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Account-based marketing, Strategic account management process

ACCOUNT-BASED MARKETING FOR STRATEGIC ACCOUNTS

By Dominique Côté, Owner and Founder, Cosawi and Principal, The Summit Group and Kate Burda Owner and Founder, Kate & Co. and Principal, The Summit Group

With customer integration increasing, it creates additional complexity to build trustworthy relationships and partnerships. SAMs’ own organizations are evolving and often centralizing, adding more to the SAM’s plate not only in terms of skill set but also number of accounts, expectations for growth and required competencies.

SAMs are being stretched thin, from both a customer and internal perspective. Today’s SAM really does feel like she/he needs superpowers to do the job.

Complexity breeds ingenuity

We are living in a world of skyrocketing complexity and information overload, and one of the key pressure points that we see is the increased complexity and diversity of types of customer problems suppliers are asked to solve.

Facing more complex and broader issues, SAMs have no choice but to engage differently to differentiate themselves.

Living as we do in a world overloaded with data, we increasingly look to technology to help us deliver valuable, relevant customer hindsight, insight and foresight. But to do so requires better data management, including a mastery of how disparate data sources connect and communicate in order to translate this information into relevant customer insight and foresight.

As the closest person to the customer and the owner of the customer-supplier relationship, is the SAM or KAM alone with all of the demands wrought by the new economy? Hardly. Every superhero needs a partner, and the very best SAMs know when and how to bring the best people to the table to ideate, innovate and create impact for their customers.

Enter Marketing, stage left

As you read the word marketing, you may have thought of enterprise marketing, branding, positioning, awareness campaigns, advertisements or flashy public relations campaigns. Shifting to account-based marketing (ABM) isn’t any of these things.

So what is it, and why is it so critical in today’s world? Account-based marketing is the art of integrating digital marketing and the customer-buying journey to support, accelerate and be part of solution creation with the SAM and the SAM team.

Did you know that:

According to ITSMA, 75 percent of executives will read unsolicited marketing if it contains ideas relevant to their business.
Customers are twice as likely to engage when offers and communications are personalized (per Salesforce).
Seventy-four percent of B2B buyers conduct half of their research online before engaging a vendor (per Forrester).

Customer buying journey: Start at the point of inspiration, not the point of sale

In both Sales and Marketing, we work so hard on customer-centricity, customer focus and customer knowledge. Yet do we truly understand the customer’s buying journey – from the moment they realize a need for a product or service, to the point of purchase? What does that journey look like? What steps does the consumer go through before they even show up on the radar as a prospect?

If we can start engaging with the customer at the point of inspiration, rather than the point of sale, then we increase market share and share of wallet. What follows is a simple example.

Imagine that you have a company that manufactures soccer balls. At a point of sale, you are engaging with customers at the big-box sports store, sharing the shelf with 30 other soccer balls. You may have promotions, campaigns, advertisements and even public relations, but it is all happening when the customer is shopping for a soccer ball.

At the point of inspiration, on the other hand, you could be partnering with a technology company to create a portal to help coaches communicate with parents on tryouts, workouts and scheduling.

What’s the difference when your product is showing up in front of potential customers at the point when their child says, “I want to try out for the team?” At the point of inspiration, your potential customers are moving from being unaware to being aware. This can result in loyalty and market share gains at the earliest stage of the customer journey.

Hand-in-glove: The complementary roles of Marketing and Sales in this tight collaboration

SAMs traditionally are the experts identifying customer pain points and then creating solutions that address them, guiding customers through the steps of exploration, research, validation, purchase and, ultimately, advocacy.

Digital marketing can be the perfect complement early in the buying journey, offering the capability for scale and customization across market segments.

Done right, this can be a true customer-focused collaboration between Sales and Marketing. Working together to create a true understanding of the customer buying journey, the SAM offers customer knowledge and “careabouts,” while Marketing contributes data-driven insights that create a 360-degree view of the customer and the opportunity.

Together they can find “points of communication” that foster engagement with the customer and connecting opportunities with products, services, value enablers and partnerships to bring maximum value to what matters most to the customer.

