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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Defining Strategic Account Management

Strategic Account Management is defined here as the process of creating and implementing relationships with selected customers based on a shared understanding of each customer’s business strategy.  Complex accounts can be “strategic” from two points of view.  First, they are strategically important to the vendor if they define leading-edge values to be delivered.  And second, the values delivered may be “strategic” to the customer in the sense described by Rackham and Devincentis, that is, they enable the customer to redefine the values delivered to their own customers. 

Strategic Account Management begins with understanding the customer’s business goals -- from the CEO’s perspective -- then follows the translation of these goals into specific strategic initiatives and processes which then become the vendor’s targets of opportunity.  The more closely the vendor can tie its solution to an element of the customer’s strategic architecture, the more important the potential bond between seller and customer.  Consider the following example:

Infrastructure Software, Inc. had developed a portfolio of software solutions that enabled businesses to rapidly and cost-effectively develop and deploy Internet-based businesses and web-enabled business processes. The value added from these solutions was based largely on the volume of transactions or the number of users that would eventually use the applications – in other words, the name of the sales and marketing game was to penetrate massive applications in very large accounts.The targets of opportunity of course were truly complex accounts: geographically dispersed, multiple decision makers, complex decision processes.

From their early experience with the product line, executives at Infrastructure had learned that their products had strategic value to customers.  Many of their large customers had made strategic commitments, either publicly or privately, to utilize new technologies to streamline business processes and to support new access channels for their customers.  Accordingly, time was of the essence in designing and deploying these new applications, and Infrastructure Software was one of the vendors who could help accelerate the process.  In designing the sales process, Infrastructure’s sales executives focused on the key strategic interests of their customers, e.g., the business results customers were trying to achieve, the strategic initiatives that were most critical to their success, and the competency gaps they were trying to fill.  Once Infrastructure’s sales team understood the prospect’s strategic interests and priorities, they went to work to identify the opportunities for which their products and their support services had the most dramatic impact on one or more of the customer’s strategic initiatives. 

When Infrastructure’s sales team presented these opportunities back to customers, they did so in a way that clearly demonstrated the connection between Infrastructure’s solutions and capabilities and the customer’s probability of success in mission-critical applications.  In many cases, Infrastructure’s competency in the design, integration and implementation of large-scale applications changed the way that Infrastructure’s customers conceptualized their approach and the values they were offering to their customers.

As the example suggests, Infrastructure was able to implement this approach with numerous clients over a period of time.  In fact, the company developed a repeatable process for connecting their products, services and competencies with a set of complex target accounts. In the following sections we identify some of the key principles and practices that enable companies to use the tools of business strategy in their sales and account management processes as well as some implications for firms who desire to use this approach.

Making Sales Truly Strategic: Elements of the Approach

Getting started with strategic account management involves a blending of methods and tools from the world of major account sales with tools of business strategy.  This can be a challenge since people skilled in strategy don’t always have a well-defined location in the organization.  Also, strategists often fail to survive downsizing efforts in hard times.  Even when they’re on-board, the strategy staff is unlikely to have sufficient critical mass to support an operational process like sales.  So for most organizations, finding strategy talent and melding it into a sales process is a key challenge.  However, as we will see, the payoff for bringing a strategic perspective to bear on sales opportunities is huge.  Following are some elements of the approach to strategic accounts that will challenge most sales organizations.

Gaining an Understanding of the Customer’s Business Strategy:  An important step in developing a strategic approach to complex accounts is to understand each account’s business strategy.  Only by breaking down the elements of the customer’s strategic architecture can the vendor identify opportunities where its solutions and competencies can help the customer advance most rapidly toward strategic objectives.  In the best case, this will include an identification of specific capability gaps recognized by the customer or strategic initiatives and milestones that the customer has targeted.  

This is a difficult task because companies rarely publish their business strategies and because putting together the pieces from the outside is just plain hard analytical work.  The good news is that business analysts and strategists who are experienced in preparing competitor profiles should be aware of where to find source materials that will help.  In addition, the only real requirement is a good framework and a good start.  Once the customer understands the vendor’s interest in having access to this information and non-disclosure agreements are in place, the vendor most likely will be able to see documents and conduct interviews as needed to complete the picture.

Developing Points of View about the Customer’s Industry and Business Issues: Vendors need to provide customers with good reasons to consider using their solutions and technologies and to jointly pursue initiatives that will add strategic value.  Customer executives want to understand the vendor’s vision of the future and how it matches up to their own vision.  Companies who can provide a compelling discussion about how their solutions fit into an evolving future scenario stand a good chance of being asked to partner with customers to co-create that vision of the future.  Returning to our earlier example, Infrastructure Software, Inc. was able to engage customers with well-reasoned points of view about the business values that are created when their Internet infrastructure solutions are fully implemented.

Developing and leading discussions that can sufficiently engage customer executives to re-think the future requires a combination of industry knowledge, product expertise, strategic thinking and creativity.  Internal sources for this kind of help would typically be managers involved in business development or in business or marketing planning.  External strategy consultants with proper expertise can help develop and articulate breakthrough ideas that are outside the box of current thinking. Again, the framework for the discussion is the first critical step, as the content will evolve through discussion internally and with customers.

Facilitating Executive-to-Executive Relationships and Commitments: A customer organization’s choice to enter a relationship that will bring strategic value is an executive-level decision almost by definition.  This means that customer executives will be decision-makers and that the vendor executives who match up will need to be closely involved in the selling process.  Obviously, vendor executives need to be on board with the points of view as described above; ideally they will co-create these perspectives and help lead the discussion.

Major account reps have experience in the processes and tactics required to bring key executives to the table. What’s different is that the conversation is not just about products and services to be delivered.  It’s about developing a relationship that involves a new kind of promise to the customer.  Only an executive with a broad understanding of not only the organization’s capabilities but also the existing commitments of resources supporting those capabilities can responsibly offer this kind of help.

Exploring the Potential for Sharing Various Aspects of Organizational Competency:  For vendors to gain insight into how their strategic capabilities could complement the capabilities of their customers, they must spend time walking in their customers’ shoes.  The starting point for this discussion is a sharing of business strategies on both sides of the table and then continuing with an exploration of how the customer is approaching key objectives and initiatives. This requires a level of communication that goes far beyond the typical sales conversation. 

Proven methods involve “day in the life” working sessions that explore the customer’s experience in trying to deliver more value to their own customers in product development, customer service, logistics, and other touch points.  Francis Gouillart and Frederick Sturdevant bring this approach to life in their best-selling HBR article “Spend a Day in the Life of Your Customer”.  The magic happens when individuals from the vendor organization hear first-hand the situation and aspirations of the customer as well as the frustrations inherent in the current approach.  A free exchange of ideas based on these kinds of deep insights will frequently lead to fruitful themes for collaboration.  Again, many of these methods are familiar to business and market strategists with experience in qualitative techniques for developing breakthrough customer insights.