Do You Know What Your Customers Want?

While most companies have a well-established account planning process in place, few include the critical step of involving customers, especially in the early stages when expectations are set (rather, they involve customers only toward the end when results are reviewed).

Leading companies, on the other hand, build their account planning process around customer involvement.  We've captured best practices from three companies that demonstrate how to include customers in the account planning process – ranging from a multi-day meeting to a ten-minute conversation.

I've included summaries of these practices below and I've ranked them from top-to-bottom in terms of the amount of effort required for both supplier and customer.

Cargill's Partnership Calibration Process: Suppliers often over-invest in customer relationships relative to the opportunity present.  In other words, despite our best effort, some customers are less willing to invest their own resources in the relationship.

To create an environment of open communication and level setting around mutual expectations, Cargill developed a multi-day offsite meeting for their most strategic customers.  The primary purpose of the meeting is to calibrate expectations on both sides of the table based on the perceived potential value that can be created by the relationship.

Only after this calibration do both sides jointly agree to the plan for the upcoming year, with agreed upon objectives, and mutual investments.

(SEC Members, check out this recap of our conversation with Cargill's sales leaders for more information on how they set mutual expectations with customers.)

Baker Hughes' Value-Creation Scorecard: We all have customer scorecards, right?  Well, few of us have a scorecard like the one Baker Hughes developed for their strategic accounts.  Baker Hughes developed a measurement and reporting system to show how they are meeting the objectives of critical stakeholders at the local, national, and global levels.

The primary purpose of these reports is to show, beyond the costs involved with the project, the value that Baker Hughes is providing (e.g., decreased downtime on the rig, health and safety improvements, etc).  The key to this practice is identifying the outcomes that stakeholders, particularly those who have impact over the buying decision, are working towards in their day-to-day jobs, and then matching up the reporting to show, definitively, how you are achieving these objectives in a competitively differentiated way.

CVS/Caremark's Customer-Weighted Performance Metrics:  CVS/Caremark developed a low effort and highly effective way to gauge customer prioritization of outcomes.  The key to this, of course, was not just asking what a customer wants, because which customer would not want more service at a lower price?  Rather, they share with customers key outcomes they likely want to achieve (e.g., order accuracy, issue resolution time, etc) and they ask two important questions.

1) What outcome is the customer expecting? In other words, do we actually have a good understanding of what the customer is looking for?  2) How important is that outcome to the customer?   And this is critical – CVS/Caremark asks the customer to prioritize those outcomes through a 100-penny exercise.  This not only gets the customer to identify what is most important, but also to show the relative differences among the outcomes the customer is looking to achieve.

Each of these practices is based on a structured approach to involving customers in the planning process; one that forces customers to make concessions in addition to demands.  The driving force behind these practices is to develop a dialogue with customers – one that focuses on mutual value creation instead of merely price-based concessions.  And from the experiences of these companies, it's best to surface this sooner rather than later.

SEC Members, visit our Account Planning topic center for more tools and resources on the account planning process.