Whether you’re struggling to survive the pandemic or thriving and experiencing unprecedented growth, one thing is clear: We are experiencing radical shifts in how we conduct business with our most strategic customers. As conveners of the largest community in the world dedicated to strategic and key account management, one of SAMA’s foundational purposes is to help our community both adapt to what’s happening right now and prepare for what may happen next.
At the 2020 SAMA Annual Conference (held virtually Nov. 9-11, 2020), we pulled together a group of the smartest, most sophisticated observers, students and practitioners of strategic account management for a conversation on “The Future of SAM.” Highlights are presented below, and the full panel is available on demand by registering for the virtual conference here.
Moderator: Jim Ford, Chief Commercial Officer, Solecta, and Chairman, SAMA Board of Directors
Panelists: Jennifer Stanley, Partner, McKinsey & Co.; Dino Bertani, Executive Director, International Strategic Account Management, Allergan Aesthetics; Harvey Dunham, Managing Director, Strategy and Marketing, SAMA; Tom Hablitzel, Senior VP, Enterprise Clients, Sherwin-Williams Company; Jim O’Leary, Global Practice Chair, Corporate Affairs, Edelman
#1. Shifting from focus on shareholder value only to stakeholder value as well – and a broadening understanding of what stakeholder value means.
O’Leary shared takeaways from Edelman’s most recent Business Roundtable, which highlighted the growing emphasis placed on a company’s role in society – from environmental impact to social justice and diversity/inclusion. Non-traditional sources of value will play a growing role in how stakeholders evaluate the impact of companies and their strategic accounts efforts.
#2. Sales and account management – no longer an expense but an investment.
While firms once viewed sales as an expense, in this environment it’s clearly an investment. O’Leary’s advice: Projects with the best “story” will be funded and resourced first. His other advice:
Expand whom you interact with at your customers
Focus more than ever on active listening. Only by making astute observations will you uncover potential new sources of value.
Make sure your internal stakeholders understand the value your program brings to customers and, through them, to the firm. If they don’t grasp it, you may become the target of cost cutting and/or restructuring.
#3. Centralized beats decentralized.
When companies shift their programs into the regions or business units, Bertani says, you risk adding inefficiencies, redundancies and opportunities for misalignment. You also risk sacrificing a common strategy, methodology and customer experience.
#4. SAM will become (if it isn’t already) the standard bearer for all sales.
From Stanley’s perspective, SAM already serves as a beacon for what it means to be a sales professional–particularly when it comes to the rigor SAMs bring to account planning, solutions co-creation with customers and articulation of unique value propositions.
#5. Centers of Excellence (CoE).
Bertani says these centralized groups of SAM experts can and should be leveraged as the catalyst for instilling the mindset, skill set and processes for distinctive go-to-market and customer-centric engagement models.
#6. Agility is the new stability.
In disruptive times, leaders need to increase their organizations’ agility by focusing on what really matters and making much faster decisions. Bertani recommends trading perfection for simplicity. “I’d rather be approximately right,” he says, “than exactly wrong.”
#7. Those who have the data, and use it wisely, will control the playing field.
If you’re accumulating data on your customers and even your customers’ customers, how are you using it to develop insights that lead to innovative value propositions? How are you linking it to your core business strategy?
#8. In just a few months, COVID accelerated digital adoption as much as 10 years.
What this means is a vast proliferation of data on customer behavior. Those companies that both control the data and utilize it most effectively to glean customer insights will be the ones who will control the playing field. Stanley predicts that digital adoption will spare SAMs from much of the day-to-day “firefighting” of the job, freeing them to look into all this new data and distill it back into insights about their customers.
#9. The profile of strategic account teams will shift dramatically.
New and different skills will be needed to analyze all this new data and make use of it, leading to teams that include not only data scientists but also behavioral scientists and others with non-traditional sales skills. Teams will also need to become flatter, less hierarchical, in order to move quickly and with agility.
#10. Customers will reward suppliers who successfully blend a great digital experience with the human touch.
When McKinsey surveyed B2B buyers to see whether they prefer to buy digitally or from people, the answer, overwhelmingly, was “it depends.” Turns out customers are much more likely to reward suppliers with sole-source contracts when they excel in both areas and know which channel is right for which kinds of interactions.
Want more? A recording of the discussion, more than two-dozen breakout sessions and keynote presentations is available for unlimited, on-demand purchase. See what you missed here.
