Key insights from SAMA’s Annual Conference

Nicolas Zimmerman

Editor-in-chief

SAMA

As the largest conference in the world focused on the challenges and opportunities of strategic account management, SAMA’s Annual Conference is a goldmine for anyone who wants to know what’s on the minds of SAMs and the architects of SAM initiatives. Here are a few things I and my SAMA colleagues picked up in Orlando May 20-23.

Don’t fear the machines.

While as much as 85% of sales tasks could be automated by 2020, the key is to know which situations call for human interaction and which can be handled by computers. 3M Vice Chair and Executive Vice President H.C. Shin summed up the dynamic perfectly in his opening keynote:

“As society becomes more technology-driven, human judgment becomes MORE important — not less. In this era of AI and everything else, what we do on a day-to-day basis is more critical than ever.”

McKinsey & Co. Expert Partner Jennifer Stanley recommends embracing “the bots” for what they can do better and faster than us, things like data collection, data processing, setting appointments and predictable physical work. This frees up critical time for activities only a human can muster: thinking creatively, developing new offers leading and coaching your teams, boosting your social and emotional intelligence skills and more.

“We should embrace them for taking parts of our jobs that are less exciting…because it frees us up to do the one thing that is most interesting anyway: being more human with our customers.”

Speaking of which….

Customer-centricity starts at the top.

Everyone talks about putting the customer first, but how many can say just how much time they spend with their customers? For H.C. Shin, the customer-first mentality starts at the top. He calls his management style “trench leadership.” When he gets his calendar in June, the first thing he does is block off 50 percent of his time for customer meetings.

“People don’t listen to what you say as a leader,” Shin says. “They listen to what you DO as a leader.”

Disruption is scary, but isn’t doomsday…yet.

Says Shin: “There is no state of equilibrium. We either take advantage of this opportunity, or we will fall behind and risk disappearing.”

Disruption will continue to come from unexpected sources. Who would have thought 12 years ago that Wal-Mart’s biggest competitor would be an online bookseller? By 2030, more than half of global data will be the product of machines talking to machines. The most conservative estimates put the number of professions that will disappear at more than 50.

But more that 80% of the world’s data sits behind firewalls. Incumbents will lead the next wave of disruption, predicts IBM’s Shari Diaz, who oversees innovation, strategy and operations for Watson Supply Chain.

“They have the expertise. They have the lessons learned. And they have the data. If they can take that data, get the right technology platform to leverage it, they will win the next wave.”

Finding ways to make your “intangible” value tangible.

With everyone moving away from products, the race is on to differentiate beyond product/technological excellence. This brings to the forefront the value of quantifying your intangible value of your offerings.

According to Andreas Hinterhuber (of Hinterhuber & Partners) and Stephan Liozu (of French security company Thales Group), two of the world’s foremost experts on B2B pricing, suppliers do three general things for their customers: save them money, make them money, and provide risk reduction/peace of mind/emotional satisfaction.

It’s this last area that is the “Final Frontier” of value quantification — and also the hardest to get right. “Our theory,” says Liozu, “is everything can be quantified.” But how?

You have to translate “soft” factors like brand perception, trustworthiness, country of origin, risk of failure and security into tangible customer benefits. For example: Brand is intangible. But brand equity is tangible. You have to figure out what it’s worth to your customers and then be prepared to defend your price premium.

Or take risk: In cybersecurity, the cost of a breech is astronomical. If you can build probabilistic models showing the risk of failure, you put fear into the mind of your buyer that helps justify a price premium.

Your company’s intangible benefits can’t be treated as “tiebreakers” —  a soft benefit that may put you over the edge in a competitive deal. Says Hinterhuber: “By treating intangibles as ‘tiebreakers,’ you defeat the purpose. They have and should have a value in and of themselves.

And here are a few more quick bites from the rest of the SAMA team.

  • “Innovate or die.” Of the 30 companies listed on the Dow Jones Index when 3M joined on Aug. 9, 1976, only five (including 3M) remain there today.
  • When everyone else zigs, you should zag. In the wake of the financial crisis of 2007-2008, the companies that invested in research came out way ahead of those who hunkered down and cut costs.
  • Opportunities exist at the intersection of huge technology changes and significant demographic shifts. How do you translate this equation into your industry?
  • Customers are looking for strategic suppliers who will share risk with them.

