“Extreme” Negotiations with Customers

By Jonathan Hughes, Partner, Vantage Partners; Ben Siddall, Partner, Vantage Partners; and David Chapnick, Principal, Vantage Partners

In November 2010, Jonathan Hughes, Aram Donigian, and Jeff Weiss published an article in the Harvard Business Review titled “Extreme Negotiations” that highlighted lessons in effective negotiation under extreme pressure from the U.S. military that also apply in the business world. Today we revisit those lessons in a very different world. The COVID-19 pandemic has shaken world markets, created significant political and financial instability, and reduced business predictability. Many companies have experienced a slowdown in business activity, with resulting revenue losses over the past several months.

As the news changes every day, timeframes for recovery are uncertain and will vary significantly by industry sector. As we saw in the 2009 financial crisis and subsequent recession, challenging contract renegotiations are a predictable result of this new reality. As companies in many industries confront shrinking demand, higher levels of unused inventory and increased uncertainty, they will undoubtedly turn to suppliers for cost savings while simultaneously looking for guarantees of supply assurance.

Sales teams will need to respond to heightened pressure from customers to reduce pricing, while negotiating to protect revenue and margins — even as they work collaboratively with customers to meet their needs and address their constraints. The current environment thus raises the stakes in customer negotiations and also increases the risk that negotiations become adversarial.

A key insight underlying the ideas in the 2010 HBR article is that negotiation behaviors tend to be deeply ingrained and are often reactive rather than deliberate, especially in high-stakes and stressful situations. Today’s environment can be viewed through the same lens. These strategies are not only useful at the bargaining table but can (and should) also serve to reshape planning and positioning far in advance of formal negotiations that we know are coming. A strong (collaborative) offense is the best defense.

Editor’s note: This article has been edited for length. The full piece, featuring multiple customer examples, will appear in the Fall issue of Velocity magazine.

Strategy 1: Broaden your field of vision, question assumptions, and rethink objectives

Start by identifying key assumptions and subject them to scrutiny; use negotiation planning and execution to continually gather new information and revise strategies accordingly.

One hallmark of the “extreme” negotiation is a feeling of danger creating pressure to act fast to reduce the level of perceived threat. In the face of this pressure, negotiators often begin acting before they fully assess the situation. They act and react based on gut feel and initial perceptions. Given the added pressure to look strong and gain (or remain in) control, they tend not to test or revisit their initial assumptions even as the negotiation progresses. As a result, they often negotiate based on incomplete or incorrect information. This often leads to conflict, impasse, or, at best, a resolution that addresses only a part of the problem or opportunity at hand.

Continue reading ““Extreme” Negotiations with Customers”

In difficult times, sometimes red tape turns orange

By Saleh Al-Ben Saleh

Strategic Account Manager, Emerson Automation Solutions

It is quite rare you get into a global economic struggle with two, simultaneous disruptive factors, but we have just this situation now with the combination of the COVID 19 pandemic and the deterioration of the price of oil. As if one of them wouldn’t be enough to wreak havoc around the globe, it’s almost like they joined together to achieve their goal of maximum disruption.

The overall impact of these two simultaneous disruptors is something I doubt any of us will forget any time soon. It has forced decision makers to enact abrupt cost cuts (fixed and variable), encourage remote working, reduce active manpower on sites, adopt high dependence on virtual communications and virtual teamwork technologies, and finally to acknowledge the harmful impact of the pandemic and seek to at least minimize the damage. Only a lucky few end-users are still on the upper side of the revenue/cost chart. 

I would say there has never been a more important time for strategic account managers to proactively steer business efforts aimed at creating new business value for both the supplier and the customer. While SAMs have surely already created and captured real business value for his or her accounts, it’s time to take these efforts to the next level. But how?

Continue reading “In difficult times, sometimes red tape turns orange”

DESIGNING THE CUSTOMER-CENTRIC ORGANIZATION: A NINE-STEP GUIDE TO LEVERAGING A SAM PROGRAM AS AN ENGINE FOR SUSTAINABLE GROWTH

By Robert Hueber, Business Unit Director, Packaging, Herrmann Ultraschall

Artur Wagner, Founder and Partner, MP Consulting

Today, an increasing number of medium-sized B2B technology companies are establishing a global strategic account management (SAM) program for their most important customers. This was not always so. In the past, CEOs of such companies did not believe that customers, vastly larger than themselves in size, would be interested and willing to engage in a partnering and co-development process.

