A couple of years ago, I wrote an internal white paper that proposed a strategy for handling our largest accounts. The objective was to agree a strategy designed to build confidence, develop advocacy, create dependence and build trust so that we can create demand and achieve dominance within these accounts.
We defined a major account as an account where we can reasonably expect to make at least $1M revenue in any one calendar year. We had set a target to create 12 Named Accounts by the end of the year and were a long way from achieving this goal.
The answer was relatively simple. Landing any new account is hard, costly work. Landing $1M+ deals in new accounts is a huge challenge for a relatively small firm. If we over sell or under deliver we have wasted all that effort. We needed to sell in a way that leads to trust and repeat business. Trust doesn’t happen by chance or because we have a team of “heroes” – it happens as a result of a defined, repeatable, scaleable process.
Clearly, high-level executive relationships can be leveraged to gain entry into a large account. However, unless the initial project runs smoothly and the account is managed carefully, the likelihood is that repeat business will be hard to come by and the executive relationship will be put under strain.
Penetration occurs through demand reaction or demand creation. Demand reaction is the response to an external event, for example, responding to an RFP. Demand creation in a new account means gaining access to an Executive Sponsor, finding an emotional or political issue and linking your solution or capabilities to it. Every effort must then be made to support the efforts of the Executive Sponsor to sell your solution inside his organisation. A powerful executive sponsor and strong relationship will increase the chances of success.
Executive Selling is a lead generation activity and is a good example of demand creation in an account. However, even when the initial penetration comes from strong, high-level Executive Selling activity, how often do you penetrate a new account and land a $1M deal at the same time?
Earning the Right
The primary need is to ensure your teams performance makes your Exec Sponsor look good for having backed you in the first place. The first hurdle is to demonstrate that you can meet and exceed your client’s expectations. This means you must have a system for documenting the tangible and intangible value delivered and a process for proactively claiming the benefits. An often used and powerful strategy is to flip the bid team into the delivery team to maintain continuity.
How many of your accounts can you easily articulate the metrics, key performance indicators and ROI that you have delivered?
Aside from convincing your Exec sponsor and providing the ammunition for him become an advocate for your services within the account, a further benefit of the ability to articulate the benefits delivered is as ammunition for building anecdotes for use when selling to other prospects.
Identifying potential Major Accounts
Large accounts can be very profitable but aren’t always a good investment. Knowing which accounts to invest scarce, valuable resources in is challenging. You need to learn to evaluate your relationships and past performance with an account to determine if you are likely to build Executive trust. For the process to be repeatable and scaleable, the evaluation needs to be based on objective rather than subjective, emotional criteria. You also need to learn to understand how the customer buys. If they rely on the RFP process then you will always be in a competitive selling situation. However, if you can achieve a state whereby you are pre-emptively writing the RFP/requirements for the client you have achieved trusted partner status.
You have penetrated the account, earned the right by delivering beyond expectations, and made your Exec sponsor look good. What next? Your strategy needs to allow you to leverage the initial success to navigate to the next opportunity. Radiating starts after the first win NOT the first delivery. Slippage in delivery is often unavoidable and it must not be allowed to impact up-sell. If you fail at this point you are back outside, passively waiting for the next RFP. The key is to initiate sponsorship from one satisfied Exec to another and by doing so you change from a bottom up approach to a top down approach. The two greatest barriers to radiating an account are the lack of a proactive account plan and the lack of an experienced Account Manager. Almost invariably, successful sales “Hunters” do not make successful Account Managers.
Achieving Insider Status
How do you elevate your value proposition to “strategically differentiated”? How do you elevate your relationships from rapport to trust? Insider status is achieved by delivering industry expertise and by aligning yourself to qualitative issues at the Exec level. This spawns opportunities to collaborate; to deliver managed services; to consult and to help solve strategic issues for the client. At the same time, you lower risk and create a competitive advantage through your inside knowledge of their company and how to get things done in their organisation. Vertically focused account management teams have a stronger chance of achieving insider status.
Creating Inertia within the Account
You dominate an account when you outperform their expectations and remove the need for them to go to the competition. Inertia is achieved when you are included in their planning cycle such that you start the year knowing their critical success factors and key project inventory. Account inertia increases as the tendency for the account to stay with your company increases. To develop this inertia you need to generate loyalty. Loyalty is an emotion. Accounts are not loyal; people in the account are loyal and they will develop loyalty to their account manager and his team if they ensure high quality delivery.
Proposed Major Account Strategy
Investing in account management is expensive. For an account to qualify as a Major Account you must be sure the investment in an account management team is worthwhile. I suggest that for an account to qualify, your Sales or Business Development Exec for the account should:
- Provide an org chart and a short précis describing the account, their main areas of business, their financial performance (including P&L, Balance Sheet, Audited Accounts, etc.)
- Demonstrate at least one successfully completed project and articulate the project metrics, key performance indicators and ROI delivered to the account or be able to detail the wider play and demonstrate traction with the shaping of it.
- Name at least one key Exec Sponsor within the account and describe his remit, position in the organisation and relationships with other key executives.
- Articulate at least one additional opportunity in the account and a strategic plan for achieving $1M revenue.
- Outline a set of tactical actions designed to build confidence, develop advocacy, create dependence and build trust
Once an account has qualified as a Major Account you should build an Account Management Team comprised of:
- An Internal Sponsor responsible for the strategic Exec to Exec relationships with the account.
- An Account Manager responsible for tactically radiating the account, achieving insider status and creating inertia within the account.
- A Project Manager responsible for delivery performance. All delivery teams will report to the Project Manager.
- As the account grows you should consider adding Subject Matter Expertise with industry or vertical market expertise.
Building the strategic plan should be the responsibility of the Account Manager but ownership is jointly held by the entire Account Management Team. The Internal Sponsor should meet with the Account Management Team weekly to track progress against the strategic plan for the account and will be ultimately responsible for ensuring accurate records are kept concerning account activity and for reporting status on a regular Major Account call.
For the Account Management Team to be focused and successful they will need a different quota, goaling and remuneration model from the Hunters tasked with landing new business.
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