Having spent over 20 years working in strategic accounts in many different emerging industries, I’ve learned much about what makes a profitable strategic account. I would love to tell you that it’s the outstanding strategic thinking sales leader who ensures that key accounts continue to grow and thrive over time.
Sometimes this is true, but having spent the last several years with many of these great strategic account leaders I’ve discovered that to excel in strategic account management, you need to be very entrepreneurial in how your grow this part of your business.
You also need strong financial analysis capabilities on your strategic account team. They come in handy when dealing with the strong financial component a growing strategic account requires. I cannot tell you how many times I have gone into a strategic account meeting to be met by a client’s controller or CFO. When it first happened, I thought it was my reputation as a good host. I quickly discovered that this part of the customer’s leadership team took their job very seriously, and if I hoped to keep expanding our role in their organization, I might need a little help understanding the many numbers they choose to use to try to lower my price on the products and services they were buying from me.
One of the major changes I’ve seen over the past several years is clients continue to learn how to use technology in ways that couldn’t be imagined even three years ago. Big data and business dashboards have made it easier for clients to squeeze their suppliers’ profits. To make matters worse, many of these financial professionals have no problem playing hardball with suppliers they see as a commodity.
You may be thinking my product or service isn’t a commodity, we are the most innovative company in our industry. We’ve saved our customers millions of dollars over the past several years and they really appreciate it. I have news for you; while they appreciate what you’ve done, they are being pressured by their customers to decrease more cost every year. So guess who is recruited to lower prices?
So what can you do to offset this negotiating gambit? I suggest you get to know the financial side of your strategic account more closely. In many of my best clients, I’m suggesting they send their strategic account managers back for an MBA. As you can imagine this idea is not met with applause in many of the meetings I’m attending. I then fall back to having a strong financial leader involved in my clients’ strategic account teams.
Depending on the size of the organization, I might ask several questions about how they currently track strategic account profitability. Most of these teams have 1 or 2 metrics they use. I then share five that have been shared with me over the years. This helps me open a wider discussion about the future of strategic accounts in their overall growth strategy. I believe the nature of strategic accounts is changing, and if organizations want to continue growing, they will be well served to consider their many options in managing a key client.
Here are my thoughts on this; good strategic account managers are very good at running their strategic accounts the way they would lead a successful business. I don’t believe you can run a successful organization without knowing your financial numbers inside and out. The good news is that once you set up the dashboard for your key account business, it can be used on most, if not all, of your best clients with minor changes.
If you hope to protect and increase margins in your strategic accounts you will need to add several new capabilities on your team. This doesn’t mean that you don’t have to be good at the more traditional parts of your strategic account managers role, you still do.
Next week, we share the qualities the best strategic account leaders have in common. I also begin to share different ways of structuring these key accounts teams so they are providing profitable organic growth to your business over the short and longer term.
See you next week.