Why has the pandemic devastated some companies while lifting others? According to University of Miami Herbert Business School Marketing Prof. Arun Sharma, it’s all about “liquidity.”
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Category: Strategic account management program organization
Systems and processes that support and enable the SAM in the creation of long-term, mutual value with strategic customers.
By Danielle Matteson, Director, Global Accounts, AVI-SPL
Editors note: The following case story earned AVI-SPL a 2019 SAMA Excellence Award for “Implementation of a disciplined process to quantify and monetize specific customer value solutions.” Author Danielle Matteson is also a recent graduate of SAMA’s Certified Strategic Account Manager (CSAM) program.
Founded in 1979, AVI-SPL is the leading digital workplace services provider for organizations, with more than 2,500 employees worldwide. For more than 10 years, we’ve partnered with a prominent financial institution for audio-visual system integration and post-implementation production support services. Before the AVI-SPL global accounts management program launched in 2018, the global team at this financial institution relied on a combination of several different technology partners, including AVI-SPL, to deploy and support their infrastructure, meeting space technologies and user communities.
The infrastructure and meeting space technology investments of this financial institution are focused in two spend categories: real estate project implementation and support services. While AVI-SPL had delivered significant proven value in support services, the relationship and engagement had been limited to North America. This institution’s support services in both the Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC) regions had been consistently delivered through smaller, in-region providers.
The challenge
At the time, AVI-SPL had suffered implementation challenges in North America with this customer, resulting in inconsistent performance vis-à-vis the customer’s internal KPIs, namely on-time delivery, meeting budget requirements, and global end-user experience and adoption. These challenges may have been preventing AVI-SPL from pursuing global growth opportunities, possibly inhibiting the opportunity for account penetration with line-of-business expansion and, most importantly, threatening to undermine the proven value achieved elsewhere.
With this, we needed to organize properly around local, regional, national and global project implementation performance. While we achieved successes in some regional markets, our global delivery process for this client lagged. We needed to take action to correct course.
At the time, this financial institution was challenged with global scalability, efficiencies and overall standards governance of its technology environments. As it deployed collaboration and meeting space applications to a broader community of users in several regions of the world, it increasingly struggled with establishing a sustainable and economical end-user support model. Additionally, its diverse list of global vendors yielded unmanageable variances in design, pricing, quality, serviceability, user experience and technology standards.
For example, one vendor in APAC would deploy a series of meeting spaces with technology and workflows specific to that APAC vendor. Meanwhile, another vendor in EMEA would deploy a completely different design and application in the EMEA meeting spaces. The net result was that when users traveled or moved from one region to another, they were completely unfamiliar with the technology in each room, resulting in poor user experience, lost productivity and a higher volume of support cases opened.
This left the customer’s support team unable to support the environment and user by quickly resolving issues, thanks to their unfamiliarity with the technology in a given room. Without a consistent global standard or playbook from which to work, the business would be operating inefficiently. These challenges resulted in low user adoption — one of the customer’s most critical KPIs. These variances and resulting challenges ultimately translated into intolerable risks for the lead customer stakeholders, as well as the entire end-user community, i.e., the financial institution’s employee base of more than 200,000 people. We knew that the key to success would be to find a way to increase the efficiency and scalability of our end-user support model, which we hoped would simultaneously reduce the customer’s global vendor-related risks while scaling spend for services overall.
In short, the root of our business challenge was two-fold:
- How do we bolster a prominent customer’s confidence in our project implementation business and deliver the outcomes they expect consistently on a global basis, and…
- How do we leverage our past proven value with our support service performance to deliver economies of scale for the customer’s operating budget while benefiting from expanded wallet share?
This customer candidly shared its desire for a more consistent approach from a single audiovisual and unified communications provider that could achieve better employee collaboration outcomes at an accelerated pace. With this knowledge, as well as an overall awareness of the client’s global enterprise customers’ needs, we designated the client as a launch client in our global accounts management program in January 2018.