Feel like you missed out? Don’t worry: We have several training opportunities scheduled for 2018, and if you register now for our 2019 conferences you will benefit from our super-early bird pricing.

Denise Freier joins SAMA from IBM

Bernard Quancard, CEO and President of SAMA, announced the addition of Denise Freier as the new Chief Operating Officer of SAMA during SAMA’s Annual Conference.  Denise joins SAMA after more than 40 years of executive and sales leadership at IBM, serving as one of the executive leaders for one of the largest global transformation initiatives in the history of IBM – an undertaking that reimagined how IBM engages with its customers.  Building on her career in sales, sales operations and strategic account management, she most recently led IBM’s CRM implementation, where she was accountable for the design, deployment and adoption by more than 40,000 global sales and sales managers. Bernard highlighted Denise’s experience, noting that Denise “has been on the front lines for the twin revolutions of customer-centricity and now digital transformation.”

SAMA is delighted that Denise will bring her experience as a SAM practitioner and her familiarity with the SAMA community as a thought-leading presenter and long-standing SAMA member.  Denise will begin to take over the day-to-day direction of SAMA and, after a short transition period as COO, will become the next SAMA CEO. Her addition allows Bernard to focus more on his passions of developing leading-edge thought leadership and expanding SAMA in Europe as SAMA’s president emeritus.

“We evaluated more than 200 tremendous candidates for this SAMA position,” said Jim Ford, Chairman of SAMA’s Board of Directors. “After a long search, the Board’s Executive Committee unanimously agreed that Denise’s unique experience was the best choice. We believe that she can take SAMA to the next level.  Denise joining SAMA is addition without subtraction — an ideal transition that frees Bernard to focus on what he wants to do most.”

Five Tactics and Challenges SAMs Face … And What to Do About Them

By Jeff Cochran

Partner, Master Facilitator

Shapiro Negotiations Institute

We’ve all been involved in at least one high-pressure sales scenario, whether we’re the buyer or seller. Take the ubiquitous example of purchasing a used car:

“If you are ready to buy it today, I can offer it for as low as $24,999.”

You need a new car, but you also recognize your need to be the one in the driver’s seat, as it were. Maybe you think the price is a little steep, and you want to bring it down. What do you do?

You stall.

“This was a little more than I was expecting to spend.  I need to talk it over with my wife first.”

We rely on a tactic because we don’t like to be pressured and we want a better deal. It’s a common negotiating tool — one that we all encounter regularly, but one not all of us knows how to handle.

As a strategic account manager, you run into these sorts of stall campaigns all the time. Does any of this sound familiar?

Instead of a wife, it’s a boss. Instead of a dealership, it’s a rival company. Clients have an arsenal of tactics they use to try to get the most out of their account manager relationships. Let’s explore some of the most common:

The “Higher Authority” tactic

This is the classic shrug-your-shoulders, “it’s out of my hands” ploy. This tactic says, “I want to do business with you, but what can I do? My hands are tied.” It effectively transfers responsibility to an anonymous third party. It’s also one of the most common tactics strategic account managers encounter in daily business. Often, it’s a ploy to drive the price lower.

The “Should Cost” ploy

This is a common tactic and one of the most frustrating to navigate. Say you go to the store for office supplies and buy a stapler. The stapler rings up for $19. “That’s ridiculous,” you say. “This should only cost $12.”

It’s not something we think to do, is it? But it’s a ploy that strategic account managers run into regularly. This length of tubing “should” cost $12,500. These engine parts “should” cost $125,000. These filters “should” cost 79 cents.

If you have dealt with Procurement, then you have likely also dealt with “Should Cost.” These  days, other departments will use this tactic as well. The question is, “What can we, as SAMs, do about it?”

The “Taking Business to the Competition” threat

Ah, yes. The “I would love to continue working with you but your competitor is offering a much lower price” hurdle can be frustrating to navigate. Sometimes this is real and there really are competitors trying to win the business offering a competitive product or solution. But just as often, they actually do want to stay — but this threat is low-risk, high-reward for them.

