Why Strategic Account Management?
Most businesspeople recognize that “hell-on-earth” is when your product or service becomes a commodity in the marketplace. It is a grind or a race to the bottom and it can easily burn out great people. It's like quicksand that continues to pull an organization and its people down.
Moving your service or product out of the commodity position takes commitment to a strategic change, and discipline to adhere to a strategic plan - every time. It takes a belief in the differentiated value that your organization brings (if it does) and its overall worth. It also takes the total dedication of the organization's people to deliver, in a customer-centric culture.
A study of data by Atlanta-based Ask Forensics shows the level of risk that exists in B2B relationships. In their study, business leaders were given three options to evaluate the health of their relationship with their service provider: strong, vulnerable, or damaged.
7% responded as damaged while a full 78% responded as vulnerable. Even more interesting is their findings that more than 50% of the service providers were not aware their clients feel this way. This begs the question, what in the world is going on?
"Relationships are dynamic. Change is constant. There is simply no substitute for proactive and strategic behavior when engaged in B2B relationships. SAM leaders cannot take anything for granted."
What Is Strategic Account Management?
"If you have read any of my writings then you know I believe business is conducted by people, and people are the basis of mutually fruitful business relationships." - Ed Snowden
Words matter, and labeling the client as the “account” is a bit cold and impersonal. Who wants to be known as an “account”? If it were up to me, I would call it Strategic Partnership Development, or Strategic Client Management. In either case, the “SAM” title has caught on.
The SAM leader must first maintain a strong rapport with client key stakeholders based on professional credibility and trust. This does not mean to “be buddies” - they must have a keen understanding of the client’s business and what their goals are. The client must view the SAM leader as their partner, and an unvarnished voice in the office of the CEO of the company. In a healthy partnership, loyalty between the organization’s leaders should be evident in the way they respect, trust, and rely on one another.
"The primary goal of SAM is to ensure that the partnership between the company and the client is achieving “win-win” outcomes for both parties. And, that the partnership continues to be relevant, thriving, and growing."
SAM leaders must maintain a sharp focus on the critical categories of a partnership’s health. As the visual below illustrates, SAM leaders must maintain a sharp focus on three critical categories of a partnership’s health.
What Strategic Account Management IS NOT?
SAM leaders are not the “internal affairs” office of the organization. Their focus should be minimal (if any) on routine service issues. Instead, their energy is devoted to the overall strategy for maintaining “win-win” partnerships.
When I first became a SAM leader, the person who assigned me to the role said something that stayed with me over time. The company I represented provided food and nutrition management services to hospitals, universities, and other markets. Paraphrased, his comment was:
"If you find yourself overly focused on the length of cafeteria lines (in the retail food serving areas), then you're focused on the wrong thing. Others on the team should worry about this."
I once heard a story that perfectly illustrates strategic management thinking.
During an interview, a university president from a well-known American learning institution was asked if the enrollment rates at his school kept him awake at night. His reply was "No, the reputation of the university is what keeps me awake at night."
A SAM leader should have a broad and long view, not a short-term narrow view of the partnership. Their primary concern is the reputation of their company in the mind of the client’s key stakeholders, and its impact on maintaining a win-win partnership.
"It is imperative to continuously strategize about how the company can enhance the client’s brand and competitive position in the marketplace. And, in return, grow along the way – thus achieving a “win-win” outcome."
What is Meant by “Win-Win”?
When a new partnership is created, the parties should purposefully devote time to assure complete clarity of expectations, especially if the courtship (sales cycle) is conducted over a lengthy period.
"In TRUE NORTH© we call this a Partnership Charter - a documented agreement between the parties that aligns them to mutual success."
It is too easy for expectations to become cloudy, and for commitments or promises to be forgotten. It is also important to remember that client stakeholders may have their internal reputation or credibility on the line if they were pushing against internal opposition.
The SAM leader is responsible for facilitating a partnership “kick-off” meeting to reinforce the mutual understanding of what “Win-Win” looks like. In the complex partnership, the meeting begins with the parties co-authoring a charter or over-arching mission statement. Key Success Metrics should also be reviewed and recommitted to.
The meeting or retreat should also clearly delineate expectations and ground rules minimally for the key categories, outlined below. Consider the following example:
The Partnership Charter
Acme Real Estate Company and ABC Inc. have partnered to provide Valet Parking Services at Acme’s thirty-three office buildings in NYC. PURPOSE: The Valet Parking experience will enhance the overall image of these office complexes for existing and prospective tenants through the provision of safe, friendly, and efficient valet parking of both the employee and customer vehicles.