Strategizing
Our first step to solving this client’s business challenges was to organize and facilitate a series of disciplined strategy sessions with the key customer stakeholders, which included executive support, the global technology services organization, internal owners of meeting space technologies and the customer’s global operations. In order to demonstrate our commitment to increasing this client’s confidence, we assembled cross-functional teams of AVI-SPL resources to participate in these sessions.
Our first goal here was to tackle the challenge of project implementation consistency. We worked together with our client to uncover how we could enhance performance, understand the impact of past shortcomings on their business and KPIs, and articulate what success would look like for them with respect to their quantified KPI goals. We also facilitated structured discussions to explore the customer’s macroeconomic and industry drivers, how they affect its user-experience objectives and, ultimately, how those objectives are measured. Our findings from these sessions helped us identify and prioritize a mutually beneficial partnership roadmap.
In order to monetize the value of improving our project implementation performance, we organized a programmatic approach to consolidating their spend and services, which provided scale and efficiencies. This, along with incentives for growing global spend, was established as part of the overall (and exclusive) benefit to this customer as part of the GAM program.
The overall result, we hoped, would be growth and share-of-project implementation business coming our way while simultaneously allowing the customer to scale its overall OPEX spend though global service consolidation. The end result would save the client on capital and operating costs while improving global end-user experience. Meanwhile, we would see an increased share of the client spend, both for implementation and production support around the world.
The plan
Next, we co-created a plan to realize efficiencies through vendor consolidation, automation and service operations enhancements. For example, we identified the customer’s largest support service cost as full-time support employees, who came from several vendors around the world and many of whom were underutilized through disparate processes.
Next, we reviewed the options for automating several key support functions, including proactive monitoring, issue identification and resolution, which would require less full-time equivalent support. We were able to quantify the resulting productivity increase and then show the resulting impact on the company’s bottom line. With the implementation of automation and supplier consolidation, the customer reduced its OPEX spend by approximately five percent in 2018, with a projected annualized reduction moving forward of more than seven percent.
By combining these two initiatives, we enabled the client to realize the maximum benefit by consolidating its spend with a single global partner, allowing them to realize a controlled, scalable cost-structure, with clear accountability to performance and measurable outcomes.
In summary, we worked directly with the customer to value engineer a two-pronged strategic approach:
- Consolidate all the financial institution’s OPEX (support services) spend, which would yield cost savings as well as increase the value delivered by AVI-SPL due to improved efficiencies, automation, scalability, serviceability and, ultimately, an overall lower total cost of ownership for technology and infrastructure
- Increase CAPEX (project implementation) spend with AVI-SPL through standards and global accountability and pricing consistency.
The results
This engagement transformation project has yielded quantified results for both the client and AVI-SPL, namely:
For the customer, the program has resulted in project implementation cost savings of approximately 15 percent for 2018 as compared to the previous year. Moving forward, the annual CAPEX cost savings for the customer is projected to be 22 percent. With the implementation of automation and supplier consolidation, the customer realized approximately 5 percent cost reduction in associated OPEX in 2018, with a projected go-forward annualized reduction of approximately 7 percent.
For us, the most significant outcome has been the shift in our relationship with this critical customer, moving from a vendor/solutions provider to a trusted advisor and strategic business partner. After implementation, we became the first ever global single-source supplier in the audio visual/collaboration space in this customer’s history, with the customer labeling us as an “IBM-like partner” moving forward.
We have been able to quantify the net relationship change through our strategic account benchmarking methodology, which scores an account in five categories: (1) account attractiveness, (2) value, (3) alignment, (4) relationships and (5) growth. Each category has three statements that are then scored on a scale of one to five, with one representing “very unfavorable position” and five representing “very favorable position.”
The customer’s post-implementation assessment increased the overall benchmarking score by a dramatic 10 percent, with the highest net increases coming in the following areas:
- Alignment: AVI-SPL’s competitive position with the customer (i.e., “mindshare”)
- Relationships: Trust-based relationships have been established with the customer
- Growth: New opportunities for account expansion
- Value: The customer views AVI-SPL as strategic to its business
As a result of our strengthened relationship, AVI-SPL also realized significant financial growth with this customer. In 2018, through Q3 (September 30th), our year-to-date top-line bookings with this client jumped 346 percent year-over-year. We also engaged Forrester Research to help us quantify the total economic impact of our digital workspace solutions for the inaugural 12 customers in our GAM program. The result, from Forrester: a total cost of ownership savings of $5.5 million and a monetized productivity increase of $11.9 million.
