For every sales organization there are very large accounts that require extensive company resources. Whether you call them “key, national or strategic accounts” does not matter. Loss of even a single important account would create a significant revenue or profit shortfall that would be difficult and time consuming to replace. For many sales executives, effective management and insulation of these strategic accounts is a vital factor in making or missing one’s sales goal.
Consequently, Strategic Account Plans (SAPs) for these key accounts draws interest from all levels of the selling organization. In turn, it is both a challenge and opportunity for the frontline sales and operational personnel charged with penetrating, pursuing and closing sales opportunities.
Consider the following eleven “best practices” for ensuring successful management of these important accounts. For simplicity we will refer to them as “key” accounts.
1. Select your key accounts carefully. Not every account can be a key account. The criteria must include the following:
a. They want to partner with you! It’s like dating. You may want the date but if the other party isn’t interested, the relationship is fatally flawed from the onset. Strategic account management is similar. They must want to partner with you. This means they exhibit a win-win philosophy and provide you access to information and key personnel within their organization without trying to hold you hostage with high maintenance and hardball price negotiations.
b. They are a priority for you! Is this account important enough to warrant your investment in improving your business relationship? This can be measured by revenue, profit, visibility, or the market leadership they provide today or could provide in the foreseeable future.
c. They can provide your organization significant value! Can they provide profitable revenue from new or existing products in your portfolio? Are they willing to provide references, testimonials or case studies? Is the contract long-term?
d. They perceive your organization as providing significant value! How does your product, service or solution enable vital initiatives for your customer’s organization? Can your organization provide leadership, project management or technical skills that are critical for your customer in the near future? Does your customer fully understand your organization’s capabilities?
2. Develop a cross-functional team. This is essential for key accounts. A single point of contact puts the account at risk if the Strategic Account Manager ever leaves your organization or your key supporter ever leaves the account. Cross-functional team members promote on-going communication, build a deeper understanding of the business, improve strategies and enhance collaboration. The key lies in building multiple “touch points” with the customer’s organization.
3. Develop executive sponsorship & commitment. Your senior executives must build peer-to-peer relationships with your key accounts at an agreed upon contact cadence. This shows “executive involvement” The Executive Sponsor must measure the account’s status on a regular basis and hold the Strategic Account Manager and his/her team accountable for progress and results. This allows them to prioritize and allocate the proper resources. When issues arise, your Executive Sponsor can serve as the “corporate unblocker.” They must demonstrate to the account team that they view each client’s success as a key indicator that their business plan is working.
4. Build mutual dependency. Make it difficult or costly for your customer to stop conducting business with you. Build into your business proposal some type of dependency that makes it more difficult to change vendors. This can be done in a variety of ways:
a. Contractual: The most common is an automatically renewable contract
b. Technological: Consumables that are tied to a piece of capital equipment. Think about how hard it is to remove and replace existing inventory, train personnel in new equipment etc.
c. Operational: Purchased services that would require removal and replacement of key personnel that have relationships within the institution.
d. Financial: Special pricing based on usage, favorable payment terms etc.
5. Understand the customers’ business. You cannot develop value-based solutions for a customer unless you understand their business. This is a fundamental requirement. For example, within healthcare you must understand the clinical, financial and operational aspects of their business if you are going to impact their business results in a positive way through revenue growth, cost savings, risk avoidance or productivity and process improvements.
6. Develop a collaborative plan. Good account plans are developed collaboratively with parties from both organizations contributing to its This creates buy-in and support for the plan and its long-term objectives. It ensures that it meets the needs of both parties. A bi-lateral plan also ensures that the right resources are available to drive the customer’s business.
7. Use agreed upon metrics. Throughout the account relationship you need leading, not lagging, performance indicators. As an example think about measuring the frequency of interactions between team members on both sides, the number of new executive sponsorships and the number of new business opportunities identified.
8. Assess customer loyalty. As your business relationship grows and matures you need a Customer Scorecard that includes client surveys. If you don’t have either of these tools jointly develop one with the client. Get their feedback and use it consistently. The results should be shared with the client team and the client. This will quickly become your relationship and performance scorecard.
9. Require periodic internal communication & accountability. While the Strategic Account Managers are the stewards of these accounts, they cannot function in a vacuum. They must provide and receive information continually from all client team members and they must be held accountable for business results.
10. Conduct timely account reviews. You should plan quarterly meetings (or more frequent if required by both parties) with the client and there should be a formal agenda to cover issues and plot changes. Ideally these meetings should occur at the client’s location so that they understand they are important to you. The agenda should focus on an updated business analysis and strategy, sales and support programs provided and the results achieved. The account team should provide documentation of instances where the sales organization has provided value and helped the client surmount challenges or achieve objectives.
11. Modify your account plan periodically. Every account plan needs to be updated periodically to correspond to changes in your customer’s Most markets are changing rapidly. Your account plan needs to adapt as you strive to meet the changing demands of your account.
Parting Thoughts
Within every selling organization strategic accounts are corporate assets. Also, these accounts are more likely to embrace leading edge strategies with their suppliers, initiate new products and services and be more forgiving when unexpected problems arise.
If you manage them carefully they can help you sustain long-term growth and profitability.