KEY MUTUAL SUCCESS METRICS: FINANCIAL: + Acme seeks $100K in annual savings, ABC achieves at least a 5% margin. + Acme recieves 1% discount for payment terms, Acme improves cashflow. + The parties share any financial under AND over performance. PERFORMANCE: + Customer Service Metrics are measured and over expectation is rewarded. + Acme enhances their brand and drives overall tenant satisfaction. + ABC is incentivised to drive innovation and service improvement.
PARTNERSHIP GOVERNANCE: ALIGNMENT: + Senior Leadership on both sides sign up to the Partnership Charter. + The Purpose, Values, Vision & Mission are memorialized. + The Mutual Measurements of Success are identified and central. BEHAVIORS: + The "Key Players" are identified on both sides of the partnership. + When they meet, the agenda, and measurement criteria. + Any variation from the Charter needs to be authorized by signatories.
Clarity of direction right from the start is essential to a long-term successful partnership. The governance team for the partnership should re-visit the Charter and Key Success Metrics a minimum of once annually and revise as needed.
Market landscapes change which drives changes in the client’s product or service, and what they need from your company. When people change in the client organization, as they invariably do, the SAM leader should be involved in reviewing the Partnership Charter with the new stakeholder.
Losing a client (if initiated by the client) should create grief inside your organization. If it does not, something is wrong with your organization’s culture. You have invested in your partnerships, and now you are being fired. It should hurt, and it certainly should be a red flag and cause for reflection.
"SAM leaders are acutely aware that it is far better to learn about issues before they fester, and deal with them expeditiously – as opposed to hearing about it later – and then having to deal with a competitor who is eager to exploit your weaknesses with your client."
SAM Culture and Deployment
SAM is a specialty position compared to a traditional Account Manager and often with a deep background of experience, level of seniority, and ability to navigate with understanding and empathy.
Not all organizations that provide a service or product have a SAM strategy that includes SAM positions dedicated to every client. Therefore, they must make decisions as to where to deploy the SAM resources.
They will typically segment their “accounts” by making specific value judgments. These judgments will take into consideration criteria such as the revenue generated; profit margins; growth potential; and client brand value in the marketplace. The overarching concept is that these accounts are highly valuable to the health of the organization, now and into the future. This is important because a healthy company is what you want, and all your clients should want.
When a company's clients are viewed by the company as not “valuable” should either be improved or terminated. If they do not add value to the business (however value is determined by the company), then they are an unnecessary drag on the company resources. It's likely, that you are not delivering full benefit (their “win”) to the client organization, and sadly draining energy away from your other valued partnerships. The worse result is the impact this has on your company's image in the marketplace. There is simply no “win” here for anyone, only loss. “Win-Win” is the only acceptable outcome.
I proffer that SAM should be a concept that everyone in the company understands and practices. It should be embedded into the company culture. Decisions that are made outside of a SAM philosophy tend to be shortsighted, transactional, and not always in the best interest of the partnership or the company. All organization leaders should be cognizant of the impact their decisions make on the strategic health of the partnership. For clients that do not have dedicated SAM leaders, those managing these clients should have training on the SAM concept.
"SAM is customer-centric and has a strategic positioning concept. It requires across-the-company understanding. This includes those that are not members of the SAM team. Everyone needs to understand how it fits into the company’s overall growth strategy."
Strategic Account Managers are Not Part of Sales or Operations
The Strategic Account Managers should be company representatives that “roam” freely inside all realms of the client’s organization in their portfolio.
They have established trust, rapport, and strong relationships with key client stakeholders that are independent of others in their own company. They regularly take a “health-reading” (or “position assessment”) of key clients’ feelings about the partnership. (Yes, I mean their feelings). They should always know where the partnership is positioned regarding “win-win” metric performance.
Effective SAM leaders are also keenly aware that humans, to a degree, are driven by their instincts and feelings in addition to empirical data. They pay attention to both subtle and obvious warning signals. They ask pertinent questions. They are fearless in the pursuit of hearing candid answers to their questions - even if they are not favorable. And looking for what is not being said. They realize the vital nature of early detection and do not avoid it. Like a physician that monitors the vital signs of a patient, or the sailboat captain that observes the weather conditions and their supply levels.
