Do Your Key Customer Accounts Consider Your Organisation to be an ‘Ideal’ Supplier? Maybe it’s Time to Find Out! (Part II)

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Editor’s Note:  You can read Dr. Ted Marra’s Part 1 of Do Your Key Customer Accounts Consider Your Organisation to be an ‘Ideal’ Supplier? Maybe it’s Time to Find Out! here.

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If you read Part I of this short series, you saw five (5) critical success factors which I have found over the years are needed for your organisation to be perceived by your key customer accounts as an ‘ideal’ supplier.  These characteristics, as those in Part II,  have come from in-depth interviews with key accounts of some of the world’s largest global organisations such as Johnson & Johnson, Xerox, IBM, Shell, Royal Bank of Scotland and nearly 100 more – literally thousands of interviews.  In each case, at least three individuals were interviewed – sometimes more, but at least a minimum of three (3) – a key decision maker, a key decision influencer and users/user group as appropriate.  On occasion the CEO or Managing Director or other key leadership team personnel are included.

However, after all that intelligence gathering, there was incredible convergence on how key accounts defined an ‘ideal’ supplier.  Here now are the remaining five (5) critical success factors may be worth your time exploring and investing in for the future success of your organisation.

Your organisation has people who are state-of-the-art in their knowledge and application of products, services, support and technologies which your organisation offers

• So here we have another ‘people’ issue and we said in Part I, ‘people do make the difference’. However, what it means is that your organisation has an obligation to keep the learning curve of your people going upward on a continuous basis through training and development – to invest in them so they can contribute to their full potential.
• Let’s face it, technology can change at a rapid pace and it is easy to fall behind.  Sales personnel are only going to sell what they know and understand – that which is in their comfort zone.  If you give them something new in their ‘arsenal’ and they do not feel confident, the customer may not get what will ultimately best meet their requirements because the account manager or technical service representative  just doesn’t ‘get it’.  This can lead to dissatisfaction and possibly a complaint.
• Of course we also know that when revenues or market share starts to decline or sales of the latest product or technology miss the target, the last thing anyone looks at is whether people have all been properly trained.
  • Besides, we know that one of the first things that gets cut when business slows is training.  A bad decision any time – not just when times are bad.
• As harsh at it may seem, introduction of new technology and effective selling of that technology, when it meets true customer requirements, should be a measure of a key account manager’s capability – their performance.  And one has to realise that there will always be some key account managers that no matter what amount of training and coaching is done for them, they may still remain ‘clueless’. You will then have to make decisions about the future of these individuals.
  • When I developed the ‘Certified Auto Service’ for Goodyear – a program which remained the benchmark for service in the tire industry for 10 years nationally, it included the mandated use, for the first time, of computerized diagnostic equipment such as Hunter wheel alignment machines.  It turned out that about 20-35% , depending upon the geographic location, of repair technicians just could not learn how to use this equipment effectively.  These individuals had been in some cases affectionately called ‘shade tree mechanics’ – old school individuals that no matter how much we tried to help them they just couldn’t make the transition to the modern computerized equipment.  In the end these individuals were sent to an outplacement organisation in the hope that could find jobs elsewhere.
• As a ‘side note’, be aware that sometimes you get more than you bargained for. Too often organisations place ‘spiffs’ or ‘incentives’ on selling certain equipment – sometimes because they want to bring out a new version and clean the warehouse out of the old one.  Incentives can and do cause people to engage in ‘unnatural behaviour’.  If you incentivize then to sell certain equipment or products they will do it even if it means trying to put a square peg in a round hole.  In the end the customer discovers they have sold a ‘bill of goods’ and they complain resulting in a credit having to be given in many case and a loss of confidence in your organisation by the customer.
• At the INEL (Idaho National Energy Labs) – a consortium of Lockheed-Martin, Westinghouse and others along with the Department of Energy, the need for ‘technical competence’ and keeping their people on the leading edge of technology in their area of storage/disposal of toxic waste was a critical success factor.  Yet, when push came to shove, time and again sending people to key technical conference s to speak or participate or training and development both travel and training budgets continued to be slashed.  We know the half-life of technical knowledge is shrinking rapidly.  If one seeks a premature death to such a highly technical and specialized organisation, the best way to achieve it is by failure to invest in your people.
• In Pakistan, I had the opportunity to work with Parco – the state owned oil and gas company.  One of the senior Directors I interviewed in the course of my work there was responsible for pipeline technology.  He had been responsible for building the oil pipeline between Pakistan and the UAE under the Arabian Sea.  Beyond that he had years of other valuable experience.  Unfortunately he was soon to retire.  No one was being groomed to replace him.  All that valuable knowledge was just going to ‘walk out the door’.  And what about customers or partners who needed this knowledge? How was Parco going to provide it? The short answer was that they couldn’t and so some customers and potential partners were going to have to go elsewhere to satisfy their requirements. The unfortunate fact is that I have seen this phenomenon repeated over and over again in organisations around the globe.