SteveMustard is the president and CEO of National Automation, Inc., a company that supplies automation products and services to customers in water & wastewater, oil & gas, transport, electricity and manufacturing. He is also the president-elect of the International Society of Automation (ISA), a non-profit professional association that provides standards-based technical training, publications, events, and resources for engineers, technicians, and management working in industrial automation.
In December, news broke of a major compromise of U.S. federal government and Fortune 500 companies who used software from a network-management software vendor called SolarWinds. The incident arose from a SolarWinds software update that contained malicious code. Users who applied the update from March 2020 onward would have been exposed to the vulnerability, potentially allowing attackers to gain access inside their networks. It is estimated that 18,000 users applied the update. As of January 2021, the full extent of the breach remains unknown.
This incident should cause genuine concern to all SAMA members. In my earlier conversation with Harvey, we discussed the fact that safe and secure products and services are crucial to strategic account relationships. We also talked about how hackers will target the weakest link in the supply chain. Here is a very real example with very real consequences. SolarWinds is now involved in a massive recovery effort, both technically and with its credibility. However, they are unlikely to be the last major vendor to be the focal point of such an incident.
Vendors will learn from this incident and address any known gaps that they have, but the next incident will be different and will leverage previously unknown gaps. The most serious threat to any SAMA member is complacency. Cybersecurity management is a continuous process requiring constant vigilance and dedication. SAMA members should constantly review their exposure to cybersecurity risks, with a focus on answering these key questions:
• How well do we protect our systems, intellectual property and other sensitive information? How would we have been affected had the latest incident hit us?
• Do we have effective processes for reviewing and updating who has access to our systems and information as well as the methods for doing so?
• How secure is our supply chain? How confident are we that we don’t have weak links in our chain?
• How well prepared are we if a cybersecurity incident were to occur? Do we know what we would do and whom we would contact? Does our incident-response plan cover our entire supply chain?
• How secure are our strategic accounts? Do we provide them with the necessary guidance, and are we helping them manage their cybersecurity risks?
One closing thought: The focus ought not to be on SolarWinds themselves but rather on the fact that attackers will look to exploit the weakest link in the supply chain.
Harvey Dunham: It’s my pleasure to be speaking with an expert from the International Society for Automation, Steve Mustard, who’s an expert in cybersecurity. Steve, welcome. It’s great to be speaking with you, and I look forward to the conversation we’re about to have.
Steve Mustard: Thank you, Harvey. I’m very happy to be here. I’m very happy to discuss cybersecurity with your members.
HD: And Steve, would you just give a brief introduction about yourself so they know a little bit about your background and how you earned your stripes in the cybersecurity world?
SM: Sure. I’ve worked in industrial automation and real-time embedded systems for 30 years, space defense and then energy and utility companies. In the last 12, 15 years, cybersecurity has become a big issue in industrial control systems. And as a result of my background, I’ve gotten heavily involved in that side of life, and I’ve spent a lot of my time these days consulting with asset owners about how to improve their cybersecurity posture in their mission-critical facilities.
Ulrik Monberg has nearly 20 years of experience in selling and delivering complex digital transformation projects to large international enterprises. He has held various positions in management consulting companies in Scandinavia and the Middle East and is the co-founder of Arpedio, the Danish software firm (and SAMA global technology partner) that helps B2B companies grow their customer relationships and manage complex sales.
Harvey Dunham is Managing Director for Strategy for the Strategic Account Management Association.
Harvey Dunham: So good day, everyone. My name is Harvey Dunham from SAMA. I’m the managing director of marketing and strategy for SAMA and really delighted today to have with us all Ulrik Monberg, who’s the CEO of Arpedio, a company based in Denmark that builds tools, basically, to be able to manage a strategic account and really understand the relationship and manage the relationships with those accounts.
And there’s been a lot of questions and a lot of discussion in the SAMA community about relationship management, the importance of relationship mapping and how to do it. And I thought it would be great to get the perspective of someone who’s built a tool to enable that. And Ulrik comes into this role with many years of management consultancy before he started up his own company and knows large accounts and the complexity of large accounts and has come up with what I think is a simple solution that’s very powerful and elegant in its simplicity, because it allows you to take something complex, the relationship of these large multinational firms, and boil it down to its essence so that you can actually do things about it. So, Ulrik, so happy you could join us. Thank you very much for giving us your time and I look forward to discussing this with you.
Ulrik Monberg: Hey, Harvey. Super happy to be here and really looking forward to just discussing one of my topics closest to heart: how we actually work with this complex stakeholder management so important for the strategic accounts.
