Driving Growth through Strategic Account Management - Using the Tools of Business Strategy to Sell and Maintain Complex Accounts

James W. Wilson

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Introduction

Here’s a question that keeps many corporate Executive Vice Presidents (EVP) of Sales up at night: "How can we improve our effectiveness with large, complex accounts?" 

The targets are huge, i.e., the Fortune 200 and Global 500 companies that account for a substantial share of total market potential.  Most product and service vendors of any size count these very large accounts as customers or prospects and address the market segment as national, major, or enterprise accounts.  Unfortunately for most vendors, the difficulties of doing business with these accounts largely offset the rewards.  Complex accounts present a litany of headaches as they:

• tend to be geographically dispersed
• have multiple-decision makers
• have complicated decision processes
• require pricing concessions owing to volume
• demand high levels of operational and customer service

Sales organizations face severe challenges in attempting to sell and manage complex accounts.  Many firms have established a separate sales force to manage selected large accounts and have left the general field sales force in place to cover smaller accounts on a geographic basis.  While this approach helps to focus sales representatives on the appropriate activities for their assigned accounts, it adds a layer of cost and still leaves open the question of how the major account representatives can be most effective.  For example, in the typical situation, geographically-based representatives who call on local facilities and business units of major accounts have compensation heavily weighted to near-term revenue generation and have little visibility into account activities and relationships outside of their home territories.  This can be very frustrating for the major account representative who is trying to orchestrate a team approach to a complex account.  But despite these difficulties, which may drive account profitability into negative territory, many product and service vendors continue to play the game.  The prestige, experience and volume to be gained by serving the world’s leading companies are just too tempting to pass up.

So how can companies be more effective in selling and maintaining complex accounts?  This article offers an approach to deriving more value from relationships with a firm’s largest and most complex accounts that leverages the tools and thought-processes of business strategists.

Much has been written on the subject of complex accounts with Robert Miller and Stephen Heiman’s Strategic Selling probably the most widely-recognized approach.  Despite its success and popularity, the approach known as “strategic selling” is necessary but not sufficient for exceptional performance in complex accounts.  The opportunity is to infuse strategy into the content of the account relationship as well as the process of the sale.  And while making no claim to have found the magic bullet sales process for complex accounts, it is suggested here that many of the approaches and tools of the business strategist can be successfully re-purposed to make strategic selling truly strategic.

The Role of Strategy in Sales

In the business literature, the terms “strategy” and “sales” often appear as part of the same concept.  In Miller & Heiman’s strategic selling approach, which has been used successfully to train thousands of sales reps and sales managers, strategy is about a long-term, customer-centered view of success as opposed to an over-emphasis on near-term tactics which can set up a win-lose situation for seller and buyer.  “Strategic selling” provides a disciplined approach to defining account objectives, understanding current positioning in the account, then undertaking a series of analytical steps to create an action plan for improving the account position.  Much of the content focuses on battle-tested methods to identify and properly address the various influencers and decision makers in large, complex accounts.  The primary analogy is a military campaign that requires elaborate planning and implementation to achieve success.  To summarize, strategic selling as defined by Miller-Heiman is primarily a strategic approach to the sales process.

Others who have addressed sales for complex accounts take a more advanced view of strategy.  In their book Rethinking the Sales Force, Neil Rackham and John Devincentis offer a redefinition of selling aimed at creating and capturing customer value.  The authors present a segmentation model for complex accounts which differentiates “strategic value customers” as a target of opportunity.  As the authors define it:

“Strategic value customers demand an extraordinary level of value creation.  They want more than the supplier’s products or its advice.  They also want to deeply leverage the supplier’s core competencies.  They are prepared to make radical changes in their own organization and its strategies to get the best from their relationship with their chosen strategic supplier.  It’s a relationship between business equals who are working together to create an extraordinary level of new value that neither could create alone.”

 This begins to sound a lot more interesting from the standpoint of strategy.  What could be more “strategic” in a sales process than collaborating with a customer to combine capabilities to create new kinds of values for their customers?  And what does one call a sales process that is designed to create these kinds of relationships and deliver these kinds of values?  It certainly does not sound like “strategic selling”.  We’re no longer talking about being strategic in the way you sell.  Rather, this is about being strategic in the way you envision and create a customer relationship.