Account Strategies, How Important Are We To The Customer?
Account Based Everything has been the rage of the past couple of years. The principles of ABE are outstanding–focused on further tailoring and personalization of our marketing and sales approaches to the specific needs and priorities of the customer–both the enterprise and individual (actually these are great principles for any customer outreach).
Inevitably, we start putting these accounts into our account programs: Major Accounts, Key Accounts, Strategic Accounts, Corporate Accounts, Global Strategic Accounts, Super Duper Really Humongous Very Special Accounts (OK, I invented that one).
We do these things because the customer is important to us. We want to retain the revenue we have, we want to grow the revenue, we want to build a long term “partnership” with the customer.
We build special programs to treat these customers specially. We share these programs with our customer, “We’ve made you a part of our Super Duper Really Humongous Very Special Account Program! We will be treating you specially, as part of this program, so you can buy more stuff from us.”
Having been on the customer side when presented this special privilege (sometimes, there’s a special coffee cup or some other thing involved), my immediate reaction has usually fallen into one of two categories:
“Oh, so that means you will be giving us a bigger discount! Tell me how much it is, is it retroactive?”
or more frequently, “So what, I’m not sure I care…….”
The problem with many of our ABE strategies is we do these special things because the customer is very important to us. However, we fail to look at it from the customer point of view, “How important are we to them?”
I was speaking about this recently to an EVP of Sales for a very large company. He laughed, telling me of a “vendor executive” coming in to explain the importance of their special ABE program. He told the vendor, “Thank you, but it doesn’t mean much to us. You are actually our third source for these products and get less than 10% of our spend in this area. Our primary vendor gets 70% of our spend and we invest a lot of time in that partnership.” As you might expect, the vendor executive was dumbfounded, he didn’t even have the quick wits to ask how he might get more share of the business and become more important.
What would happen if we turned our ABE strategies on their heads? What if instead of focusing on how important the customer is to us, we started asking ourselves the questions, “How important are we to the customer? How can we become more important to the customer?”
Customers don’t tend to care about how much they spend on us or even how much more they could spend on us, or even our share/potential share of the account. They care about the value we create for them.
So what would happen, if we started focusing our ABE programs on those customers where we can create distinctive value that is very important to them?
Some obvious questions arise:
Doesn’t this favor very large companies? Perhaps large companies have a greater portion of a customer’s spending because of the breadth of their product lines, the resources they can deploy, the sheer magnitude of what a customer might be spending on the large company. But if we focus on the value we create, we might be able to command attention far greater than the size of our company might indicate.
For example, recently, I was working with a small-medium client. They had competitors several 10 times their size, but were focused on expanding their relationship with an industry giant (My client was about $100M, their customer was about $75B, their competitors were $500-2B. But they identified opportunities that would drive several hundred million in growth for the company. They had identified things the company could do, opportunities they were missing. The CEO and I were invited into the office of the customer’s CFO. He was intensely interested in the opportunity we had identified and how they could realize the opportunity. The CFO wondered, out loud, why their larger suppliers had never approached them with the idea, even though they were spending far more money on those suppliers. At the end of our meeting, the CFO asked my client, “Would you be willing to be our strategic partner in this initiative?”
Through deep understanding of the industry, markets, and their customer, this small company had identified opportunities that were extemely important to the top executives of their customer–more importantly, their larger competitors hadn’t done this. My client became very important to the customer, creating a relationship that would drive revenue far beyond their expectations.
Perhaps you can’t do something that impactful (I tend to think too many organizations sell themselves short). Perhaps you can’t be important to the SuperDuper Really Humongous enterprise. Perhaps, instead, you can become very important to a function, a group of people, or set of divisions within the enterprise. Perhaps we understand them so deeply and we create such value to them, that we become critical or strategic do them. We become so important they choose to become one of our key accounts.
You’re probably starting to get the point. Perhaps, we have ABE backwards.
Perhaps rather than choosing accounts based on how important they are to us, perhaps we get accounts to choose us because of how important we are to them.
What would happen to our relationships if we focused on that, instead?
For a free peek at Sales Manager Survival Guide, click the picture or link. You’ll get the Table of Contents, Foreword, and 2 free Chapters. Free Sample