Throughout the engagement, Marketing serves as the guardian of what we call “the cupboards,” i.e., your organization’s products, services and value enablers. Thanks to its broad view of the organization, Marketing can and should help the SAM to navigate internally, rallying internal assets that could potentially bring value to a specific account opportunity.

Being part of the account team from the early days, Marketing can also focus the co-creation process by finding alignment between the goals of customer and supplier, helping to arrive at the best package of solutions that address what matters most to your customer.

It can be a powerful tool to differentiate your company from your competitors and stave off commoditization.

Marketing can and should also boost confidence and provide credibility by creating business cases that help accelerate, scale and replicate the best, most innovative solutions from across the organization. Marketing can help not only to co-create (with the SAM team) communication points but also to monitor how they are performing.

“Get closer than ever to your customers. So close, in fact, you tell them what they need well before they realize it.”
Steve Jobs

This Venn Diagram illustrates how these two roles can work together to co-create value for the customer.

ABM in action: a semi-fictionalized example

Let’s say that Danielle is the strategic account manager for a large, international hotel company, and she is responsible for the company’s relationship with ContinUMotion, an athletic apparel company that has started developing a business division for sleep apparel and bedding. After taking a deeper look at how her own company might partner with ContinUMotion, Danielle realizes that this new division might offer the perfect opportunity to co-create a solution to enable ContinUMotion’s foray into bedding and sleep apparel.

Danielle knows that helping ContinUMotion gain exposure to new customers will help create a stronger business partnership with her customer, and so Danielle and her Marketing counterpart assemble an ABM-SAM roadmap. Her idea is to put ContinUMotion’s bedding line in the hotel’s concierge-level rooms, which would expose the hotel’s customers to its new product line. With this in mind, it is Marketing’s role to furnish Danielle with deep insights related to ContinUMotion.

First, they map out a buying journey that makes sense given the proposed solution, starting at the time someone books a room through the duration of their stay – even after they leave. Rather than looking at marketing campaigns that are at the point of purchase only, once SAM and Marketing chart the entire customer buying journey, they can create communication points that are relevant to that customer for each stage of the buying journey.

In this example, it could take the form of creating running maps that are co-branded with ContinUMotion and the hotel or pre-arrival offers to upgrade to a room with ContinUMotion bedding.

Figure 2 outlines what Marketing and the SAM can offer during each stage of the customer journey.

What the best do differently: Creating distinctive business value in today’s digital economy

Customization and personalization are key to gaining more market share and decreasing “switchability.” Customers no longer choose an offering because “everyone has one.” Instead, the conversation needs to be steered towards how a product or service has been made or adapted just for them. This has been true for a while now in B2C, and it is becoming increasingly so in B2B. Everything is focused on personalization.

While SAMs are focused on the personalized engagement/overall relationship (market drivers, strategic goals, careabouts), both SAMs and Marketing need to be focused on crafting personalized solutions. Together, they have the potential to bring a better and differentiating customer experience using innovative frameworks like design thinking and others.

But it is difficult, if not impossible, to offer a personalized customer experience if organizations are not deeply connected with their customer’s buying journey. And it is difficult, if not impossible, to fully understand the customer buying journey in the absence of this critical partnership between strategic accounts and Marketing.

Leveraging the full power of their function while tapping into the scientific mindset, marketers can analyze data to pinpoint opportunities to advance account plans and engage with customers. The magic lies in how they tell the value story using their brand, services and partnership as they would use Lego blocks to craft a personalized solution – an account-based solution – in a way that is engaging and consistent across all channels.

Whether the customer is online, on the phone or in a store, the story should always be consistent, enticing and shareable. We see the best organizations do these things as a team, coming together to provide the best customer experience.

While SAMs must function as the orchestrator of both the customer organization and their own internal account teams, the marketing team can help by participating in the development of joint scorecards that integrate the customer goals and KPIs, thereby demonstrating measurable impact on the customer’s business model.

The final word

In these disruptive times, where the SAM role is growing ever-more complex, the strategic accounts organization has a tremendous opportunity to leverage Marketing as their quarterback, especially when SAMs seek personalized, actionable insights and value solution alongside the customer decision-making journey.