The SAMA slogan “It’s not about size, but all about relevance!” can become reality if the foundations for such a program are laid and a systematic process for building a SAM program is established.

We are convinced that our findings are perfectly applicable to larger companies as well. Many of these have already implemented a SAM initiative, but not all are reaping its benefits. This, we will argue, is mostly due to a sub-standard design and/or faulty implementation.

The aim here is to provide a specific methodology for assessing an optimal level of customer-centricity and the best way for integrating the SAM organization into the matrix organization.

Continue reading “DESIGNING THE CUSTOMER-CENTRIC ORGANIZATION: A NINE-STEP GUIDE TO LEVERAGING A SAM PROGRAM AS AN ENGINE FOR SUSTAINABLE GROWTH”

Interesting!: New research shows male and female account managers take different paths to SAM success

By Tania Lennon, Global Space Lead, Talent Assessment and Leadership, ZS Associates, and Namita Powers, Principal, Customer Engagement Excellence, ZS

ZS has conducted extensive research into strategic account management success profiles. Using in-depth profiling, behavioral observations and manager reviews, ZS has identified critical competencies, skills and characteristics that drive high-performance outcomes in SAM roles, such as a shift in focus from achieving goals to achieving success and a more sophisticated approach that ZS identified in women account managers.

Men and women: Different paths to success

While there were some clear themes in the drivers of success for SAM roles, there were also some gender differences in how they achieved success. The graph highlights the key areas of difference between successful men and women SAMs.

Gender differences in how SAMx achieved success

Women SAMs demonstrated more sophisticated skills in three key areas important for success.

Continue reading “Interesting!: New research shows male and female account managers take different paths to SAM success”

Crafting the right sales message for every customer-supplier situation

By Nicolas Zimmerman, Editor-in-Chief, SAMA

To challenge or not to challenge? That is the question.

Ever since CEB published its seminal book “The Challenger Sale,” the challenger paradigm has reigned supreme. It has been taken as gospel that the best way to win more deals is to disrupt the status quo by taking control of customer conversations and introducing new, provocative ideas. (On the other hand, SAMA has always considered the idea of “taking control” of your customer to be misguided at best, disastrous at worst.)

Corporate Visions has been at the vanguard of partnering with academics on research designed to test whether challenging actually does what it’s supposed to — and if so, under what conditions. In other words, challenging may work when you’re trying to convince a prospect to move business to you. But does it also work when you’re trying to convince existing customers to:

  • Stay with you?
  • Pay more for your products/services?
  • Do more business with you?
  • Forgive you for a lapse in service?

(Sneak preview: The answer is NO.)

If you missed the SAMA/CVI next-practice symposium Feb. 12 in Chicago, first of all: Shame on you. But second of all: You’re in luck, because I’m going to lay out many of the key takeaways here. Read on…

Continue reading “Crafting the right sales message for every customer-supplier situation”

You *MIGHT* be a SAM/KAM….

By Harvey Dunham, Managing Director of Strategy, SAMA

With more than 30 years working with strategic accounts at Schneider Electric, I know first-hand that few jobs in the world are as misunderstood as that of a strategic or key account manager. People think of you as the ones who “make the big bucks” without the stress of making quotas, the ones who put their customers’ needs above their own company’s.

They also assume you were born clairvoyant, omniscient and all-powerful. No pressure, right?

Even though Schneider is one of the longest-running members of the SAMA community, I was 20 years into my career before I attended my first SAMA event.

My first reaction was: “Why didn’t I do this sooner?”

I remember having conversations on the sidelines with complete strangers (many of whom I now consider close friends and even colleagues) that yielded nuggets I immediately put to use with my own customers. It’s a powerful experience.

But what I remember most vividly is how soothing it was to finally – at last! – be surrounded by hundreds of people who “get it.” Working as a strategic or key account manager can be lonely — and that’s what makes being a part of the SAMA community such a powerful experience.

In honor of that feeling of community, and in anticipation of our upcoming Annual Conference and Pan-European Conference, I present to you my own personal top-10, “You MIGHT be a SAM…”

If you have a company car, but you only use it for driving to the airport….