Critical turnover

In this business, you’re only as good as the relationships you forge. Say you have a great working relationship with a decision maker – someone so good at her job that she earned a promotion or took an offer elsewhere. Now, all of a sudden you have a new client contact. This newbie doesn’t know how to justify costs to management and begins to question your product/solution at every turn.

Bringing in “The Big Guns”

Most SAMs’ response to dealing with Procurement is the same as the rest of us waking up on Monday morning: “Ugggghh. ” However, it is important to not see it this way. Working with Procurement has its pros and cons. While it may be harder to develop a relationship, it still can happen. It just needs to be approached differently.

Now you’re probably saying, “Yes! I can relate to all of these, but what do I do?!!?!” What follows is what we recommend, based on all of our years of training strategic account managers.

Generally, we recommend you consider the following three-step approach against any tactic:

1: Recognize the tactic. The first step in remedying a situation is realizing that it’s occurring in the first place. Learn how to recognize stall tactics when you see them. Are they appealing to a “higher authority?” Are they strategically creating more turnover? Whether it is on purpose or not, the first step is to be aware of it.

2: Respond effectively. These tactics only work if you let them. Take steps to defuse the situation. A response should take the form of engagement with the customer. You could try any of these responses:

“What is this ‘should cost’ based on?”

“Could we set up a meeting with you and your director so we can go through it together?”

“Before you transition into your new role, can we grab lunch with your successor?”

3. Redirect the conversation. Finally, take control of the negotiation and redirect your conversation to a safe place. If you get defensive or try to justify the price of your product or solution, you’re putting the client in the driver’s seat. Maintain control and steer the conversation back to your product/solution’s benefits. Alternatively, you could say, e.g., “The cost of the stapler is $19; tell me why it shouldn’t be.” Don’t give the client an opportunity to steer the negotiation for you.

In this case, this works for both “higher authority” and “should cost.”

Here is what we recommend when dealing with critical turnover at your customer:

Maintain consistency. Don’t think about the switch as starting over, but pick up right where you left off. Better yet, prevent this from happening in the first place by forging relationships company-wide, including with supervisors — even the C-Suite. As a SAM, your job is to forge relationships high, wide, and deep. Don’t bank on just one internal champion. It’s far too risky.

Here is what we recommend when dealing with the threat of taking business to the competition:

The “I can find a lower price elsewhere” hurdle can be frustrating to navigate. The solution: plant a seed with a well-placed question. The answer is less important than the other side having to think about it. Try these, for example:

“If you leave, what will happen to the proprietary technology we’ve built together?”

“Are you equipped to handle the burden of startup costs?”

“What would happen if the other company doesn’t deliver on its commitments? The lowest price doesn’t always mean the lowest cost.

Don’t get defensive, but do let the client know about the dangers of leaving. They spent months, even years, cultivating a relationship with you. They know you can deliver a high-quality product on time. Your support has been put to the test and passed with flying colors. Are they willing to throw it all away to save a few pennies per unit?

Here is what we recommend when faced with “the big guns” (i.e., Procurement):

Don’t view your relationship with a procurement specialist as a hurdle. View him as a potential ally. You should dedicate time and energy to befriending these procurement specialists and communicating your company’s values and account plans. You can use procurement specialists to build a rapport with customers, even if they don’t end up bidding on your project or product.

To sum up:

SAMs regularly face hurdles from strategic customers, whether it’s hard-nosed negotiating tactics or general bureaucratic messiness. Knowing how to approach these challenges will improve your customer relationships, establish rapport and ultimately lead to more business. It takes some practice, but if you enter your engagements with a plan in mind, you’re sure to see significant improvements in your outcomes.

Jeff Cochran is a partner and award-winning Master Facilitator at Shapiro Negotiations Institute. Over the last 15 years Jeff has trained and coached organizations in over 25 countries in the areas of sales, negotiation and influencing. Before SNI, Jeff was an account manager for Tessco Technologies and a Peace Corps volunteer in Nepal. If you enjoyed this post, come see Jeff speak in person at the SAMA Annual Conference May 21-23 in Orlando, Fla.

