That was the question the VP of Sales & Marketing of an innovative specialty chemicals producer was asking himself.
In an expanding market segment where a handful of customers hold significant market share, the company had established dominance in a key product segment. However, their account penetration had stalled, and the entry of new competitors threatened account erosion, foreshadowing a downward trajectory. The VP sought our help to address the dilemma.Managing large accounts is no easy feat. The internal decision-making process within these accounts can be fragmented and slow, making it difficult for companies to navigate and drive growth. Companies with several large accounts usually commit to establish special selling capabilities to effectively manage these customers. Commonly, companies that implement a key account program establish cross-functional teams to focus on each large account, led by experienced senior sales representatives.
Of the 6 capabilities we see as critical for effective Large Account Management[Fig. 1], we often see teams that tend to excel in only a few capabilities. These commonly include: developing 1:1 functional relationships with customers, gathering account intelligence, and reliably servicing existing business[Fig. 2]. This is very understandable since most companies systems are heavily oriented to selling and servicing existing business.
While focusing on existing business is vital, it can also become a comfort zone for organizations, and many companies struggle when it comes to generating growth with key accounts.
To drive growth with strategic customers, an enhanced approach is needed. We see additional capabilities needed to enable the company to identify growth opportunities and mobilize organizational resources against them[Fig. 3].
Teams must develop a mature perspective of their customer's market, taking into account the customer's strategy, market dynamics, and competitive landscape. This assessment allows them to formulate a clear understanding of what is critical to the customer's success. This perspective can sometimes differ from the customer’s stated strategy, and it may require time and unique resources to gather the necessary market intelligence and conduct thorough analysis.
Having a focused account strategy is crucial. It involves determining how the company's capabilities can uniquely help the customer achieve their strategic objectives. This requires analyzing both the customer's strengths and weaknesses, as well as the company's own capabilities. Often, account teams lack the skills to develop a quality account strategy, resulting in one-size-fits-all plans or sales-heavy tactical plans that don’t drive growth effectively.
Treating growth opportunities as separate projects is essential. These opportunities often differ from core business and may require additional investments and dedicated teams. Unfortunately, many companies lack the necessary systems and processes to support such initiatives. As a result, many efforts stall for the internal campaigning necessary to ensure the required resources and attention are allocated.
After reviewing our assessment of the company's current systems and processes, the VP realized that his teams were investing significant time in servicing existing business, thereby limiting their focus to a few growth opportunities. Armed with this insight, the VP kicked off initiatives to deepen the company’s market perspective and the quality of account strategies developed by the teams, with the goal of improving identification of and allocation of resources to the most promising growth opportunities.