Can You Say What Your Key Account Strategy Is?

You’d think that investing in our best customers would lead to easy growth.  They buy a ton from us already, so if we just partnered a little more strategically then we could grow even more, right?  If it were only that easy…

The VP of Sales at a technology company was complaining to me the other day that he went on a customer visit with a rep, and the rep kicked off the meeting by saying “I’ve got some good news – we’ve just selected you as one of our company’s strategic accounts!”  The customer replied “GREAT!  What does that mean?”  After the rep told them about their new dedicated account team and their strategic partner discount, the rep went back to business as usual, proceeding with the agenda from the previous meeting.

The VP said this moment caused him to do some soul searching. Is that really all our key accounts program amounts to?   We’re spending a lot of organizational resources and money in the hopes of a deeper relationship…shouldn’t we be holding the customer accountable for acting differently as a result?   After all, these resources aren’t free.  As he and I talked about that experience, we decided it all started with better defining and/or communicating your key accounts strategy.

What is the value proposition to sell our customers on joining our key accounts program? Granted, we’re investing more heavily in key accounts by giving them account teams, better pricing, priority to certain value-added services, and so on.  But we’re also asking for a lot in return from the customer – introductions to new parts of their business, networking with higher-level decision makers, time spent on account planning – and as a result, more sales opportunities.

From the customer’s perspective, what is the value to the customer of being deemed a “key account” at our organization?  Is it compelling enough of a reason to want them to invest the time and effort it takes to partner more strategically?  How will partnering with us more strategically help them grow their business?

If we can’t answer that question in a compelling way, we need to start there.

Let’s assume that we have answered that question though.  We’re not out of the woods yet…

Can you actually say what your strategy is?

That question (and the title of this blog post) comes from the title of an article published by the Harvard Business Review back in 2008 by David Collins and Michael Rukstad.  The authors look at company strategies and discuss how universal understanding of a company’s strategy can be the difference between growing and not growing.  Lack of a coherent strategy leads to disarray for both our coworkers and our customers.

The premise of the article is that “most executives cannot articulate the objective, scope, and advantage of their business in a simple statement.  If they can’t, neither can anyone else.” That same thinking can be applied to our key accounts strategy.  Can our executives articulate the objective, scope, and advantage to being a key account of our company?  What about everyone who interacts with our key accounts?  If we can’t quickly and consistently explain that to our customers, how can we expect the customer to know?

So, is that all?

Well, if we get the first two questions nailed, then the real fun can begin.  Once you have the value proposition in place, then you can start exploring other implications that come with disproportionately investing in a subset of customers, such as:

Are we sure the accounts we’re selecting for the program are the right customers to begin with?
Are we sure that the customers we’ve selected even want to be in our key accounts program?
How do we hold customers accountable for growing with us as we help them grow their business?
What happens if customers do not live up to their end of the bargain?

We’ll address those questions in future blog posts.  But in the meantime, what is your reaction to this article?  Does your organization struggle more with the actual key account value proposition?  Or is the bigger challenge communicating it to the customer in a clear, compelling way?