 

 

Accelerating customer decision making through rigorous business assessments

By Nicolas Zimmerman

Editor-in-chief

SAMA

At SAMA we hear it all the time: Customers expect more than ever from their strategic suppliers. They expect insights, they expect a distinct point of view, and they expect best practices gleaned from other customers. Most of all, they expect their strategic suppliers to help them solve actual business problems.

National Instruments, a global provider of testing and measurement software and hardware platforms, traditionally has functioned as a products company, which meant responding to customer challenges by helping them to achieve technical success through its testing packages. Responding to its customers’ evolving expectations, NI is learning to help its customers achieve business success by developing in-house tools and capabilities for conducting rigorous business assessments for its customers. They use these engagements to create alignment at the customer and accelerate decision making.

NI’s mission is to take the customer on a journey — first to agree on a “future state” vision and then to gain organizational consensus on a course of action and free up resources to execute on that vision.

When NI’s customers get stuck on their status quo, Deb says, it usually can be attributed to one of two factors: Either they didn’t build a strong enough business case for change, or the company failed to build internal consensus to focus on a particular problem at the expense of all the other problems it could seek to solve.

Before the engagement

Says Deb: “If you do not validate that the customer is ready to change and ready to execute, you can do a lot of good work and end up with a report that just gathers dust.”

That is why NI makes sure it has explicit customer buy-in from the beginning in the form of a formal memorandum of understanding, sponsorship on the customer side from someone at VP-level of above and a nominal upfront payment for National Instruments’ services.

What the customer brings to the engagement:

  • Highly confidential data that normally would not be available to suppliers
  • Access to the right people in the customer organization

What National Instruments brings to the engagement:

  • Industry best practices — common problem statements from best-in-class organizations and the high-level testing strategies they’ve used to overcome them
  • Sophisticated financial modeling capabilities, which they use to build a compelling business case

Building Internal Consensus through Business and Technology of Assessments

Research from Harvard Business Review shows that, in the past two years, the average number of entities involved in making complicated solutions purchases has jumped from a little more than five to nearly seven. This helps why so many “slam dunk” projects fail to gain the requisite internal consensus to move forward.

“Our starting challenge is the customer status quo,” Deb says. “If we can’t challenge the customer enough to change from that, this whole flow doesn’t work. They may go through this process and decide, for all sorts of reasons, that they’re not going to move forward. So our whole idea with these business impact engagements is to help the customer through this journey.”

They do this by conducting comprehensive business and technical assessments of the customer organization, which consist of six steps:

  • Assess testing organization. Because NI’s customers run the gamut from consumer electronics and heavy manufacturing to medical technology, the company is in possession of copious data on what best-in-class testing looks like. Using this stockpile of data, NI assesses its customer’s testing capabilities across five competencies ranging from the highly technical to the highly business-oriented.
  • Identify areas for improvement. NI grades its customer in each of the five competencies as “average,” “above average” or “below average.” The goal isn’t necessarily to be above average across the board but to identify how important each area is to the company and to use that to guide decisions on where to invest in improvement. The goal is allocate resources most efficiently for maximum impact.
  • Co-develop a test TCO model. NI creates a baseline model to show the customer its current distribution of costs. The idea is to open the customer’s eyes to the “hidden cost of the status quo,” Deb says. While customers usually have a very strong sense of their hard costs (e.g., material costs), they are often shocked to see how much “invisible” costs (like hardware and software development) impact their bottom line.
  • Quantified high-impact recommendations. Using the baseline model, the company’s current testing capabilities and the metrics that are most important to them, NI forward projects ROI and payback period for addressing certain areas.
  • Proposed multi-year plan. NI makes a set of recommendations for improvements, highlights the metrics they believe will be affected, and tries to quantify the risk of doing nothing.
  • Help build internal consensus. Even more than highlighting the benefits of moving forward, NI sees its role as lowering the customer’s perceived risk of a given project. Says Deb: “You may have the world’s greatest ROI project, but if the customer perceives there is tremendous risk associated, they will back off.”

