ECOLAB’S CORPORATE ACCOUNTS PHILOSOPHY

By Nicolas Zimmerman, Editor-in-Chief

SAMA

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.

 

 

 

Beating procurement at its own game

By David Chapnick, Michael Kalikow and Liz Rayer

Vantage Partners

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.

Conclusion

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.