What suppliers can do mid-contract to future-proof their negotiations

By Jeff Cochran, Partner, Shapiro Negotiations Institute

We’ve all been there before. You’re halfway through your initial contract with a new client. Things are going great. Sure, there were some growing pains in the beginning, but you feel you and your firm are adding a lot of value and you’re confident your client feels the same way.

So why is it that most of us always wait until the current contract cycle is about to wind down to engage about an extension?

At Shapiro Negotiations Institute, we coach the principle that the best negotiation occurs when you have leverage. This article discusses what you, as a supplier, can do mid-contract to make your upcoming negotiations more successful.

Step 1: Get your team on the same page

One common challenge for renewing or upselling business at the point of a contract extension is simple: alignment. Typically, coordination among departments and team members is never as tight as it is during the initial pitch exercises for that first deal. Once the work is won, however, the contract begins to take on a life of its own. This can become a challenge down the road when it’s time to re-negotiate.

In some cases, we’ve seen companies do a complete “hand-off” at various stages of the project. From winning the deal to kicking off, or from moving a project into a new stage of development, suppliers can become distanced from the actual work and, therefore, from the relationship with the customer. This is usually where an oversight role — like that of a strategic account manager, who’s responsible for the overall corporate relationship with the customer — can be helpful to coordinate everything from start to finish.

Even in working relationships that involve a SAM at some level, it is still critical to keep the team aligned. Especially in larger projects, we commonly see senior partners or directors forming the arrangements but more junior associates or managers doing the day-to-day work. Over the life of the contract, this sometimes results in providing extra services at cost for the good of the relationship or the “leaking” of various intel from your team to the clients. 

In any case, we recommend having consistent communications and team check-ins at multiple stages through the life cycle of the project. Establish priorities, discuss future opportunities and even determine talking points around critical internal issues. A united front is imperative to successful (and smooth) renegotiations and extensions. 

Step 2: Manage expectations

Negotiations are about promises and clear terms to create a value exchange. Misunderstandings can be catastrophic. Therefore, you should manage your client’s expectations at all times. We’ve coined this essential tenet “Cochran’s Law” after – you guessed it – Yours Truly. 

Cochran’s Law boils down to the idea that satisfaction = reality ÷ expectations. If expectations rise, then reality – what your client receives from you — has to rise as well if you want to keep them satisfied. If you provide too little, you put your contract renewal or upsell in jeopardy. But if you provide too much, you spoil them for the next agreement and risk a drop in customer satisfaction.

There are a number of ways to manage expectations throughout the negotiation and project, but two of the simplest will never fail:

  1. Work to understand the client’s decision-making process. Do what you need in order to understand which stakeholders are involved, who has final approval and what key performance indicators will determine success. Connect lofty business goals to concrete and measurable objectives so you can align on exact targets. 
  2. Build relationships along the way. Most discovery processes will allow you to create a map or schematic of the key stakeholders, their roles and what they value most. Whenever possible, we recommend building relationships with as many of these stakeholders as possible, leveraging the reach of your full team. Going deeper into key departments will help you gather more intel, while going wider into other departments may offer you different perspectives or insights about the project and its value to the company. Maintaining only one key contact leaves you at risk if they change roles or leave the organization. 

The key is to get credit for the extra value you provide and manage expectations on what you’re expected to deliver. Once you know the client(s) and what they value, you can maintain status quo or scale your value strategically to surprise and delight. For example, small tasks like setting up Google alerts to help your client track media mentions and performance could be highly valuable to your client with minimal extra effort on your part. 

Step 3: Always be selling

Your mindset is key. A trick of the trade – something you’ve probably heard a ton and possibly even scoffed at – is that you need to always be selling. Remember: While you’re delivering your work and building your relationship, you’re also always in a constant cycle of negotiation.

Your work product is part of that negotiation. The rapport you build personally and professionally factors into it, too. Another common mistake we see is people referring to the time before your contract expires as “the renewal cycle.” Many companies fall into this trap of “OK, we’re about one month away from our deal expiring, it’s time to start negotiating again.” If you begin your negotiation weeks before your current deal expires, you’re already on the back foot.

The effort you put in in the middle of the agreement is actually often the most valuable for several reasons:

  1. Your client will feel like you are really invested in him or her, rather than just appearing to care when it is time to renew. High-quality partnership will be remembered.
  2. Projects and work streams don’t always follow fiscal cycles. Effective work mid-project will lay foundations for your team that may actually make it more challenging to end the contract than to extend it.
  3. Strategic planning should never be limited to one window. Throughout the project, every task should ideally serve a larger purpose in a strategic plan looking at least three years out. Helping your clients identify long-term priorities both allows you to shape them and gives you a seat at the table as their foundational partner. 
Your Next Contract Negotiation

Be prepared, be engaged and be committed. Those three traits will go a long way in your continued success.