If you have far more people working for your customer initiatives than your boss has direct reports – even though you have no official direct reports…

If your best years involve an audit from Finance “just to make sure” you’re not fluffing your results…

If your magic power is being yelled at by your customer’s CEO and your own CEO at the same time

If you spend dull meetings mentally calculating how many weeks it’s going to take you to recover from jet lag…

If your own spouse and kids are on a first-name basis with your main customer contacts…

If you’ve got more swag with your customer’s logo on it than your own company’s…

If your meetings bring together more of your customer’s big players than their own meetings do…

If you catch yourself calculating bar tabs in your customer’s home currency…

Then you might…just possibly…be a strategic/key/global account manager.

Yearly rewind (and a look ahead) from the desk of SAMA’s CEO

By Denise Freier, President & CEO, SAMA

It’s hard to believe, but the holidays are nearly here. I always find it useful to look back at the year that’s passed and — more importantly — what’s ahead in the year to follow. It’s easy to forget the past year’s accomplishments amid the excitement of what’s to come, and I want to be sure SAMA is providing the insights and knowledge you need. With that in mind, I’m pleased to have a chance to do a little bit of both in this space…a quick look backward and forward.

A look back

#1. We put into words what we believe is SAMA’s entire reason for being: To equip our customers (i.e., you) with the tools, insights and knowledge you need to become indispensable to your customers. I’ve found these words incredibly helpful for clarifying our mission and ensuring our offerings meet this expectation. If we can help you become indispensable to your customers, then the business results will follow.

#2: We added 23 member companies 96 individual members to the SAMA community. This is extremely important to the insights and value we offer you.  Our community comprises, without exaggeration, the smartest, most forward-thinking B2B companies in the world, and we leverage their knowledge and expertise to synthesize and disseminate best and next practices in strategic customer management. Our strength is truly in our members, and every new company we add brings fresh potential for ideas.

#3: In 2019 SAMA minted 65 new Certified Strategic Account Managers. Not only have these exceptional SAMs invested in themselves by becoming certified, but they have transformed themselves into role models within their organizations and evangelists for the SAM approach to customer management.

#4: We developed partnerships with like-minded providers in France, Germany and Brazil. Why is this important to you? Because this will allow us to expand our ability to deliver training and thought leadership in these critical regions, further spreading the cause of strategic account management.

#5: We launched The Facilitator, a tool enabled by a process that we developed to help our customers make better strategic account selection decisions. We have had 11 engagements to date, and the results so far have been tremendous. (More on this in 2020!)

A look ahead

So what larger trends and challenges is SAMA looking at for 2020 and beyond? Keep in mind, it’s still 2019 — so this agenda can and will change. But here are five topics SAMA is looking at for the year ahead, and we think you should be too.

#1: Bulletproofing the SAM program against cost cutting. With talk of recession (shhh!  Don’t say that too often), SAM programs need to do all they can NOW to prove their value. Once you’re under pressure — whether from activist investors, a hyperactive CFO or just your Board — it’s already too late. You need to trumpet your success stories internally, continue to build the SAM brand within your organization and use the voice of the customer to demonstrate the value of the SAM approach.

#2: Customer success management is all the rage. What does it mean for strategic account managers? We believe it simply reinforces the fundamental wisdom and necessity of the SAM approach, which revolves around understanding customer pain points and value drivers, connecting them with their own internal capabilities, organizing and aligning an ecosystem capable of solving customer challenges, and then quantifying the co-created value in terms of the customer’s own metrics. It is a trend we are actively monitoring.

#3: Countering the “what now?” phenomenon. In other words, once you’ve set up your program, begun working differently with your most strategic customers and institutionalized the SAM approach across the organization, where do you go from there? Uncovering ways to unlock additional innovation and efficiency for mature SAM programs will feature prominently on the SAMA 2020 agenda.

#4: Understanding and optimizing the entire ecosystem of support around the strategic account manager. Today’s SAM is blessed with a myriad of tools in her arsenal, from digital marketing and customer success to inside sales and advanced analytics. We will be looking to make headway into understanding (a) what’s the optimal team construction and (b) how to upskill the SAM to ensure he’s able to properly leverage all these complementary skills.

#5: Technology supporting the SAM. As I mentioned earlier, we rolled out a new process-enabled tool to help customers make better, more objective decisions around whom to partner with. We also published a special issue of Velocity dedicated specifically to highlighting tools designed to enable the customer value co-creation process. We surveyed many of you earlier in the year, and one big takeaway is that our customers are looking to us to bring to the table tools that support both the SAM and the SAM organization. So this will undoubtedly be a prime focus for us in the year ahead.

Enjoy the holiday season!  Take stock in your accomplishments, and let’s all anticipate greatness in the new year.