By Dominique Côté, Owner and Founder, Cosawi and Principal, The Summit Group and Kate Burda Owner and Founder, Kate & Co. and Principal, The Summit Group
With customer integration increasing, it creates additional complexity to build trustworthy relationships and partnerships. SAMs’ own organizations are evolving and often centralizing, adding more to the SAM’s plate not only in terms of skill set but also number of accounts, expectations for growth and required competencies.
SAMs are being stretched thin, from both a customer and internal perspective. Today’s SAM really does feel like she/he needs superpowers to do the job.
We are living in a world of skyrocketing complexity and information overload, and one of the key pressure points that we see is the increased complexity and diversity of types of customer problems suppliers are asked to solve.
Facing more complex and broader issues, SAMs have no choice but to engage differently to differentiate themselves.
Living as we do in a world overloaded with data, we increasingly look to technology to help us deliver valuable, relevant customer hindsight, insight and foresight. But to do so requires better data management, including a mastery of how disparate data sources connect and communicate in order to translate this information into relevant customer insight and foresight.
As the closest person to the customer and the owner of the customer-supplier relationship, is the SAM or KAM alone with all of the demands wrought by the new economy? Hardly. Every superhero needs a partner, and the very best SAMs know when and how to bring the best people to the table to ideate, innovate and create impact for their customers.
By Saleh Al-Ben Saleh, Strategic Account Manager, Emerson
Expediting “inside” knowledge of your strategic account(s) is vital to realizing indisputable value for both you and your customer. Human interactions are invaluable to gaining this knowledge, but issues of location, time and logistics make accelerating these interactions a common challenge for SAMs.
Here I present a tactical approach that covers best practices showing human interactions success for one strategic account site, taking into consideration the following three key metrics likely to contribute to successfully accelerating human interactions (and, thus, inside knowledge) at a selected strategic account site:
Interaction time with individual strategic account client(s) during a single day visit
Relationships built/strengthened, quality of information gathered, initiatives/opportunities realized
The number of potential touches created for future visits
Before getting started, let’s look at four facts we need to accept in order to understand the value of the approach I call “Once you’re in…you’re in.”
Strategic accounts often have multiple scattered facilities, yet you only have eight hours per day to spend on a customer visit. So you should spend that time wisely, and by wisely I mean on valuable client touches.
While most clients claim to have open arms to meet and explore business-related issues, the reality is that priority takes precedence, and planning for meetings is a time-consuming task for all parties.
Even with a solid agenda, it will be difficult to facilitate several formal meetings on the same day at the same location.
Unplanned, stand-up meetings can be just as important as well-prepared meetings — if they are executed in the right way, with the right talking points and objectives in hand.
Putting all the above points into the context of expediting “inside” knowledge of the client, we can agree that SAMs would be wise to leverage any planned customer meeting to generate additional valuable but unplanned meetings during a single customer site visit. Picture yourself jumping from one purposeful interaction to the next, all day long in the same place. This is the main reason I have chosen to call this this approach “Once you’re in…you’re in.”
It’s not that hard. On a typical customer visit, we probably have at least one scheduled meeting of between 30 minutes and two hours, out of a total of seven hours (the typical daily window for meetings). The challenge is to see how much of these seven hours we can use to create human interactions. I propose that the answer is “all of them” – if you prepare well, remain alert and act quickly.
The following six-step methodology has worked for me in my career as a SAM.
#1. Start with the “T.” The “T” stands for “them” in the “TUFA” concept, a process for building on your existing target customer profile or creating one if none exists. The “U” stands for us, “F” for fit and “A” for action. Your customer profile should include all information on your history with the customer, including past performance, ongoing initiatives, an organizational chart and a social chart. Make sure to compile a list of all gaps in your customer profile. All this intelligence should be written and organized in a way that will help you drive fruitful conversations with the targeted account clients. Pro tip: Make sure to use open-ended questions to allow more talking space for your clients.