Jeff is a partner at Shapiro Negotiations Institute and a frequent presenter and keynoter for Strategic Account Management Association. Connect with him on LinkedIn: https://www.linkedin.com/in/jeffcochran/

Got CXM? Why customer experience management isn’t just a nice-to-have for strategic account management

By Raj Parekh, Partner, CuebridgeCX

According to Gartner, it’s the “new competitive battlefield.” Per Forrester, 84 percent of firms aspire to be leaders. In strategic account management, companies have to address the never-ending question of how to differentiate themselves and gain market share. And yet most SAM organizations — large and small — haven’t tapped this potentially huge source of competitive differentiation.

I’m talking about customer experience management (CXM), which I would argue may be the single most important investment a company can make in today’s cut-throat business climate. It is absolutely essential to success today.

Leading industry publications and consulting companies have conducted significant research into the growing trend and have found that:

CXM vs. CRM: Do you need both? 

Yes! (And here’s why.)

The reasons lie in how these systems are built and the purposes they are built to fulfill. CRM systems are focused on opportunity management, while CXM systems are focused on managing the ongoing delivery of value and the assessment of outcome attainment. CRM tools are not designed to manage triggered work streams or focus on sustaining and protecting ongoing revenue and client relationships – all activities that are fundamental to the successful implementation of a strategic accounts approach. This is where CXM shines.

First, a definition of terms:

CRM CRM software keeps sales processes organized and aligned with best practices up to the point that a deal is closed.

Value Selling A sales approach that focuses on benefiting the customer throughout the life cycle of your relationship. Account managers are focused on taking a consultative approach to selling, such that customer decisions are based on the overall value potential of the supplier’s products and services.

Customer Success Once a deal has closed, customer success continues the relationship by helping to deliver on the promises made during the sales process. Customer success is focused on retention, loyalty and advocacy.

Add them all together, and you get customer experience management. Bottom line: You need both CRM and CXM for your business to succeed. 

https://cuebridgecx.com/images/CRM-chart.png

The basics: What CXM actually is

Does introducing CXM mean implementing a completely separate system from my existing CRM? In a word: No! Customer experience management is complementary to your CRM. When done right, CXM helps optimize your overall technology investment by laying customer experience functionality on top of your existing CRM. How? By bringing the power of digital transformation to your customer relationship through enabling your strategic account managers to provide superior insights and experience to their customers at every stage in their journey with your company’s products and services. 

The Customer Life Cycle: From Awareness to Advocacy

Advantages and key design elements of CXM system

With the introduction of digital natives among client organizations, CXM has emerged as the next frontier for account teams. For companies to survive and thrive, cultivating and focusing on growing existing customer relationships has become integral to strategic planning and operational execution.

The implementation of CXM is the ultimate solution.

Traditional CRMNext-Gen CXM
Unified System
Key accounts data and essential intelligence is spread across the organization (financials in external systems, plans in PowerPoint, Excel and Contacts & Opportunities in CRM, Google search, et al.)Under one Unified application, CXM combines data silos and digitizes functions by leveraging CRM, social media, and financial and contract data to deliver a superior client experience across their life cycle with your company.
Insights to Action
No standardized way for management to trigger best practices and required field actions in real time
CXM system triggers workflows on real-time basis for account teams to take time-critical action to service clients effectively, stay ahead of the competition and be consultative
Best Practices at Scale
Best practices are often not standardized across the organization. Disparate approaches rule the roost.
CXM systems are designed to coach users and allow critical thinking at the point of client engagement. It provides periodic updates and expert guidance to users for effectively performing their day-to-day tasks 
Enterprise Memory
Account intelligence is tacit and ad hoc. Risk of data loss due to employee attrition negatively impacts future growth.CXM system maintains enterprise memory by combining data like Client 360, activities, engagements, etc.
Employee (User) Experience
CRM adoption among employees/users is challenging. Account teams often wonder, “What’s in it for me?” While CRM provides visibility to leadership, it struggles to provide value for the actual users, i.e., the account managers.Successful CXM systems are designed to add value, simplify day-to-day task management, reduce tedious data entry and create essential utility for the account teams. For leadership, they provide visibility into account team activities and productivity.
Benchmark outcomes achieved by successful  implementation of CXM
CXM: Meet Your Customers’ Needs

Your customers deserve the best service. By combining CRM with CXM, your business will increase revenue, garner and retain new customers, increase credibility with existing customers and create lasting trust with your long-term relationships.

CuebridgeCX LLC, specializes in key account management and client engagement technology. CuebridgeCX offers out-of-the-box customer experience management (CXM) solutions and value-based go-to-market services. www.cuebridgecx.com

“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.