The Strategic Account Management Association and Arpedio announce a joint development agreementthat continues SAMA’s ongoing commitment to bring forward tools that enable the work of strategic and key account managers.
SAMA and Arpedio, the Danish provider of sales and strategic account management insights and software, have announced a partnership to create a cutting-edge tool designed for strategic and key account managers to objectively assess their customer relationships and then progress through a value co-creation journey using SAMA best practices.
A recent survey of the SAMA community identified developing SAM-enabling tools as the community’s most urgent area of need, bringing into focus what continues to be an area of strategic focus for SAMA.
“Strategic account management enablement is all about tools, training and coaching,” said SAMA President & CEO Denise Freier. “This new feature uses as its organizing principle our SAMA intellectual property and best practices around value co-creation, and it can be used to coach teams around that process.”
We see it as an ideal complement to our existing, long-term technology partnership with Valkre, which offers a complete and progressive platform for enabling the work of the SAM as prescribed by the SAMA Playbook. We will continue to leverage Valkre’s offering in SAMA’s certification curriculum (CSAM), and the partnership with Arpedio just adds another digital tool companies can use to transform how they create value with their customers.
“Arpedio builds on its key alliance with SAMA to put SAMA’s knowledge in the hands of all strategic account managers,” said Ulrik Monberg, Founder & CEO of Arpedio. “Formalizing what has long been a key relationship between SAMA and Arpedio is a major milestone for Arpedio.”
The tool is ready to use and can be implemented in less than 30 minutes. To see how companies are already using Arpedio’s platforms to streamline stakeholder mapping, automate sales playbooks and bring discipline to the value co-creation process, read this article in the recent issue of Velocity magazine.
“We use Arpedio’s suite of tools ourselves to give a common structure and strategic lens to managing our most important customers. It’s quick, it’s easy to use and it’s powerful. It forces you to step back and say, ‘Where am I with this customer, and what do I need to do to get to the next step?’”
Harvey Dunham, SAMA’s Managing Director for Marketing and Strategy.
“SAMA has defined what makes a strategic account management program successful, and we provide a way of anchoring it in Salesforce CRM,” said Daniel P. Kallestrup, Business Development Manager for Arpedio. “It is the perfect match, resulting in professional execution, efficient teamwork and ongoing coaching.”
Please note: To take advantage of this tool, you must be using Salesforce as your CRM. For information on how this joint development agreement can help your SAM/KAM organization better manage its most critical customers, contact Harvey Dunham at firstname.lastname@example.org.
The Strategic Account Management Association (SAMA) was founded more than 50 years ago to help expose B2B companies to tools, methods and processes that enable them to forge closer relationships with their most strategic customers and co-create new sources of sustainable, customer-driven growth. We help companies become essential to their most strategic customers through competency-based training, conferences in Europe and North America, publication of original research and customized services like benchmarking and peer-to-peer learning.
Arpedio is a sales-enablement company and full-stack Salesforce.com consulting company operating globally in a dynamic, cross-functional and complex sales environment in a variety of industries. Learn more here.
At SAMA we strive to be innovative in how we deliver value to our customers, and that means experimenting with different formats and media for learning, training and networking. That’s why we have partnered with Edmund Bradford, a former global account manager who is now an author, educator and game designer. He is the managing director of Market2Win and developer of SAM2Win, the world’s first online game that teaches strategic account management.
SAMA Assistant Director of Knowledge & Training Dave Schweizer recently sat down with Edmund to discuss the SAM2Win training/simulation, which SAMA will offer beginning in November.Their interview has been lightly edited and condensed. You can listen to the entire interview here:
Dave Schweizer: Thank you for joining us, Ed. So what exactly is the SAM2Win program?
Edmund Bradford: As far as I know, it’s the only game in the world that actually teaches strategic account management, rather than selling. I think the best way to think about it is it’s kind of like a flight simulator for account managers and teams based on over 30 years of research and experience from myself and my colleagues, both practitioners and academics. In the simulation, we have five global companies all competing for the business of one complex global account. Each company typically has about one to five players, who act as the account manager or act as an account team if they’re playing as a team. And the participants or the teams play against each other — not against the computer — with all the fun and irrational behavior that generates from that. And simply, the winner is the company that makes the most profit at the end.
DS: In the simulation, participants can make certain decisions. What kind of decisions can they make, and how do they enter those?