Allow us to borrow an analogy from diving. The SAM is the explorer, diving deeply into the needs and goals of their accounts. But in order to deep dive, they need air from their counterparts in Marketing in the form of analytics, business cases and data-based insights. The only path forward is to take the plunge…together.

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Three Awesome Tips to Improve your Client Relationships and Results

1. Spend more time thinking or executing on those higher-value activities with the client

This is where the give-to-get technique comes in. Think through your client needs. What aspects of your expertise are they missing? Where do they need to think about a new way of doing something? Where would they benefit from a new service you offer? What things should they be thinking about in six months that they aren’t thinking about now? With the give-to-get approach, you’re not trying to get married on the first date. Instead, you’re figuring out the next fun date you can go on. This has a much higher chance of acceptance and takes most of the pressure off you and your team. Once you’ve answered these questions, think about this: What two-hour working session could an expert from your company lead for the client – without extra charge – that would accomplish the following three things?

It’s relatively easy for you to prepare for and conduct the session.
The client would find it valuable and would be excited about it.
It would expose the client to the need for further exploration of the concept, thus leading to the next step.

Don’t focus on selling something to the client. Instead, worry about how you can be helpful to them.

If you do that, you’ll add value and create goodwill. And if the give-to-get idea is strong enough, you’ll elevate your relationships by getting higher-level clients involved with the meeting. For most of our clients’ industries, the give-to-get will lead to what we call a paid selling effort, i.e., a pilot or “test” rollout. The give-to-get concept should be designed to lead to the paid selling effort. And if the pilot goes well, the client will typically want to hire you for the entire additional solution, i.e., whatever your “Big Project” is.

Examples of Great Give-to-Gets:

Great give-to-gets vary by industry and service offering, but here are a few we’ve seen work very effectively:

Monthly new-idea meetings. Setting up monthly meetings geared toward the needs of the client and the ideas you want to expose them to, and including experts from your company, can set up what one of our clients calls “an annuity of goodwill.”

Training on a hot topic. Picking an area of expertise that your client wants to learn about that also creates exposure to new needs you can fulfill can be an awesome give-to-get. Billing the meeting as “training” can let you invite a larger number of people and elevate your relationships to higher levels.

No-cost analysis. Offering a detailed, technical analysis of a new process, service or strategic approach is a great way to help the client better understand what can and can’t be done with a new approach. Those who hold data have power and helping your client understand a complex financial scenario (with your data) can be very beneficial and can get the attention of those above your day-to-day contacts.

Networking. Introducing your client to people they’d like to meet can be a great give-to-get. It’s especially effective when you can introduce a client that is considering one of your service offerings to another client that is a raving fan of that service. Then, the prospective client will learn from the other client’s experiences, and they are likely to jointly talk about their success with the offering. Everyone wins in different ways.

Strategy setting. One of our large healthcare clients is rolling out a no charge strategy-setting process to their benefits department clients. This is especially helpful to the clients because they would typically have to pay hundreds of thousands of dollars for this process if they hired a major consulting firm. It’s helpful to the healthcare company because they can have a direct relationship with the decision makers and bypass the typical benefits-consultant community. By facilitating the strategy, the healthcare company will learn the needs and direction of their main buyer in a much deeper and more intimate way. This puts them in the driver’s seat to create demand.

Benchmarking. Another great give-to-get is benchmarking. We’ve had several clients collect data across their client base and play that data back to the clients that participated in the process. This activity positions SAMs as expert advisors. Helping the client understand the data can lead to all kinds of interesting discussions and demand-creation.”

SAMA Resource: Bunnell, Mo, A Different Approach to Winning Add-On Business and Retaining Accounts: Helping. Velocity®, Vol. 17, Issue 1, 2015. http://events.strategicaccounts.org/dlpdf/velwin15_feature4.pdf

2. Convey to the customer that there is a lot more opportunity for both of you than just buy-sell transactions.

Both sides have all sorts of different needs, priorities and stakeholders, each with different perspectives and expertise that need to be brought to the table. So the question becomes, how do we as the SAM and the SRM [Supplier Relationship Manager] come together to get the alignment in each of our organizations such that we’re working together more as strategic partners than as a vendor selling stuff to a customer who’s simply making a transactional purchase?