#2. One planned meeting to get in. If you are calling on an established customer, start from the end and follow up on a hot topic(s) with your assigned focal point. If it is a new customer, you may need several exploratory meetings to identify the right people with whom to interface. In either case, once you have secured your meeting, you should be able to develop others for mutual benefit.
#3. Jump to the unplanned meeting. Through the profile you have developed in step one, and/or through your scheduled meeting(s) from step two, updates, initiatives and challenges will present themselves to you in one form or another. Whenever possible, seek to learn the champions of these items and ask to meet them while you are onsite. Most likely, you will be able to track them down for short, fruitful, stand-up meetings. Repeat this as many times as your schedule allows. After each interaction with a new champion, make sure always to exchange contact information, which you will need to schedule follow-up meetings.
#4. Think client and “walk the talk.” Eventually, a picture will emerge, and the potential for the next meeting will follow accordingly. Clients will frequently use three evaluation tools to decide whether or not they want to continue developing a relationship or not:
How much you understand the business from the client perspective
How well you can build mutually agreed-upon action plans for both sides
How fast you are able to “walk the talk,” deliver as promised and follow up on other commitments as well
#5. Enhance the “T.” Make sure the gathered information in steps two, three and four are reflected on the profile you created in step one. Having an updated profile will allow you to see the big picture clearly, plan your next visit and identify the people you want to interface with either through planned or “spontaneous” meetings.
#6. Do the loop. Now start again from step one and move through the process again.
Once you capture the value from undertaking this process, you can draw imaginary lines between the steps, create additional steps and add “sub-steps” as needed. I think of this as a best-practice template, which I encourage you to adapt to best fit your circumstances.
When trying to expedite constructive human interactions within your strategic account clients, you must endeavor to find the “sweet spot” between formality and informality. If your process is overly formal, you risk missing out on potential customer touch points and slowing progress. If your process is overly informal, you may get more customer touches, but your conversations will be less constructive and new relationships much less “sticky.”
The goal is to have as many meetings as possible in a single day, continually leveraging the information gained from past interactions to garner new ones. When executed to perfection, you will move from unplanned meeting to unplanned meeting. Success is never guaranteed, but based on my experience, this approach will give you the best chance of expanding your customer footprint over the long haul.
In part 1of this series, we talked about the benefits of creating financially quantified value propositions, shared a self-assessment to determine your organization’s maturity in this critical realm, defined the concept of “added value” and briefly shared a six-step process for creating financially quantified value propositions. This installment spells out how to translate your strategic account analysis into a financially quantified value proposition.
At the end of the previous post, we introduced a six-step value propositions process. Here it is again, in case you missed it.
Provided you have done all the work of steps one through three (“Define target market,” “Identify buyers” and “Added value analysis”), you are now ready to financially quantify your value proposition. Now we are glad to offer you our unique proprietary summary of all the foregoing.
The following table summarizes all the analysis referred to above except Porter’s Value Chain, and it represents a major part of step four (i.e., “Financial quantification”) above.
Next, we bring you thesingle most important figure in this post, because it summarizes everything we have said about how to develop financially quantified value propositions for strategic accounts as a result of Porter’s Value Chain analysis. This also plays a major part of step four of the process outlined above.
The following graphic shows what a summary might look like as a result of going through the process outlined above:
The penultimate step
Before presenting your financially-quantified value proposition to your customer, there is, however, one further piece of work to be done: You will need to classify it according to the structure below. This corresponds to step five (“Categorize”) in the six-step value proposition process above.
The reason for this is that not all financially quantified value propositions have the same immediate value, and so if you are able to categorize and present them like this, you will stand a much better chance of being listened to and, more importantly, understood. All that remains now is step six (“Communication to target customers/markets”), which will be the topic of a future blog post.
