Because no Strategic Account relationship has ever remained permanent, at least not in the mid to long term, it is good wisdom to take steps in knowing where things are when it comes to those relationships. Being an incumbent often means that you are always in the competitions’ crosshairs and with the accelerated speed of replication (aka copycats, generics, me-toos, etc) the cycle of commoditization has been shortened with reduced times between what you once had as an advantage (say a product or service) and when the competition makes its own version, with bigger and better features, or just better terms.
Coupled with the democratization of information on very many things that customers used to depend on account managers for, it means they can usually find and process information about the solutions they need with little or no inputs from external sources…..translated as the account team or the account manager NOT being in the know. The relationship risk, therefore, is that even with the best of intentions your Strategic Account may be taking steps to put you out of business without, well..intending it.
In this context, the periodic assessment of the state of Strategic Account relationships now become highly advisable (mandatory, if you will) though not commonly done. Our experience is that strategic account relationships
- Can grow stale and unproductive overtime
- Can abruptly terminate with just a moment’s notice
- Or can strengthen in a flash
In all the 3 scenarios above there are usually subtle changes happening within the Strategic Account which an agile account team or account manager should spot and interpret in order to protect the account from competition while continuing to deliver value to them. This is because strategic account relationships seldom lend well to being maintained in cruise-control mode. In fact, time-tested account management best-practices imply one should be wary of when the account relationship seems almost always rosy, requiring little or no efforts to maintain.
With Strategic Account relationships becoming more like climate change, many big-impact things are happening slowly but definitely in a direction that can throw your company up in positives or down in negatives (win or loss of new business, for example), it is therefore recommended that Account teams and Account managers take steps periodically to evaluate the state of their accounts in 3 core areas.
- Account Goals: This will involve looking at where you want to be with the account in the first place versus where they want to be with your organization. Though we have seen a few cases of Strategic Accounts initiating the establishment of strategic relationships with a supplier or service provider, the reverse is often more common, with suppliers and service providers initiating the move towards a Strategic Account relationship. This exercise, when conducted well, will help the Account team on the vendor or service provider side articulate what they want the account relationship to be and how they will achieve that, .i.e. through what kinds of value provided or co-created with the key accounts.
- Account Performance: This will usually evaluate the value you or your firm has provided to and also derived from the account in a defined period, say the last financial year. The one-sided model is to look at just the value your Strategic Account has provided you, but we recommend taking the full view of looking at what value you have also delivered to the account within a financial year. For instance;
- Have you helped them make more money?
- Win more business?
- Operate more efficiently?
- Reduce costs?
- Can these values delivered be quantifiable?
- Is there someone senior on the Strategic Account side that can testify to this value provided by your organization in writing?
Then take a look at the Topline and Bottomline impact for your organization based on the relationship within a reasonable recent timeframe. Have they helped you make more money and more margins for instance? Is your organization better off financially as a result of working with the Strategic Account?
- Relationship Status: Check the relationship temperature, especially with key people who are decision makers and budget holders within the Strategic Account. A good indicator for strategic account relationships headed downhill is that you no longer have access to C-level people (if you used to), your opinion is no longer sought for strategic decisions (if they used to seek you out first), or subtle things like your calls not being returned or emails not being responded to on time or even at all. Knowledge of and access to new people with authority and influence within the strategic account can also be a good indicator of where your relationship is with them. Often, strategic accounts left in cruise-control can have new powerful decision makers arrive on the scene and influence things away from an incumbent without notice.
Upon completing the evaluation using Account Goals, Account Performance, and Relationship Status, you can get a full view of the account relationship and where you need to reset things. Pressing the reset button can mean the account team or account manager approaching the strategic account and re-starting constant or scheduled meetings or reviews with key people to ensure that issues are dealt with and new opportunities discovered.
Resetting a strategic account relationship requires proper planning and coordination by the account team or account manager, supported by a well-articulated communications plan. The account team or account manager may also need to determine focused investments that can be made in the account in the short term to stimulate things and possibly provide the required impetus and relationship goodwill upon which to execute the rest of the reset tactical plan.
At the core of this exercise is having a well thought-out and fact-based Strategic Accounts Plan, with contributions from other teaming departments within your organization.
Check out our best selling workshops for Strategic Account Relationships
– Jan 25, 2018- Developing Winning Strategic Account Relationships
– March 9, 2018- Strategic Account Management Workshop