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What’s Wrong With Strategic Accounts?

by David Brock on June 19th, 2011

We embrace our strategic accounts—they are our most important customers.  They may be our largest customers, perhaps they represent the thought leaders in the industry – helping us acquire more share within an industry.

We pay a lot of attention to our strategic account plans.  We have our annual strategic account planning sessions.  We look at what we are going to do with the account, how we are expanding our relationships, how we will grow the account, what resources we will commit, how we will develop new customer relationships.

In many organizations, our strategic accounts represent the majority of our revenue–they are the 20% that generate the 80%

Strategic accounts are important to us.

There’s one thing though, while the account may be strategic to us, are we a strategic supplier for our customer?

It seems we need to look at the other side of the coin—look at things from our customers’ perspectives.  Are we strategic suppliers to our customers?

What do we know about our customers supply chain strategies?  What do we know about what’s important to them — what they look for in a supplier, what they need in terms of long term and close relationships?  Do they even need long term relationships?  What important are we to the customer?  What would be the cost of switching vendors?  What would be the impact if we weren’t around?  If the switching cost is low, if the impact is small, then as much as we want them as a strategic account, we are unlikely to be a strategic supplier.

We care about the account, but does the account really care about us?

For an account to be strategic, importance — interdependency should be aligned.  We should be important to the customer and they should be important to us.

Are we also missing an opportunity?  Are there customers for whom we are strategic–but we may not be treating as strategic?  Are we selling to them, but missing the opportunity to ratchet up the relationship?

Strategic supplier relationships always trump strategic account relationships.

What do you know about your customers’ supplier management strategies?

How important are suppliers in their overall business strategies?

Who is important to them?  Why?

How do you become important – strategic – to your customer?

Maybe it’s time to rethink your strategic accounts.  Maybe it’s time to be focusing on being a strategic supplier?

(Thanks to Rick Pulito for the reminder on this concept.)

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  1. Thank you, Dave, for the mention and the pingback… So much focus is placed on internal resources and processes, and rightly so, that too often the equally critical level of understanding about how’s and why’s of the customer are compromised.

    It is equally confusing to me why so many supplier partners seek to avoid building relationships within procurement or purchasing units. This misconception that the only thing purchasing depts care about is grinding down price is an old tape, long overdue for updating.

    Having worked with large accounts for over 25 years, I find that there is no such thing as a customer relationship that is not worth having. 99% of disconnects occur because of failed or inadequate communication.

    Thanks again, Dave. I will look forward to following you via subscription and to spending more time with your wonderful blog!

    All the best,
    Rick Pulito

    • Rick, thanks for the comment–I’m flattered to have you visit, I’m such a fan of your blog—-feel like a blubbering fan right now.

      The whole customer/supplier interaction is very interesting–I’ve written a lot about it, not just from the sales point of view. A couple of years ago, I think it was PWC conducted a CEO survey on top CEO priorities. 70% + cited developing better strategic partnerships with customers. About 40% said developing strategic partnerships with their suppliers. The 30%+ gap is intriguing. I think the supply chain is under valued in its role in helping to create value for customers. I’ll be writing a lot more in the coming month on this topic.

      As you point out, the general lack of knowledge among sales professionals about procurement is fascinating. Ask sales people, “how many books on procurement have you read, when’s the last time you went to a procurement conference to understand the driving issues/trends in procurement?” For trying to “understand our customers,” we are poorly prepared to understand the procurement function.

      Thanks so much for visiting. Look forward to your continued comments. Regards, Dave

  2. Tom Winstead permalink

    I am seeing multiple companies embrace a second level Pareto (the 80/20 of that first 20), and focusing on architectural strategies to box the customer in. With some of them, they’re doing it with a gusto that has forgotten the customer relationship, placing all of the value in the architecture and forgetting that there is more than one solution for the customer to choose (there always is). We’re in that sociopathic cycle in which some of the leadership out there really believe that relationships do not matter.

    • Thanks for the comment Tom. I’m not seeing the trend you mentioned–though I see some trying some very unnatural acts. Fortunately, most large customers are pretty adept at detecting these efforts–after all, we as sales people trained them. Those companies who are trying to do this, however, ultimately poison their relationships, lose share/revenue, and waste everyone’s time.

      Thanks for the comment.

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