Set up a cadence for account management

What we’ve seen some of the best and most mature SAMs do is figure out a way to set up a cadence for their account management, though contract negotiations might be happening on an annual basis. What they’re doing is performing regular joint business reviews that don’t just look at their own individual supplier performance – i.e., “How well are we doing delivering what we agreed on?” – but look in a multifaceted way at how they’re delivering on the strategic objectives they had for this relationship; how they’re delivering the expected value; and how they’re doing in creating the kind of relationship together that enables the transfer of that value back and forth in an efficient and an effective sort of way.

These mature SAM organizations are demonstrating tremendous value through regular business reviews, and when negotiation time comes, there are no questions about the value they’ve provided. It’s about, “How can we deliver more of it?” And then they use that momentum to drive a level of joint business planning with the account and to jointly find more opportunities for collaborative innovation. Organizing in this way, and creating this sort of cadence activity, makes driving customer-supplier collaboration a systematic process rather than simply ad hoc one-offs.

3. When a sourcing department is acting as a gatekeeper, address the root cause of a customer’s resistance.

Sometimes you run into a procurement organization – and it’s usually a less sophisticated, less enlightened one – that sees its role as that of a gatekeeper. You could try to work around that group, though doing so carries its own risks and, ultimately, that is not the best approach. And realistically, you may indeed have some customers that are just not ready, willing or able to engage in a strategic partnership – at least not right now.

But often, when a SAM perceives that a sourcing department is acting as a gatekeeper, the sourcing people feel they’re guarding against what their supplier is trying to do. They say, “They’re talking about all the value they’re going to deliver, but they’re not willing to be held accountable.” A lot of times, that resistance on the customer side is, at root, a lack of trust between parties. And if that’s the case, you need to address the root cause. If there is initial resistance, it may have more to do with how they’ve felt taken advantage of in the past.

Don’t give up or get defensive. If you are really confident in your value proposition, put your money where your mouth is. Explore with your customer what kinds of KPIs and commercial terms you might jointly define and implement to increase their confidence that you can and will deliver the value that you’re promising.

SAMA Resource: Hughes, Jonathan and Chapnick, David, You Say You Want Collaboration? A Discussion with Vantage Partners of Key Trends in Customer-Supplier Partnerships. Velocity®, Vol. 18, Issue 1, 2016. https://events.strategicaccounts.org/dlpdf/velwin16_feature%205.pdf

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Alignment in four (not-so) easy steps

By Bernard Quancard,

SAMA President & CEO

The core of strategic account management is the strategic customer value process. Most of the time, the value packages a SAM proposes to a customer will involve the contribution of several business units and countries from across the enterprise, which is most often organized by product groups, business units (BUs) and geographies. Here we encounter one of the preeminent challenges of making SAM actually work, namely designing and delivering a value proposition that cuts across all silos of product groups, BUs and geographies. This is what we mean when we talk about internal alignment. (Similar issues can exist at the customer organization, but we’ll keep our focus on internal challenges here.)

SAMA research has shown, time and again, that there are four broad areas that explain the success or failure of a SAM initiative in overcoming the challenges of a siloed, or matrixed, organization. Incredibly, our research shows that as much as 40 percent of a company’s internal alignment success (or lack thereof) can be attributed to skills and competencies of its SAMs.

The other three critical factors responsible for internal alignment success are alignment processes and tools (20%), customer governance (20%) and human resources management systems, especially compensation systems (20%). We’ll start with alignment processes and tools, of which one stands out: the strategic account planning system and its resulting account plan execution.

Alignment processes and tools

For an example of successful account planning and execution, we can look at Johnson Controls, a global technology and industrial company that (among other things) provides products, services and solutions to optimize energy and operational efficiencies of buildings. With one of its strategic accounts, a national industry leader employing 199,000 people across nearly 300 sites, Johnson Controls realized its existing planning system failed to deliver a common vision or strategy to leverage the power of JCI’s entire company. The relationship was plagued by poor communication, a perception of poor delivery, inconsistent pricing across sites and overall poor relationship management. JCI found its solution in designing an effective account planning process, which served as a management tool to allow perfect execution across BUs and countries for the one global customer.

