response to the non-linear behavior of customers. With long sales cycles, customers are making predictable purchases on predictable contracts. However, between those contracts and before the next negotiation comes up, things are still happening as the existing contract is being serviced. Decisions are being made and opinions are being formed that impact the next contract cycle.
In a 2012 McKinsey research study, which is being replicated this year, B2B buyers and influencers in the U.S., U.K. and Germany were asked how much of their pre-purchase, pre-negotiation activities they conduct 100 percent on digital channels, i.e., not in the presence of an account manager. That number was 35 percent.2 In the next round of research, the plan is to include Asia and Latin America, and the expectation is that 50 percent or more of sales will be digitally enabled. This speaks to the speeding up of what access to information can do to a customer’s journey and the need to rethink the role of SAM.
The challenge is to reframe the role of SAM away from the classic end-to-end sales funnel – lead generation to close of contract and staying on top of servicing that contract – and to think of the SAM’s role instead wholly in terms of being in the customer’s shoes. When you do this, you begin to think about a much more pervasive relationship with the customer, which leads the SAM and the SAM’s team to take on more of a marketing role earlier in the journey, where they are the personification of the brand and the experience for the customer and its decision makers. So you’re starting always with whatever the customer’s trigger is, which may be as obvious as “I’m in the middle of a contract and deliveries are late,” or “I have a need for increased volume” or “There’s an issue with products that are off spec.” Reframe what you do as a SAM to help not only solve the problem but also reshape the expectation for the next time the customer is researching suppliers for the next RFP process. It takes you out of the world of “I’m solving a post-sales servicing need” into a world of “I’m servicing a pre-sales need and sharing new information, resetting an expectation of what customers should think about as they begin their next journey for their next purchase.”
One of the secrets of sales success, to be out in front of your customer physically as much as you can, is not true anymore.
When you begin to think more from the customer’s viewpoint, this can also help you think about where to deploy your team resources most effectively. Ask yourself, “Is this a time when it makes more sense to let our marketing organization work its magic and to devote our time elsewhere? Or is this a time when nothing but our personal interaction will do?” Of course, a negotiation prior to the actual buy is one of those times where personal interaction is necessary.
3. The world is multichannel 24/7.
How do individual senior executives with their strengths, insights and capabilities exist in a world that is multichannel 24/7? The interactions customers are having with you are happening in other channels. Getting used to the new equilibrium of the role of the personal SAM, versus what it used to be in a world where access to other channels was a lot tougher, means you have to up your game in terms of orchestrating and shaping those journeys for the customer and, in some cases, suggesting there’s a better way for them to interact versus talking to you.
Figure 1 shows a real customer mapping of interactions across multiple channels resulting in a low customer satisfaction score for this B2B buyer. The company was trying to understand the pathways a customer takes through all of the offered channels that were creating bottlenecks and unpleasant experiences in the customer’s journey—and what the company could do to improve. When looked at from a strategic account perspective, it’s magnified because this is not a one-time transaction; these are multiple interactions over long periods of time. In its research, McKinsey asked customers about their interaction experiences. It was found that even at the strategic level, almost 60 percent said they are frustrated with inconsistent experiences with their suppliers, not just their channels but the actual people behind those channels. The average B2B customer engages with an organization via six different interaction channels. That’s a lot of opportunity for frustrated customers, but it’s also a lot of opportunity for delighted customers.
So when a SAM helps a strategic customer think about the best way to use the channels, explaining when one channel works better than another for a particular customer need, the SAM is then managing the conversation and creating a more pleasant experience for the customer, outside the craziness of a buy, a negotiation or putting the finishing touches on a contract. This is what should make the job of a SAM fun: when the SAM works with customers along their journeys to figure out what works best for them.
Too much face time
What else can SAMs do differently? What do B2B customers cite as the most destructive account management behavior? “Not rapidly responsive” feels like the right answer. However, the actual answer is this: too much face time. When senior people in an organization are asked what is the most frustrating thing a SAM can do, the reply is often spending too much face time with them. This is not to say they don’t value the insight; it’s just that the world that SAMs lived in for a very long time, where you’ve worked out of this paradigm that one of the secrets of sales success was to be out in front of the customer as much as you can, is not true anymore. Customers are saying they don’t like it, they don’t need it and they don’t want it. And that’s because they have so many other ways of interacting with you.