NI has learned from its past mistakes and feels like it has fine-tuned a process for conducting its customer business assessments. A rough outline of NI’s process follows:

STEP 1: Business alignment at the VP level or above. Discussions are held with the leadership sponsor regarding alignment with the company’s business needs and signing a Memorandum of Understanding (MOU).This ensures NI will get access to the right people at the customer and the necessary data during the information-gathering phase. This also encourages commitment to execution on the back end

STEP 2: Kickoff engagement and onsite interviews. NI uses these interviews to understand the customer’s processes, how it uses its assets and how it makes investment decisions. It’s during this stage that NI makes sure its financial models are tailored to the client’s specific needs and goals.

Interviews last no more than an hour and are done with the fewest number of people possible. NI focuses on three levels of customer stakeholders: engineers and other “boots on the ground,” middle management and senior management responsible for mapping long-term strategy. NI pays special attention to the people up- and downstream from these key stakeholders, as it’s usually at these “handoff” points that Deb and his team see the most value gained or lost. “Most of the value creation we find is at these interfaces,” he says. “Within these blocks, most companies do a decent job. It’s in these ‘handoffs’ and interfaces where value is lost.”

STEP 3: Process maps and test TCO models creation. National Instruments develops process maps, showing the decision flow based on the interview and follow-up conversations, and builds factory and service center TCO models that identify needed data for input.

STEP 4: Acquire the right customer data needed to build out NI’s projection models. This is the most difficult step, but Deb says it may also be the most important. You can show a customer case studies all day, but unless you’re using the customer’s own data you are going to struggle to create the urgency needed to make the case for change.

Deb emphasizes that this stage of the engagement must be beneficial for both sides. In exchange for furnishing NI with the data it needs to populate its models, NI provides its customers with data insights. While some of the information the customer provides NI will be readily available, much of it is data the customer has never captured and, in many cases, doesn’t even know how to capture. Here, NI works with its customers to think through its knowledge gaps and how to build proxies to capture missing data.

STEP 5: Report preparation and executive debrief presentation. A formal report is prepared and the highlights presented to executives in a debriefing presentation, followed by discussion on follow-up execution. The deliverables include a report on the highlights of the interviews, a TCO financial model including ROI, a formal business report documenting insight and an executive-level summary.

But the business and technical assessments are just the beginning. While they free up budget and resources to start investing, customers still need help executing all the way through the end. If you over-promise and under-deliver, it may be the last co-creative engagement you have with this customer. But if you’re there until the end ensuring a successful execution, you will likely find yourself with a long-term strategic partner.
For a more in-depth treatment of NI’s award-winning process for conducting customer business assessments, see the forthcoming issue Velocity magazine.

Key insights from the floor at SAMA’s Pan-European Conference

By Bernard Quancard

President & CEO

SAMA

Plus ça change, plus c’est la même chose.

This French proverb (“The more things change, the more they stay the same”) has been perhaps overused, but it is interesting to note how much it applies to the best practices of strategic customer management. One thing I love about SAMA’s conferences, training events and leadership symposia is the dual focus on emerging trends impacting strategic account management and “evergreen” subjects that never lose their currency with strategic customer-centric organizations.

With that in mind, I offer you a few critical observations gleaned by my senior team and me during two days with the SAMA community at the SAMA Pan-European Conference 12-14 March in Berlin. These are in no particular order, and, like SAMA’s conferences, they contain a mix of old and new wisdom — and, hopefully, a little something for everyone.