What was the solution to the poor alignment between JCI and its critically important customer? First, JCI established a SAM as a single point of contact with the customer and the key driver of an integrated account management strategy. It became his responsibility to develop an integrated account management plan to further strengthen the customer relationship, drive account growth and improve customer satisfaction. The SAM also became responsible for aligning the JCI account team with client A’s account team and for establishing a common vision and goals to meet the customer’s business objectives. So how did he tackle the job?

Step 1: assemble the team. Step 2: build the account plan. Step 3: organize joint planning sessions with client A.

As part of this planning session, JCI developed four key focus areas for both organizations: mutual value creation; alignment, namely fit between both companies in terms of goals, values and culture; relationships, meaning the degree to which both companies’ teams are able to work in a trust-based environment; and growth, meaning the increase in overall business value and volume, and results from collaboration, mutual innovation and joint planning.

Beyond the joint planning session, JCI organized a showcase visit for core personnel from the strategic account to visit JCI’s corporate offices for a series of discussions and visioning sessions on leveraging the full power of both organizations for future success. The key objectives of the showcase visit included improving the customer’s knowledge of JCI’s key offerings; aligning the two companies’ goals, values and culture; defining improvements in JCI’s support and relationship management; and improving the current buying process, including but not limited to the pricing model that had previously been inconsistent and ad hoc.

The business results were impressive and included improved customer satisfaction, profitable growth, pipeline growth, pipeline growth for new opportunities and improved operations efficiency and standardization. The new account planning system created disciplined alignment and disciplined execution, showcasing to the customer a significant and ongoing level of commitment to joint development processes, leveraging capabilities of both organizations to achieve remarkable outcomes.

Customer governance

Another incredibly powerful alignment system is customer governance, which allows companies to create a tailored “board of directors” to manage a specific strategic customer. This board of directors ideally is composed of the main stakeholders within the siloed organization, such as BU or country executives and corporate executives.

A very powerful business case comes from the Siemens customer governance organization.

For Seimens’ corporate strategic accounts, customers are segmented by industry sectors such as energy, food and beverage, healthcare, automotive and more. Each vertical has a designated market development board (MDB), and these boards have the following decision areas:

Decide the nomination and cancellation of the corporate strategic accounts
Approve the appointment of the corporate strategic account managers
Approve the strategic account business plan
Approve the project development teams assigned to major projects
Approve the quarterly established MDB scorecard, budget and resource allocation
Approve targets for the corporate strategic account managers and foster their training and coaching

When you look at the overall responsibility wielded by the MDBs, you understand that this is a powerful force for aligning the siloed organization and designing and delivering the customer value proposition.

Compensation systems

The final puzzle piece of successful internal alignment is human resource management and compensation systems. For years SAMA has been conducting highly rigorous compensation studies for national, strategic and global account managers. Time and again, the coherence between metrics/measurement of the SAMs and the compensation systems in place have been singled out as paramount in ensuring the alignment of the entire account team to customer commitments.

Strategic account management is a medium-term journey, so if the compensation of the SAM is 100 percent short-term focused (i.e., based on quarterly quotas) then we have an incoherence between metrics and compensation. To give another example of misaligned compensation, imagine a SAM managing a global customer with critical team members spread across the globe. If the team members in different geographies are compensated based on their local results, there’s a incoherence with the idea of managing the customer globally. For this reason it is critical that corporate executives and the corporate HR organization design specific compensation systems for strategic account managers that will be coherent, in terms of metrics and measurement, and that will incentivize the behavior and activities they wish to get from the SAM and the account team.

To sum it up, management systems process and organizational design that favors alignment – such as strategic account planning, customer governance entities and thoughtfully conceived compensation systems – are all critical elements for fostering alignment across the enterprise. But the most powerful lever to create the necessary internal alignment needed for SAM remains the leadership competency and skills of the strategic account manager.