So think through your account plans and how you mobilize your team to ensure you get rapid response, that you have enough engagement after the deal has been inked, that your people are really sharp on the features and benefits and all of that. And figure out how you can do all of this by making use of digital platforms in addition to face time so that the customer experience isn’t one of “Stop bugging me for times for meetings.” Instead, they are calling YOU for times for those meetings. Make yourself more desirable for face-to-face time rather than assuming it’s the most important thing to the customer.
How much face time is too much?
Sixty to 70 percent has been thrown out as a number to aspire to. Customers surveyed by McKinsey say to cut that in half. The ideal is probably somewhere in between, around 40 to 50 percent. This doesn’t mean it’s not revenue-generating time or customer-engagement time. If you think about time on digital platforms, response time and activities with other decision makers or influencers in a customer’s organization, these would be included as well. Don’t drop your revenue-generating time to 40 or 50 percent; rather, challenge yourself and ask if the face time you’re spending is really time that’s worthwhile. Of course, the appropriate amount of face time depends on what your customers like and how they like to engage.
Some final thoughts
1. Use big data to your advantage.
You have the right to demand this from your organization. You need to know some things about your customers that are more forward looking, more granular.
2. Share your pitch.
This doesn’t mean pitch in a typical sales sense, rather whatever you are bringing to your customers to help propel them forward in their journey. This could be a proposal or access to people from your organization, such as when you’re having a voice-of-the-customer discussion. Any time you have an opportunity to help your customer engage and learn something more about your organization, that’s a pitch. Think of yourselves less as account managers and more as community facilitators. How are you present on social media and other platforms so that you are regularly connecting to customers and regularly helping them get educated on new offers? How are you selling them on your offering before an official RFP? Are you really seen as an expert in your space? Many firms have rules for what their employees can and cannot do and say online or in in-person industry forums, such as trade shows. However, many don’t have ways to help SAMs live by those rules and still be effective. The concept here is that you’re sharing your benefits all along the customer’s decision journey and being seen as that community facilitator.
3. Manage the multi-channel decision
Every touch point represents an opportunity for a different type of customer experience and a different outcome for their next purchase. So it’s very important for you and your team to understand what is happening at different touch points in the journey so that you can continue to shape the conversation.
4. Challenge your thinking.
If you think of a SAM as a community facilitator, expert networker, someone at the center of a customer’s world, then you have to think about your offering in a very different way. It’s then not about selling product, not about capital expenditures, not about adding on a service – rather, it’s moving to a world that’s more of a platform consisting of products, services and information exchange. It’s enabling sharing, whether equipment or information. It becomes an environment where you, the SAM, are at the heart of juggling many balls to create a fundamentally different experience that the customer can only get via the platform of interactions, experiences, products and services that your organization has to offer.
The trends are clear; the data is clear; the direction is unavoidable. The key is to adapt now and plan to continue adapting later. Perhaps you’re not adapting as fast as you and your customers can benefit. Have a conversation with your teams about what these megatrends mean for all of you and your organization. You really can’t afford not to.
Want to learn more about trends affecting strategic account management? Check out this short video from SAMA’s 2017 Annual Conference.
1. Spend more time thinking or executing on those higher-value activities with the client
This is where the give-to-get technique comes in. Think through your client needs. What aspects of your expertise are they missing? Where do they need to think about a new way of doing something? Where would they benefit from a new service you offer? What things should they be thinking about in six months that they aren’t thinking about now? With the give-to-get approach, you’re not trying to get married on the first date. Instead, you’re figuring out the next fun date you can go on. This has a much higher chance of acceptance and takes most of the pressure off you and your team. Once you’ve answered these questions, think about this: What two-hour working session could an expert from your company lead for the client – without extra charge – that would accomplish the following three things?
It’s relatively easy for you to prepare for and conduct the session.
The client would find it valuable and would be excited about it.
It would expose the client to the need for further exploration of the concept, thus leading to the next step.
Don’t focus on selling something to the client. Instead, worry about how you can be helpful to them.
If you do that, you’ll add value and create goodwill. And if the give-to-get idea is strong enough, you’ll elevate your relationships by getting higher-level clients involved with the meeting. For most of our clients’ industries, the give-to-get will lead to what we call a paid selling effort, i.e., a pilot or “test” rollout. The give-to-get concept should be designed to lead to the paid selling effort. And if the pilot goes well, the client will typically want to hire you for the entire additional solution, i.e., whatever your “Big Project” is.
Examples of Great Give-to-Gets:
Great give-to-gets vary by industry and service offering, but here are a few we’ve seen work very effectively:
Monthly new-idea meetings. Setting up monthly meetings geared toward the needs of the client and the ideas you want to expose them to, and including experts from your company, can set up what one of our clients calls “an annuity of goodwill.”