The final piece
This is not the place to go into lengthy and complex explanations of return on investment (ROI), internal rate of return (IRR), net present value (NPV) and payback, but particularly for more sophisticated customers it is necessary to calculate the financial return on what are frequently substantial sums invested in purchasing goods and services
Some customers are interested only in payback over a 12-month period. Others are looking at return on investment over a longer timeframe. Each method attempts to summarize a set of cash flows from a project into a single indicator. Each has its intended purpose, and each has its strengths and weaknesses — so it is prudent to be prepared to present your case taking into account the particular interests of the customer. Incidentally, we offer tailored software to make such calculations easier.
As we said earlier, there is obviously a lot more detail involved in going through the six-step process shown in the first figure in this post, and it requires substantial effort and skills on the part of the supplier — which leads us to one final point:
Strategic account managers and senior salespeople today need business acumen to demonstrate the value they can bring to the customer and the financial literacy to support it.
To do this, they need not just product knowledge but insights gleaned from industry knowledge and from a deep understanding of the customer’s business.
Agree on and apply an approach to creating joint solutions that leverage the enterprise resources, capabilities, enablers and strengths of each organization
Collaboratively engage in structured ideation and brainstorming to identify “beyond-the-product/-service” enablers and generate potential solutions
Screen solutions and enablers for inclusion, exclusion or further development considering their relevance, impact and feasibility
Align, engage, and commit relevant resources to develop the prioritized solution(s)
Value engineer to optimize the solution for impact and differentiation considering solution components and enablers that can be added, eliminated, elevated or reduced
Prototype and test the solution with emphasis on agile development — testing early and failing fast, at the lowest cost
At the outcome of this phase, both organizations have co-created a joint solution relevant to the prioritized opportunity and have agreed to move ahead to build and validate the business case, communicate compelling value and to pilot and then implement the solution, joint initiative or new business model.
Our proposed approach for creating joint solutions starts with a prioritized customer “CareAbout,” aligns relevant products and services, and integrates enterprise capabilities beyond the core product/service that impact what the customer and/or end-user cares about most.
Central to successfully creating joint solutions is the ability of each organization to leverage its enterprise-wide capabilities. Value enablers are defined as any asset, capability, company strength or resource beyond the core product or service offering. While the idea of drawing on relevant cross-business, enterprise resources to co-create solutions with strategic customers sounds logical, fundamental and simple, in our experience it’s not always easy — and not common practice.
For many co-creation initiatives, this is where the “rubber meets the road”: when the joint solutions team engages and requests relevant resources, beyond the product, from across the business. To facilitate access to solution enablers and support their integration into new, “beyond-the-product” offerings, we suggest the following:
Ensure executive-level support and communication of the “grander why,” i.e., why creating value with strategic. customers is central to your company’s strategy and success
Engage and align the “critical crowd,” i.e., relevant internal stakeholders — early in the process — well before you make a specific request to invest their time and resources.
Build a comprehensive list and categorize enabling capabilities around core value themes such as reducing cost, improving efficiencies, growing revenue and elevating the customer experience.
Identify customer and company gaps in capabilities, i.e., value enablers, that are missing yet critical to co-creating value. Determine if these are capabilities you can build, buy or source from elsewhere.
Identify and engage “owners” of key value enablers using the customer’s voice to articulate why these capabilities/resources are important, the impact on the customer’s business, the value to the company, the cost of inaction, the joint solutions roadmap and “what matters next.”
Leverage relevant enablers to co-create solutions using structured brainstorming and creative design thinking to generate concepts and potential solutions.
Move forward to prototype, test and refine your solution.
Communicate value and drive execution
In this phase, the company and customer:
Develop their business case and compelling customer value proposition
Establish and execute their plan to deploy the joint solution/initiative
Agree on a governance framework, project plan, scorecard and review cadence to drive joint initiatives forward, faster
Reflect to capture lessons learned, build on what’s working, and assess opportunities to adjust strategy and scale solutions
Quantifying and communicating compelling, differentiating value to key stakeholders within the customer’s organization, and to the customer’s customer, is fundamental and essential to the practice of co-creating value.