EB: We pose three big questions to the participants. The first big question is “Where should we compete in the account?” In other words, which sales opportunities are the best for the future? We want them to be future-oriented in this. So, “Where should we compete in the account?” Sales opportunities, in other words.
Second question is “How do we beat the competition?” Which, in other words, really means, “How do we craft superior value propositions that fit current and future needs of customers and that will also beat any other competitor offers out there?”
And finally, the third question that they need to think about is, “When do we want to see the results?” So do we have lots of time in front of us, or do we need some results here in this particular period that will affect the kind of decisions the account makes? So it’s sales opportunities within this account, how to invest to generate the best customer value, share of wallet and profit (both for now and for the future) and how to invest to outsmart the competition.
We also look at the decisions, and analyze those decisions and provide feedback on how they’re making those decisions. So we give course correction guidance as we go through the simulation.
DS: How are the outcomes of each decision calculated?
EB: We typically run about five decision rounds in the simulation. When each decision round closes, our software engine compares all the decisions made by the different companies, and the companies that grow the fastest are those that invested most effectively in creating the best value propositions and the best sales opportunities.
So it’s all about getting your strategy right, getting the tactics right for how you are generating value and making sure that your decisions and your thinking are better than the competition. It looks at all the decisions from all the teams and says, “Who’s making the best decisions from the customer point of view and, therefore, from a customer point of view, where would you place your business?”
DS: Sounds like a very complicated thing to develop.
EB: I would say probably 10 years of real experience of creating and supporting account programs in companies went into it. Even before we put the software together, there was a lot of research and experience that went into it because we really wanted to get it right.
DS: That’s very impressive. So what knowledge can the participants expect to gain from the simulation?
EB: Well, there’s a huge amount, both in terms of knowledge and skills. First, they learn how to apply a good needs-based segmentation to the account. One of the first real wins is for them to go back to their account plans, get back to their strategic account analysis and say to themselves, “How should we divide up this account? Maybe there are cross-division, cross-country needs, which are similar. We just need to find that ‘golden vein’ of needs that run across the whole account.”
Second, we teach some great tools about how to pick the best sales opportunities for the future. So “Where should we focus our spend effort to generate the best long-term relationship with the account for the future?”
Third, it’s about developing superior value propositions — understanding what value actually means, crafting value propositions that are superior to anything the competitors are providing and making sure that we communicate that to customers.
Fourth, I think it’s about just getting better strategic customer analysis. For example, in the simulation, there’s a big procurement piece. With our good mutual friend David Atkinson, we’ve put a lot of good thoughts into the simulation around understanding procurement and how to align our account strategy with the procurement strategy — seeing how we’re positioned in the eyes of Procurement, both as a supplier and also in terms of our category of spend.
Those are the big knowledge areas, but I would also say: learning the art of strategic focus. So many account plans have this idea that we’re going to compete everywhere, against all competitors, in all sales opportunities, equally all of the time. And every time there’s an RFP coming up, we’re going to leap on it with all our resources. And the trouble is there’s not enough time to understand what the genuine needs are, and so that leads to shallow value propositions, very poor co-development of value and then stressed, unhappy and dissatisfied customers.
DS: Fantastic. How much time per week should participants expect to allocate for this program?
EB: You’re talking really about two days of effort over 16 weeks, and that equates to roughly about one-and-a-half hours per week. So it’s not nothing, but neither is it going to take over your life.
DS: How else do participants benefit from the simulation?
EB: Well, I’m glad you asked, Dave. First, it’s about account leadership skills, particularly around strategic thinking and execution. Participants become good at sort of rising above the details to understand the future, to not get buried in all the data. They become basically good at sort of, you know, seeing the companies play, understanding their future, recognizing their company’s place in that future and learning how to get there. So they are proactively aiming their company at a good place in the future rather than being dragged into bad places by the customer or by the competition.
Second, I think the benefit is that players are free to fail. The simulation allows an opportunity to experiment and take risks in a safe environment. And the nice thing is that no one gets sacked from playing the simulation. You learn from the mistakes and think about how you can apply the lessons learned to real life.
Third, players become very good at thinking about the issues and putting account plans together.
An unexpected result that I’ve seen: When we get people from different functional backgrounds, we see better alignment because – whether they’re coming from Finance or Logistics or Marketing – playing the simulation, they get a better understanding of what account management is all about. People end up sharing a common language. Some of the best games I’ve seen have been from cross-functional teams from the same organization.
DS: Do you have any tips on how to win?