Training on a hot topic. Picking an area of expertise that your client wants to learn about that also creates exposure to new needs you can fulfill can be an awesome give-to-get. Billing the meeting as “training” can let you invite a larger number of people and elevate your relationships to higher levels.
No-cost analysis. Offering a detailed, technical analysis of a new process, service or strategic approach is a great way to help the client better understand what can and can’t be done with a new approach. Those who hold data have power and helping your client understand a complex financial scenario (with your data) can be very beneficial and can get the attention of those above your day-to-day contacts.
Networking. Introducing your client to people they’d like to meet can be a great give-to-get. It’s especially effective when you can introduce a client that is considering one of your service offerings to another client that is a raving fan of that service. Then, the prospective client will learn from the other client’s experiences, and they are likely to jointly talk about their success with the offering. Everyone wins in different ways.
Strategy setting. One of our large healthcare clients is rolling out a no charge strategy-setting process to their benefits department clients. This is especially helpful to the clients because they would typically have to pay hundreds of thousands of dollars for this process if they hired a major consulting firm. It’s helpful to the healthcare company because they can have a direct relationship with the decision makers and bypass the typical benefits-consultant community. By facilitating the strategy, the healthcare company will learn the needs and direction of their main buyer in a much deeper and more intimate way. This puts them in the driver’s seat to create demand.
Benchmarking. Another great give-to-get is benchmarking. We’ve had several clients collect data across their client base and play that data back to the clients that participated in the process. This activity positions SAMs as expert advisors. Helping the client understand the data can lead to all kinds of interesting discussions and demand-creation.”
2. Convey to the customer that there is a lot more opportunity for both of you than just buy-sell transactions.
Both sides have all sorts of different needs, priorities and stakeholders, each with different perspectives and expertise that need to be brought to the table. So the question becomes, how do we as the SAM and the SRM [Supplier Relationship Manager] come together to get the alignment in each of our organizations such that we’re working together more as strategic partners than as a vendor selling stuff to a customer who’s simply making a transactional purchase?
Set up a cadence for account management
What we’ve seen some of the best and most mature SAMs do is figure out a way to set up a cadence for their account management, though contract negotiations might be happening on an annual basis. What they’re doing is performing regular joint business reviews that don’t just look at their own individual supplier performance – i.e., “How well are we doing delivering what we agreed on?” – but look in a multifaceted way at how they’re delivering on the strategic objectives they had for this relationship; how they’re delivering the expected value; and how they’re doing in creating the kind of relationship together that enables the transfer of that value back and forth in an efficient and an effective sort of way.
These mature SAM organizations are demonstrating tremendous value through regular business reviews, and when negotiation time comes, there are no questions about the value they’ve provided. It’s about, “How can we deliver more of it?” And then they use that momentum to drive a level of joint business planning with the account and to jointly find more opportunities for collaborative innovation. Organizing in this way, and creating this sort of cadence activity, makes driving customer-supplier collaboration a systematic process rather than simply ad hoc one-offs.
3. When a sourcing department is acting as a gatekeeper, address the root cause of a customer’s resistance.
Sometimes you run into a procurement organization – and it’s usually a less sophisticated, less enlightened one – that sees its role as that of a gatekeeper. You could try to work around that group, though doing so carries its own risks and, ultimately, that is not the best approach. And realistically, you may indeed have some customers that are just not ready, willing or able to engage in a strategic partnership – at least not right now.
But often, when a SAM perceives that a sourcing department is acting as a gatekeeper, the sourcing people feel they’re guarding against what their supplier is trying to do. They say, “They’re talking about all the value they’re going to deliver, but they’re not willing to be held accountable.” A lot of times, that resistance on the customer side is, at root, a lack of trust between parties. And if that’s the case, you need to address the root cause. If there is initial resistance, it may have more to do with how they’ve felt taken advantage of in the past.
Don’t give up or get defensive. If you are really confident in your value proposition, put your money where your mouth is. Explore with your customer what kinds of KPIs and commercial terms you might jointly define and implement to increase their confidence that you can and will deliver the value that you’re promising.
You’re an account management pro, so you know every day should be about getting to know your customers. But if you’re running low on ideas to keep them talking, here are some tips:
Use social media to get to know more about your customer. Encourage them to post on your page and follow, like and post on theirs. Share company pictures. Consider giveaways, polls and contests to keep the dialog going, and make sure you share the results.
