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Keeping the business
Keeping the Business
In these difficult times it’s vital to defend your key accounts. Steve Newman gives his top ten tips for safeguarding your most valued customers
1 Have an open account management process that works. If it’s not visible and people are not accountable, mistakes will be made.
2 Alongside your deal-making mindset, develop an implementation mindset, because an account strategy must look beyond the next deal. Too often we focus on what to charge to keep a key customer happy. Nowadays, the customer thinks that means extra discount. It’s no bad thing to remind them that what they are buying is not just a product for a price, but a relationship. That’s the difference between a big customer that gets a discount based on volume and a key account. The latter is buying your partnership and collaboration in helping them improve their business.
3 Impose on everyone, not just the sales team, that if they have contact with people in the account – whether they’re in finance, technical support, customer service, contracts, manufacturing or operations – what they do impacts on the relationship.
4 As well as selling your features, benefits and competitive advantages to your customer, for effective relationship management it is vital to have a good understanding of your customer’s business, the major trends affecting them, the opportunities for them (not you) generated by the trends, the strengths you have as a supplier to help them address their challenges, and your vulnerabilities (because you can’t be all things to all people).
5 For years, salespeople have chosen their key accounts. Or have they? They might be a key account to you, but do they recognise you as a key supplier, or better still, as a business partner? It’s worth asking yourself: is it you, the customer or both of you who actually determines the key account status of the relationship?
6 It’s vital to keep track of the cost of the relationship. A low-level commodity relationship is not much more than: “We’ll give you more business if you give us more discount.” Is that a key account relationship or a negotiation? In IT and professional services, customers are getting very good at saying: “We see you as a key supplier. If you want to join our Tier 1 supplier group, demonstrate you are worth it by giving us X days of free consulting every year.” What is your investment in the relationship really costing?
7 When it comes to forecasting, the board traditionally promises shareholders X% growth. The increased sales and profit expectations are given to the sales teams. The leaders of these teams carve up the required targets among the team and assumptions are made about targeting for the next year. So, why have an account strategy? What happens if you are depending on one of your biggest accounts to give you a major project this year and it gets shelved? A good account relationship should shed new light earlier on future business and make for better sales forecasting.
8 Key accounts expect a certain standard of service. They do not want approaches from unknown people and they expect departments inside the selling organisation to know what’s going on. Ensure rules are in place to make this happen.
9 The ultimate validation of an account development strategy is if you can show it to your customer. A strong account strategy is one you are happy to share with them because it shows a vision and a path to get there.
10 What would you rather propose to them: “Buy 100 and you will get an extra 10% off this time,” or: “If we can collaborate in this way, we can support your business in future to really help you grow?”