EB: Do you watch “The Great British Bake Off”? Well, if so, you know Paul Hollywood. He’s asked, “Any final tips before the competitors go out there and bake their cakes?” I’m a little like Paul: I don’t want to give too much away. But I’ll say two things. Number one: Do your homework. Number two: If you’re losing, it’s probably because you’ve misdiagnosed the real problem. I’ll just leave it at that.
Boston Consulting Group recently released a three-part series on digital maturity in the manufacturing sector. SAMA reached out to series co-author Jonathan Van Wyck, a partner and managing director at BCG, to ask him what suppliers can do to make themselves indispensable to their strategic customers’ digital transformation journeys. This conversation has been lightly edited for length and clarity.
SAMA: I think people may have a narrow view of what we’re talking about when we talk about digitization. Can you lay out the full scope of what we mean by digitization?
JVW: When we think about digital transformation broadly, we think about a couple of different avenues. There’s one leg of it that’s saying, “How do you reengineer the customer experience, leveraging digital technologies, to support the projects and products you are offering?” The second is, “How do you actually leverage digitization as an opportunity to drive new growth and launch new solutions and new businesses?” And then there’s digitizing your internal operations, which is taking the internal lens and asking, “How do I take my manufacturing process, my supply chain, my customer service and support, and my sales processes, and leverage digital technologies to reengineer — either at a lower cost or to drive more effectiveness — those internal processes?” We have a framework off the shelf on that if that’s helpful to share.
SAMA : Can you talk about what you set out to study and what you learned?
JVW: What we’ve been seeing is that everybody’s talking about digital operations, and everyone feels a high degree of conviction that this is the future. But when you take that and contrast it with the progress that we see with our clients, there’s a disconnect. What we’ve found is that they’re taking almost a project-based approach to digitization, where they’re working with individual vendors who have a cool technology to pilot it in a specific location. Or they have an internal project around some component of digital — a plant scheduling tool or something like that — but they’re not able to drive it at scale and really capture the full benefit.
So we took a step back and started thinking about what we have learned from doing this with a bunch of companies to sort of bridge that gap between what we talk about as the opportunity versus the reality of where companies are — and then move from point solutions and individual projects or applications to actually driving value at scale.
SAMA: So what you’re saying is, there are a lot of pilot projects out there that can prove themselves out, but the companies, for any of a number of reasons, don’t manage to scale the solution and really capture the full value.
JVW: Exactly. When you look at past industrial revolutions, I’m sure it took the same stages in development. But the challenge here is that the way of working is so fundamentally different from traditional approaches. We’re talking about another revolution in terms of the types of talent, way of working from an agile standpoint — but also building the infrastructure to be able to support these use cases. I see our third paper as the most critical one. It’s about the organization and way of working to drive this at scale, which is ultimately what I think is the issue.
It’s not like companies don’t have great ideas, and it’s not like companies don’t have an idea of what the right use cases are. It’s really about, “How do you actually build the organizational capability, the funding model and the talent to be able to do this?”
SAMA: I’m thinking about the manufacturing environment, in which great plants are typically run by very seasoned people who have been doing this forever. And to do a pilot project, you’ve got to bring in data scientists and a bunch of under-30 digital natives who can actually make it happen.
JVW: Also, company processes are oriented towards waterfall I.T. projects and are not set up to support this type of innovation. Because a traditional funding model is, “Submit a capital request with your full plan, the milestones all laid out, the exact financial investment that you’re looking for from the company, and then we’ll have a meeting with our senior leadership and debate it, probably cut your funding a little bit, and then approve it.” Whereas here, you don’t actually know the challenges, and actually laying out a full roadmap and waterfall set of milestones is actually counterproductive to what you actually need to do to experiment quickly, which is to assume that 25 percent of what you do is really going to work. So you do the 75 percent that will fail very cheaply, and then rapidly scale the 25 percent that does work. You just don’t know all that stuff in advance, and so it doesn’t fit with traditional processes.
So there’s a challenge from a talent standpoint, but I don’t think it’s just about hiring more people under 30. It’s about thinking about your internal processes and, in some cases, modifying your approach to how you drive digital operations. And this applies more broadly, not just within operations but to your traditional funding, project management and approval.
SAMA: So to a certain extent, you have to invest and pray and then say, “OK. How can we take this 25% percent [that’s actually working] and really put more effort into those and get more benefits faster?”