Ultimately, if the value of your solution is not recognized, believed in and accounted for, your company will not be able to capture and realize the value co-created in the joint solutions process.
Value propositions are a well-established, yet often poorly practiced, concept in sales and marketing. Through research we’ve established that fewer than 10 percent of customers see their suppliers “creating real value, and being worthy of a long-term strategic relationship.” As one customer commented on their supplier’s value proposition, “This sounds like brochure-speak.”
We need to ask ourselves the question, “Why do value propositions seldom resonate?” Based on our research and work with clients, we’ve established that when compelling value propositions DO resonate, it is because they:
Focus on what matters most to the customer
Clearly articulate the differentiating value of your solution compared to the best alternative
Are quantified in the customer’s currency
Provide evidence of impact and proof of your company’s ability to deliver
We suggest a simple value creation framework to collaboratively develop your compelling, relevant, quantified and differentiating value propositions. The framework provides a non-prescriptive structure for communicating thought and enables authentic articulation of your joint solution’s impact on the customer’s top “CareAbouts.” This framework, structured around four words — them, us,fit and proof — assures relevance and resonance by aligning what you bring (i.e., your solution) with the customer’s major needs and priorities.
Them: What do they care about? We need to truly understand what our customers care about. What
keeps them up at night? What are their key issues and concerns? What is important to them? How
are they measured, paid, and rewarded?
Us: What do we have? Here’s where you articulate relevant products, services, and value enablers. What pertinent capabilities and assets can you bring, beyond and/or wrapped around core products and services?
Fit: How does what you have impact what’s important to the customer and customer’s customer? Quantify and describe the impact of your solution on the key issues, concerns and value drivers of your customer and customer’s customer. Articulate your solution’s difference compared to the next best alternative.
Proof: Prove it! Provide the examples and evidence of the value you will bring and demonstrate
proof that you can deliver and execute.
Applying this framework guides us to create, articulate and quantify customer-centric value propositions that resonate and enable the company and customer to realize value created through the joint solutions process.
Like what you’ve just read and want learn more? The Summit Group facilitates SAMA Academy’s CORE 2 workshop, “Co-creation and quantification of value.” Click here to learn more about SAMA Academy, to see a list of upcoming workshops and to register.
This isthe final installment of a three-part series. Read parts one and two.
This is the first post of a series exploring why financially quantified value propositions are critical for success with strategic and key accounts.
The crucial importance of money to customers
Even a cursory glance at the SKF pricing example shown below illustrates the dramatic impact that is possible as a result of preparing financially quantified value propositions. (SKF is the global engineering group that specializes in ball bearings and assemblies.)
Our definition of a value proposition is “the translation of the supplier’s offers into monetary terms that demonstrate their contribution to the customer’s profitability.” The key phrase here is “customer profitability,” because if you can prove that dealing with you will make your customer richer, they will buy from you.
In the first post in this series, we examined how market disruption, changing buyer behaviors and other factors are rendering traditional sources of growth – like internal research and development of products and services, pricing, and branding – inadequate. To grow profitably in today’s business market, companies have no choice but to engage with their customers and partners to co-create new sources of value by deepening insights, aligning goals, developing joint solutions, leveraging mutual capabilities and executing together.
By Phil Styrlund and James Robertson, The Summit Group
This is part one of a three-part series. Parts two and three are available here and here.
Persistent, disruptive forces impacting profitable growth are intensifying and, as a result, companies in many industries face slower growth and accelerating commoditization of product and service margins.
Given marketplace complexity and dynamic shifts in how customers buy, traditional business models are threatened, and new strategies and capabilities for driving growth must be more intentionally developed. In this series of posts, we will outline a pragmatic yet powerful framework for co-creating solutions with strategic customers.