Over 50% of CEOs interviewed are unhappy with the results they get from their strategic / key account programs. Talk with your best clients and they can tell you they expected more when they decided to choose a primary supplier to partner with as a key account. How can both sides of the partnership be so disappointed in their key account programs?
Healthy partnerships take work, but how do you decide who work with to build a stronger partnership? How do you choose the best clients and customers for your key account programs? The better you become at choosing your partners, the better your results will be.
When I do key account audits with clients, I start by looking at the compatibility of the partners involved. I focus on what I’ve learned from many key account programs around world that have been successful. They all share common traits and strategies. Not surprisingly, my personal findings have been confirmed by research from many leading universities around the world. In my career, I’ve worked with over hundred key account programs across many industries and markets both as a buyer and key account leader. My largest key account program was over 60 million dollars in revenue and my smallest 2 million in annual sales.
If the two companies are not aligned at how they look at business, there is little chance of a success, no matter who leads your efforts. It’s a myth that a great leader can overcome any obstacle to success. The best leaders work with the organization’s strengths, capabilities, and people then align them to find the best clients for their business.
So how do you evaluate your potential key account clients? I have a six step process I use to help my clients decide if a customer is a strong candidate for a key account management program. This process is designed specifically for mid-market organizations. I’ve seen large organizations survive a bad key account, but in most situations a bad selection for a midmarket business can do permanent damage to their key account program
The first question to consider is how defined is the business to whom you are selling? Do they know what they do? How well do they define their markets? The clearer your customer is at what they do, the better you will be at providing a breakthrough relationship.
I have bad news; most bad clients are bad because they are unclear at what they do. It will be very hard to create significant value if you have to hit a moving target. Don’t believe me, take a look at what clients you struggle working with the most. I would bet over 90% it’s because they lack a clear vison of what they provide to their customers.
The second question is what market are they in and what is that market’s buying behavior? The time you invest in this question helps you understand how and what you need to do to help create significant value to your clients. If you’re customer is working in a commodity based market, odds are they treat all their suppliers as a commodity. If the client is in a contracting industry, it will be very difficult to expand your sales with them. They will always be looking for a better price.
When the margins erode in low margin industries, so does their attractiveness to the best talent. Your key accounts should have the best talent you can find in their markets. Typically, you find one or two organizations in an industry that have figured out the industry’s value proposition and have stronger margins. Invest more time there and the quality of your key accounts will improve.
How much do you know about their competition? Before choosing key accounts, invest significant time analyzing their competition. What are their key strengths and vulnerabilities? Can your product or services provide your key account an edge in the market? Global markets provide increasing competition, but give a good organization an edge. You may be surprised how often they win the deal and continue to grow. By choosing to work and partner with market leaders, your business continues to grow.
We’ve talked a lot about knowing more about you key accounts and why it’s important to your organization’s growth and prosperity. You may also notice that most of this information you can learn before engaging in the key account program with a client. The more discerning you are in your selection process, the stronger your results are.
Do a quick test; begin asking these questions with you key account teams. You’ll uncover some amazing information that will help you work better with your key accounts.
Next Thursday, we’ll give you two more questions to consider as you decide who should be in your key account programs. I will also share a quick test to see if the client is ready to work with your key account program people. See you here.