JVW: You just need to set it up to say, “We’re going to have an outside-in view of what the opportunity is. And we’ll have a long list of use cases, roughly mapped to that opportunity, and an idea of what that’s likely going to cost.” And then in your next meeting, a month later, you’re going to have a much more refined view. And then a month later, it will be even more refined.
So it’s a journey from more ambiguity to more specificity, but you just can’t shortcut that journey and have the specificity at the beginning.
That’s really challenging for companies that are used to having that specificity, which in reality is false specificity because projects overrun 80 percent of the time and take longer, et cetera. It’s a mindset shift.
SAMA: In my career, we had a hurdle rate that you had to exceed. If your project didn’t have better than a two-year ROI and proven, financially sound waterfall, you didn’t even submit the project because it was never going to get funded. Is that mentality bumping up against how you have to approach the digitization project?
JVW: There is a set of infrastructure that needs to be put in place to support use cases: You need to set up a cloud infrastructure. You need to build a data lake. You need to invest in a certain number of technologies, et cetera.
The challenge is where I’ve seen companies burdening those first set of use cases with the cost of all that infrastructure, even though that infrastructure could support 100 use cases.
This problem can be unlocked by doing it at scale and having conviction around the strategic relevance for your overall company and the total value on the table, versus taking it piecemeal and starting with three or four use cases in one factory.
SAMA: In a normal plant environment, there’s a plant manager, there’s a division leader, there’s probably some subject-matter experts, et cetera. But with this kind of thing, it sounds like you need to go above that traditional manufacturing decision-making process and get C-level buy-in?
JVW: Typically it’s at the C-level.
SAMA: From the supplier perspective, do you see them being a catalyst by bringing some of these ideas forward, or is it all internal to the customer itself?
JVW: I think the more stakeholders you can involve in the ideation process, the better. I’m a big proponent of involving suppliers, but I like to first recommend that companies internally align on what the pain points are and a high-level view of what a solution could look like before they go down that path.
SAMA: Are there any kind of best practices that you see good suppliers doing to really help this process work?
JVW: Recognizing that the process needs to start with the pain points and value levers. Don’t lead with your technologies, but facilitate a workshop around a specific process that’s relevant to them. That can be really powerful. It’s also about being open to collaboration and sharing of data. Because one of the other challenges I see is that it’s so hard to share data across companies.
SAMA: Are there any observations on who typically leads that so-called ecosystem to create a common data lake? Do you sometimes see a supplier that takes that on for the manufacturing company to help pull all these disparate entities together?
JVW: It’s typically a manufacturer, but wherever the supplier has the scale I don’t see why they couldn’t take the lead in their specific swim lane.
SAMA: We teach our customers to say, “It takes a village to solve the problem, and if you can become the leader of that village, there’s a lot of value.“
JVW: I think that’s the next frontier: How do you digitize the value chain and start working with your suppliers and working with your customers to take waste out of the system looking holistically? Whoever can lead that ecosystem is in a pretty interesting position.
SAMA: Say I’m the strategic account manager for 3M going into a factory and trying to bring value to them. Any advice you’d give?
JVW: First, I think it’s so much easier to do that if you have a business model or an offering where you’re a solution provider versus an individual product provider. That’s one piece. And then the other piece is, map out the customer journey associated with your product or solution, and what that looks like — where the frictions or pain points are along that journey. If you don’t have that, then you’re not going to be able to add value to your customer. Having that approach embedded into the strategic account playbook becomes really valuable because it allows you to have a different level of discourse with your customers.
SAMA: Say you’re a SAM who just got assigned to a new customer. Is there a typical spot that you might want to start inside your customer, or is that really company by company, organization by organization?
JVW: It is very case by case. Some organizations will have a manufacturing strategist. Some may have a digital organization already set up. Some may be decentralized, with the plant manager driving the decision making. Some may be more centralized. That’s why you need to be able to map the organization of your customer and understand where the decision makers are.
SAMA: Typically, when this first meeting happens, is the customer expecting the supplier to bring people that have subject-matter expertise?
JVW: Yes, you can also look horizontally — because you may not have the whole scope of technology required to solve this pain point.
You need to be humble in recognizing that you may not have the capabilities to solve the entire pain point, and so you may need to work with your peers to build a solution that you can then bring to your customer.
And if you’re the one actually orchestrating that, it can be really value-additive, versus just bringing your customer a specific technology.