Host an event or open house. If you have a physical location, invite your customer for a tour and lunch. If everything you do is web-based, host a fun, interactive webinar and pay close attention to the questions so you can identify and address their pain points.
Bring them with you to an appropriate conference. If your customer’s company crosses over into your industry or if you share a similar title, consider bringing them along to an industry event. For example, if your customer is responsible for selling your product to their end users, they too would benefit from SAMA’s Annual Conference next month.
Reach out after closing a sale to see if they have any questions or need help with the purchase. This extra step after the sale shows you care about more than just the profit.
Mine your website for valuable data. By integrating Google Analytics into your website, you can see which words and phrases are bringing your customers to your site and which content is useful to them.
Use your blog. Feature a client of the month. Beyond sharing why they buy from you, interviewing them yourself can help nudge your relationship into friendlier territory.
Integrate a customer satisfaction survey. An unbiased survey can be a valuable ally. It shows you care and their opinions matter to you.
Take a look around their office. Ask about the grandkids in the pictures on their desk. You might discover a shared love for the sports team whose logo is on their coffee mug.
Ask questions. “Who buys your product?” and, “Why would a company purchase from you?” These questions help you identify areas your product line might expand into or partnerships you might be able to foster with your customer.
Send in your senior team. One of the best ways to get to know your customer is to meet them face-to-face. By having senior staff meet with clients to understand their issues, challenges, and requests, your organization as a whole will get a better idea of how to improve your processes and products or services.
Make it personal. Take time to send thank-you notes and, for exceptional service or professionalism, don’t hesitate to give a recommendation on LinkedIn or share your experience with your customer’s supervisor. Everyone appreciates an acknowledgment of a job well done.
If you are serious about cultivating an attitude of openness from the customer’s procurement and business managers, then you should commit to attending SAMA’s 53rd Annual Conference for more strategies. You’ll take away best practices and fresh ideas specifically around the topic of strategic account management. Download the brochure and register today!
The demands of a SAM role require a fair amount of self-confidence and drive, but what is not as well known is that SAMs have less confidence in their organization, in getting things done and equipping themselves to face uncertainty. This is one of the findings of a study of “Individual SAM Characteristics Influencing Customer-Supplier Value Realization” conducted by Value Innoruption Advisors and SAMA.
While this is a noteworthy discovery, SAM leadership and the C-level could especially benefit from noting the finding of the critical connections among firm performance, SAM personality traits and value management. “Having a formalized SAM process and robust operating guidelines show as strong elements of success for the financial performance of a firm, as measured by EBIT (earnings before interest and taxes) and sales growth.” The study revealed a negative correlation to financial performance when introducing flexibility into the process.
Considering the connection to sales growth and absolute EBIT performance, the study recommends that “SAM team leadership engage with their HR and talent development teams to include emotional intelligence into the SAM competency model.” It also notes that there are demographic differences in both emotional intelligence and personality traits that we should take into account, such as the finding that SAM professionals ‘plateau’ after three or four years of experience. “One size fits all is not a productive approach in the design and deployment of SAM processes and value management programs.”
The study also recommends that leaders focus on both individual and collective confidence levels. “Strategic account managers cannot feel like they are on their own lifting mountains. They have to feel part of a winning team that has strong belief systems and strong intention to win in the value and pricing management areas.”
Related to this, the study recommends that “Top executives in firms having a GAM/SAM organization should pay close attention to these results and work hand-in-hand with top SAM leadership. These top executives can act as strong champions for the SAM process and interact with SAM leadership to boost confidence levels.”
In addition to collaborative recommendations for top executives, the study encourages SAM leaders “to hold discussions with their marketing and pricing counterparts to establish new levels of collaboration among their teams so that they can holistically work on customer-value programs. The SAM team cannot be expected to design all value quantification and value capture tools and resources, and do this in a vacuum.”
The study also found that “The greatest drivers of value management capabilities reside in the back-end of the value management process and more specifically in the pricing realization and value capture steps.” In this regard, the study recommends balancing value management processes to include more focus, attention and resource allocation towards value quantification and value capture, including “the development of formal capabilities for both SAMs and SAM leadership via training, tool development, team interactions and process development.” It also recommends “having strong pricing discipline and focusing on preparation for pricing negotiation and management of pricing and value objections.”
Based on the overall findings of the study, SAM leaders are encouraged to “evaluate their overall programs to incorporate additional dimensions into both the value management process and their SAM competence models” and consider a value capability assessment.