In our GAM program’s inaugural year, we have seen significant growth in spend across all customers, and we attribute the success and progress so far to our commitment to a disciplined program methodology. The program offers strategic and tactical benefits, ensuring that the latest technology and industry best practices are adopted.
Overall, the GAM program has exceeded our expectations by positioning the business to deliver an accountable and consistent global approach for planning and project implementation. By strategically aligning with our client for planning and roadmap design and enabling the “client-way” team communication and planning, we have definitively enhanced customer experience, improved business outcomes and created additional value for our clients and ourselves.
By Harvey Dunham, Managing Director for Business Development, SAMA
By stirring the Board to force B2B companies’ CEOs to reduce the cost of their companies’ centralized functions, activist investors are unwittingly putting their most strategic customer relationships — and their colossal lifetime value — at significant risk.
In my role as Managing Director of Business Development for SAMA, I’m talking to customers every single day. And lately, I have received at least a half-dozen first-hand reports from our Corporate Member companies who have succumbed — or are actively resisting pressure from — their Boards to move their strategic account management programs out of their company’s central function organization and into either a business unit or region.
I won’t “name names,” but these include some of the world’s most venerated, recognizable companies. In all cases, activist investors are cited as the root cause and drive. The justification? To reduce costs by eliminating a handful of SAM program key roles in an effort to reduce costs and give shareholders a short-term profit lift.
Doing so is short-sighted, wrong-headed and flat-out self-defeating. Here’s why.
When done right, SAM programs work. SAMA research over the past two decades has shown, again and again, that a well-funded, well-executed strategic account management approach produces 2X growth (compared to a traditional approach), 10 percent higher margins and significantly improved customer satisfaction.
A SAM approach is required to sell innovation. According to research by Thomas Steenburgh and Michael Ahearne published in Harvard Business Review, senior leaders of companies express confidence in their ability to develop innovations but not in their ability to commercialize them. After studying more than 2,500 salespeople, those who effectively practice strategic account management dramatically outperform others in selling new products, services and solutions. The authors site SAM’s focus on balancing short- medium- and long-term growth in the service of helping their strategic customers achieve stronger business results — not just short-term sales growth.
Customers demand the ease-of-doing-business offered by strategic account management. Large and strategic customers do not want to deal with their suppliers’ internal complexity. They demand a single point of contact from their strategic suppliers who are
- Responsible and accountable for the entire relationship, including all of their company’s products, services, solutions and innovations — at all of the customer’s geographic locations
- Tied directly to the supplier’s senior leadership.
- Focused on helping them (i.e., the customer) become a better company
- Willing to organize their own company to achieve this outcome
And it’s not just this. Our current uncertainty about how much longer global economic growth will continue, how global political unrest will affect the future, and the threat of new disruptors in every industry leads to another sobering (yet often forgotten) reality: A supplier’s best chance of surviving the next recession DEPENDS on its largest, best managed and most loyal customers!
Note that the top 10 percent of a supplier’s customers produce more than 80 percent of a company’s customer lifetime value! Couple this fact with SAMA research showing that a SAM program, on average, saves at least one strategic customer per year thanks to the high, wide and deep relationships good SAMs cultivate. Clearly, your ability to weather the next economic and/or political storm will depend on a handful of strategic customers.
Given all this, our advice is clear.
To CEOs: Resist all activist investor pressure to send your SAM program back to your regions or business units. You would be much better served by putting your strategic accounts at the center of your strategy as your best insurance policy to ride through the next macro-economic crisis.
To SAM program leaders: Help your CEO by making the clear and undeniable business case for SAM.
To strategic account managers: Aspire to be exceptional in the eyes of your customers! As we know, top-performing SAMs are three times as likely as average ones to produce exceptional growth, profitability and customer satisfaction.