Say for example that you have the best programmable logical controllers, and then maybe you partner with the analytics provider who does the analysis on top of that, and then — oh by the way — you partner with a robotics company. I haven’t seen many suppliers do this effectively, but that could be very differentiating to be able to offer as the supplier. And then, by the way, you’re the one with the overall solution, versus [just being] one piece of it. That’s a much more powerful position to be in from a margin standpoint.
You can find BCG’s how-to guide to digitization here. Parts two and three can be found here and here.
The world of strategic or key account management (SAM/KAM) is the growth area of sales, which makes sense given how technology is overtaking so much of the transactional sales space. With customers no longer in need of someone to educate them on products or services, they need salespeople who can step beyond the information available online by delivering real insights that help them solve real problems. Welcome to SAM.
SAM is new to many companies. In others, it is transforming from relationship management to becoming a true problem-solving resource. During this time of transformation there is no better resource than SAMA (Strategic Account Management Association). They have been at the center of the universe for all things related to SAM research, learning and networking for more than 50 years….before SAM was cool!
Over that time, SAMA has benchmarked hundreds of B2B companies to identify what the best SAMs do differently. Keep in mind: I’m not talking about all the criticalSAM program elements like executive sponsorship, account selection, compensation and the like. I am talking about the actual nuts-and-bolts work that a SAM must do with his or her internal and customer teams to be successful.
B2B sales leaders who use digital effectively enjoy five times the growth rate of their peers who don’t. But a recent McKinsey & Company survey of B2B customers highlights a more nuanced reality. What customers want are great digital interactions and the human touch, depending on what they’re trying to do.
Companies that respond to customer preferences and add the human touch to digital sales consistently outperform their peers. They capture five times more revenue, eight times more operating profit and, for public companies, twice the return to shareholders. This data holds true over a four- to five-year period.
Many sales organizations, however, have trouble putting this human-digital program into practice. The truth is that there are no tried-and-true methods, though technology lies at the heart of customer interaction models to power or inform either the digital or human interaction. Companies need to create the human-digital blend that is most appropriate for their business and their customers. This should not be a random process of trial-and-error testing. What is needed is a systematic way to evaluate the optimal human-digital balance.
This human-digital balance is thrown into particular relief when it comes to artificial intelligence (AI), which is having an impact not only on the broader selling profession but also on strategic account management (SAM). Take, for example, the case of “Andy,” a bot introduced recently by a company to help identify, contact and set up appointments for SAMs at their customers. These appointments were in customer business units that had been either unserved or underserved and that displayed decentralized, regionalized buying behaviors.
Andy’s key capability is her ability to rapidly learn what kinds of outreach and communications are working and to instantaneously adapt her methods to suit. After just a few months, new leads were up 50 percent compared to the year before, while new costs for obtaining those leads were down.
Bots are already managing relatively mundane tasks like this at many companies, but could a bot like Andy manage an end-to-end sale for something like a transactional good to a small- or medium-sized business? Researchers at McKinsey Global Institute (MGI) have studied more than 2,000 discrete human activities across 800 professions, in 50 different countries, to assess the degree of “automatability” of activities in those professions. In some cases it was 100 percent; in others, it was zero. For management professionals, like SAMs, it was around 30 percent.
Comparing skills that are most crucial for the SAM role — things like managing teams, co-creating value with a customer, managing stakeholder interactions and others — with other types of activities that we don’t traditionally think of as part of the SAM role, the three most essential SAM tasks are only marginally automatable.
Figure 1. The degree of automatability of tasks by bot (left side) and by humans (right side).
But do customers want to interact with machines? The answer depends on context, as figure 2 shows. Figure 2 shows the research on how customers buy. The answer: It depends on the context.
When working with a new supplier or vetting a new offer from an existing supplier, 75 percent of customers say they want to deal with an actual human being. As customers move into the evaluation and active-consideration stages, digital tools that provide information, such as comparison tools or online configurators, come into their own, especially when combined with a highly skilled salesforce. When it’s time to renew or update standard terms and conditions, the equation flips, with 85 percent saying they prefer a fully digitized interaction.
In essence, buyers are saying that when co-creating something new and different with a strategic supplier, they’re all for engaging with the SAM. Yet most B2B companies still reward reps more for spending time keeping customers loyal and repurchasing than for uncovering new customer needs or driving demand, which is exactly where customers say they want face-to-face expertise.
So there remains a time and a place for intimate, significant human interaction, and there is a time and a place for bot interaction. The trick is to understand which is which and to adapt the strategic account management approach accordingly.