A basic responsibility of a SAM leader is to maintain current information on their clients, or a “Client Profile,” containing certain specific information. The Client Profile is fluid and needs to be updated as things change.
When engaging key stakeholders, the following are the types of questions a SAM leader should ask. (Using the same partnership example above between ACME Real Estate Company and ABC Inc).
What are you hearing about the new site manager that I should know about?
I understand you are pursuing an acquisition?
I am told the CEO has announced her retirement. Has her replacement been found? If so, where are they coming from?
We are trialing an innovative technology that will result in 5-7% labor savings, and we are searching for 3 trial sites – can you agree to be one?
We are about 24 months away from the expiration of our formal agreement. I would like to suggest we begin to discuss the next phase of our relationship now.
Can I schedule time with the appropriate parties from both our organizations?
"The SAM leader realizes the vital nature of early detection, and they do not avoid it. In fact, they are constantly taking the temperature of the client stakeholders. They listen acutely to what is being said and watch carefully for what is not being said."
The SAM Leader Inside Their Own Organization
The SAM leader should be appropriately positioned at the right hierarchal “level” of the organization – like title and position signal authority to their teammates. It is important that the SAM concept and therefore the SAM team have the expressed support of the company senior leadership.
It strengthens the position of the SAM leader to perform in their role effectively. If this does not occur, their positive impact will be limited, and the resource is wasted. Not to mention there will be frustration with all involved, while potentially sending mixed signals to the client.
If the concept and the effort are not supported by leadership, then the SAM leader will be viewed as an internal watchdog, looking for failures, inside their own company. This may be the result of a lack of understanding of the purpose of the role, fear of exposing unpleasant issues, or both. Leadership must effectively communicate the purpose of the role.
SAM leaders must have the strong emotional intelligence to navigate natural human tendencies of defensiveness within their own company, even aggressive push-back. It is best they avoid “dancing” around sensitive issues; have the facts, and recognize reactions that are emotional and not based on substantive factual data.
SAM leaders must be open to alternate interpretations of the situation, and facts they may not have access to. The best path is a collaborative one. It is essential for the people in the organization to embrace the role, at the highest levels.
For the SAM team to be successful inside their own company, it is important that they meet basic qualifications.
Have experience IN the actual business
A Strategic Thinker
Authentic and Personable
Demonstrate Emotional Intelligence
SAM leaders absorb a tremendous amount of valuable information while doing their job. Organizations that are committed to the continuous pursuit of excellence as part of their DNA, always seek ways to differentiate themselves. Corporate leadership would be wise to ensure that SAM leaders are connected to all product development initiatives.
"Strategic Account Managers must have the complete support of the organization’s senior leaders, or it is a wasted resource."
SAM itself is a customer-centric strategic growth initiative, based completely on cultivating “win-win” partnerships. SAM team members and leaders must be senior members of the organization, recognized as strategic experts, and highly skilled in cultivating professional relationships. They are a highly valuable resource for the growth of the organization and should be compensated accordingly.
Winning better and retaining better business is driven by a changed mindset - the first step in changing behaviors is to change that mindset. TRUE NORTH© Strategic Partnerships & Growth Academy is a set of learning modules designed to actively engage participants and enable them to see themselves and your business differently.
TRUE NORTH© is the first step on your journey toward winning better and retaining better business.
Ed Snowden has 40+ years of experience leading strategic partnerships, retention, and growth with FORTUNE 500+ Companies. Along with Simon Elliot, Managing Partner of 4xi, Ed is the co-author of 4xi's Strategic Partnerships and Growth Academy, TRUE NORTH©.
TRUE NORTH© Strategic Partnerships & Growth Academy has been created on the foundation of decades of experience working with large organizations globally, winning better and retaining better business.
TRUE NORTH© is focused on helping sales and retention teams and is divided into 6 modules of in-person or virtual training and coaching, including:
1. TRUST: The foundation of Strategic Partnerships
2. PORTFOLIO: Assessing your current portfolio of business and/or opportunities
3. STRATEGIC ACCOUNT PLANS: Critical information into an actionable framework
4. COLLABORATIVE SOLUTIONING: The principles of solving client challenges
5. ARCHITECTURE OF PARTNERSHIP: How to set the stage for Strategic Partnership
6. GROWTH LEADERSHIP: Personal development for growth leaders
The 4xi team has decades of experience designing and implementing Strategic Partnership frameworks and strategies to help businesses win better, retain better business.
To learn more about TRUE NORTH©, email us at: firstname.lastname@example.org
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