  • Customers want their strategic suppliers to be more proactive in proposing solutions that address their big strategic challenges. In his opening keynote, Arcadis CEO Peter Oosterveer talked about personally visiting each of his company’s major strategic accounts when he came aboard — both to telegraph his personal commitment to his customers and to listen to what they had to say about doing business with Arcadis. In his keynote, he said he came away from those meetings with two main realizations: (1) Customers do not care one bit about their suppliers’ internal issues and organizational challenges; they just want them to follow through on their commitments and help them solve their own business challenges. And even more critically, (2) customers are eager for their strategic suppliers to more aggressively and proactively bring them solutions that create actual business value. If you, as a SAM, are waiting around for your customer to approach you with a problem, you risk missing out on opportunities to co-create value.
  • Despite having generally strong solutions, most companies report a sad inability to tell their story well enough to capture the imagination and spend of their customers or to accelerate the rate of the sales cycle.  The real issue is that companies’ messages are not structured in a way that the human brain wants and needs to consume information.  The ultimate standard for all communication is that it can be repeated. This makes sense when you consider that complex customer purchasing decisions are made by an average of 6.8 people from a range of functional areas, roles and geographies. This means a salesperson’s key customer contact must then retell the sales story to a network of other stakeholders in a concise and convincing way.  The majority of the time they can’t, resulting in long delays in getting a decision — or, worse, a deal that is dead on arrival due to the story’s lack of compelling clarity and clear benefit.
  • SAMs must learn how Procurement works and how they’re measured. Presenter David Atkinson of Four Pillars estimates that only 10 percent of sellers truly understand how to effectively work with Procurement. What makes this such a head-scratcher, according to Atkinson, is that Procurement’s toolbox hasn’t changed much over the years. Atkinson proposes that strategic suppliers should incorporate Procurement metrics into their account plans. If SAMs can communicate their value in a way that aligns with how those in Procurement are measured, then they will be better positioned to make their Procurement counterparts look good, which will help steer the conversation away from price and toward value.
  • When selling to the C-Suite, your messaging must be calibrated to each relevant stakeholder. Jacques Sciammas, who served in the C-suite at Charles Schwab, Berkshire and BankBoston, reminds us that every executive is measured differently and sees business decisions through his or her own prism. You can’t come in with a one-size-fits all message and expect to get the traction you need to be relevant to and resonate with each individual’s vision and measurements.
  • Most B2B companies are not truly customer-centric. According to Gallup, companies’ lack of customer-centricity is leading to a double whammy of anemic growth and customers’ migration to disruptors. And while SAMs are the primary keys to success of a SAM initiative, they can only be successful if they’re backed up by a strategic customer-centric organization. Based on extensive polling and interviews, Gallup found that fewer than 30 percent of companies are fully engaged in a true customer-centric approach. And where does the customer-centric approach need to originate? I would point you to my first takeaway: Just think about the signal it sends to customers when a strategic supplier’s chief executive sits down with the sole purpose of listening to his customer. If suppliers aren’t set up to enable the SAM, companies risk failing to attract and retain top talent and ultimately struggle to grow organically and to reap the benefits of well-intentioned leadership initiatives.
  • Suppliers are all at risk of having strategic customers leave you.  These are the top three reasons customers make a switch: (1) supplier is too difficult to work with, (2) supplier takes the relationship for granted, and (3) supplier doesn’t do an effective job monetizing its value. While many suppliers think they are engaged in strategic account management, many of them are stuck on the treadmill of managing deals. As a strategic supplier, you can’t give your customers any excuse to start weighing their options.
  • The importance of creating a coaching culture at your company can not be overstated. As I wrote above, the SAM is the fulcrum of the entire strategic account management effort, so attracting and retaining the best talent is a business imperative. Psychometric tests widely available today can help answer the questions every SAM leader should be asking: Does a potential SAM candidate have the requisite inherent makeup to become a great SAM? As a SAM coach, how do I know what areas to focus on developing for each individual on my team of SAMs to improve their long-term efficacy beyond just “deal coaching”? Other questions SAM leaders need to ask themselves: Should I coach my SAMs myself or hire outside coaches? (Either way works.) Should my coaches be certified? (Absolutely, yes.) And should I track and measure an individual’s growth and the ROI of the coaching effort? (Most definitely.)

The last thing I want to leave you with is from a conversation I had in Berlin with a very experienced SAM. When I asked him why he had taken the time out of his incredibly busy schedule to attend the Pan-European Conference, this is what he said: “I just got assigned to a new customer after having successfully developed my current customers for more than five years. I decided it was time to remind myself of the best and new SAM practices, versus relying on what I remember working in the past.”

Do you need to brush up on what the best are doing with their most strategic customers? Join SAMA for our 2018 Annual Conference May 21-23 in Orlando, Fla. Click her for more details.

 

Use design thinking to supercharge innovation and shoot for the moon

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.”

 

Engaging your customer ecosystem: Five rules to live by

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.

  1. 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.”
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Learn more here.

 

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.