In particular, there are five areas where humans are needed and can do a better job than AI-empowered machines:
#1: Managing exceptions to standard protocol. Advanced analytics and machines get it wrong a lot of the time, and sometimes you need a human being to actually make the call. A materials company during the height of the economic downturn faced a situation where one of its strategic accounts was experiencing a credit crunch. By any kind of financial or data-driven standard, this supplier should not have extended additional credit to this customer. Now, what a machine couldn’t know is that this was a family-owned business and that the father was getting ready to retire. One son had been tapped to take over the company, while another brother worked at a key competitor that also happened to be one of this supplier’s strategic accounts.
So while the decision not to extend credit may have been “obvious” based on the data, the head of strategic accounts, who was familiar with the situation, worked with the father to find a solution. In the end, the father was happy, which made both sons happy — and which kept both strategic accounts in play.
#2: Using judgment in situations of ambiguity. When data is new and unlike anything that a machine has seen, the machine won’t know what to do with it. That’s where managers come in.
A company may be in an industry experiencing substantial mergers and acquisitions or business closures. In a merger situation, it is highly likely that the customer having the more advantageous terms with a supplier will ask for those same terms for the other account. It takes human judgment to plow through those terms and conditions and to make tradeoffs based on the role the strategic account(s) plays in an overall portfolio.
#3: Shaping strategy. Humans still must shape the overall commercial strategy in light of their growth goals — even if machines take over part of the work, like analyzing buyer trends, determining new sources of growth or predicting whether accounts are at risk of full or partial churn.
#4: Nurturing a complex ecosystem of relationships. Because today’s customer-supplier ecosystem is so complex, with interconnected webs of relationships including those forged digitally, it requires even more thought to select the most appropriate people to invite into the ecosystem and then to manage the content shared with them. SAMs need to determine not only who is in the network but also on whom to focus at different times and in different situations with the customer. This requires SAMs to know who are the most influential decision makers within an account and to build this knowledge into their account plans. While there are tools today that can illustrate the breadth and depth of relationships based on social media presence and suggest who are the influencers, such machine-based data still cannot replace you knowing your customer deeply –- who is on the way up, who is on the way out and who you will need in your corner. When we rely too much on the data to tell us how our customers are likely to behave and not enough on our own intuition and personal knowledge, that’s when SAMs can run into trouble.
#5: Focusing the power of advanced analytics. SAMs should embrace advanced analytics for their ability to help us to have more, and more productive, value-creating conversations with strategic customers. This is the area where AI can make our jobs not only a lot easier but also a lot more fun.
This means taking the data for what it is but then testing and retesting it. If the data suggests ways to generate additional volume, grow revenue, cut costs — whatever the outcome is that you’re looking for with your strategic account — you can pilot, you can test and you can learn. But you still need to use good business judgment. For example, experimenting with next-product/service-to-buy algorithms can support cross-sell activities, but if it’s not a good time to have the conversation with the customer, those activities need to wait.
To stay ahead, there are two areas where SAMs need to raise the bar in terms of using advanced analytics to help deliver on customers’ needs:
#1: Know your products, services and data offers much more intimately than you do today. Customers today have access to a wealth of information about your offerings via digital platforms and their own personal networks; if they are going to have an actual conversation with a SAM, they expect a deeper level of insight and expertise than what they can find online.
#2: Become an expert advisor. Data is best at suggesting different options, but where humans can provide the most value is in making decisions using that data. SAMs need to get good at making sense of data to make better decisions. For example, there is a global producer of wind turbines that uses AI and big data to guide decisions on where customers should locate their next round of turbines. But even with this data, succeeding with large customers still requires a SAM to have a nuanced, highly informed and consultative conversation with stakeholders whose job it is to decide where to build and place the turbines. While data like barometric pressure, predicted weather forecasts, topography, population demographics and more are critical inputs to those decisions, humans still need to choose whether or not to follow the data in light of other investment considerations.
In the end, the biggest benefit of AI to the SAM profession may be in its ability to make the job more fun. SAMs spend only about 10 percent of their time on creative pursuits, such as brainstorming new offers. With all the time SAMs currently spend making appointments, following up on invoices and putting out fires at the customer, that is time that could instead be spent coaching teams, boosting social and emotional intelligence, and on other high-value activities. This is where the bots can step in and help. SAMs should embrace the bots for what they can do to free up time that can be spent doing more interesting and creative things – like becoming more human with their customers.
Jennifer Stanley will deliver a keynote address at SAMA’s Pan-European Conference 14-15 March 2019 in Amsterdam.