Always having enough resources to service our account in the best way

• One of the problems I have seen in this area is simply that large customers such as Shell, Xerox, Johnson & Johnson, Royal Bank of Scotland Group, Apple, Amazon and the list goes on ‘expect’ that you have sufficient people in each of the customer experiences – sales, service (repair service, customer service, technical service), training, order fulfilment and more to ensure the people they need are available and easily accessible whenever they are needed.  Failure to meet those expectations will erode trust and confidence.  The customer will begin to question if they made the right decision to build a dependency on your organisation for meeting its needs. This can lead to customers splitting their requirements between multiple suppliers – giving you less of the proverbial pie.
• One issue that can feed the appearance of lack of resources is when account managers are given too many accounts and there is a failure to prioritise those accounts so that scheduling of time occurs where the benefits are most mutually beneficial. I have seen so many organisations who give their account managers so many accounts and such a diverse mix of accounts by industry, size or strategic importance, that not even superman on his best day could make the time to not only visit but spend quality time looking for ways to help the customer be more successful using your company’s products and services!
• This challenge is especially true for SME’s.  As an example, an SME here in Croatia – a former client and a best in class systems integrator and cloud technology company, started working with McDonalds.  In a short while McDonalds recognised how good they were and started giving them more work until one day they gave this company responsibility for McDonald’s entire information architecture worldwide with requests often coming several times a week for projects.  It was eating up the company and taking people away from work with other strategic clients.  In discussing the situation it was clear to me that McDonalds would very quickly absorb all of the organisation’s resources.  New talented people meeting specific and rigorous assessment criteria started being hired – but became increasing difficult to find – another problem.  However, as suggested, a separate internal pseudo division was established just for McDonalds.  The way we set it up was that those people in the organisation that had proven themselves the ‘best of the best’ with other strategic client assignments were gradually migrated to the McDonald’s Team.  Once they had learned and contributed on the advanced and challenging assignments of McDonalds, they were rotated back as team leaders, supervisors or first line managers on the other strategic account work – bringing with them valuable knowledge and experience they could use to transfer to the others they worked with and develop their capabilities.  In the process, the organisation doubled in size from about 100 to over 200 employees.
  • Having the right management systems in place was also essential to be able to grow this fast and not self-destruct – this work was carried out in parallel with the growth in demand by McDonalds for technical support.

Always being ‘proactive’ and ‘honest’ in dealing with problems, communication in general and providing solutions and new ideas

• If there is one thing that I have found time and again that absolutely irritates customer accounts, it is always the fact that suppliers wait until it is too late, after the fact – until the horse is out of the barn before alerting the customer account of a problem.  Consequently the customer account often has an unpleasant surprise and ends up having the burden placed on them to chase up the account manager or technical service organisation to find out what’s going on.
  • The expectation is that the supplier will have ‘preventive’ or even ‘predictive systems’ such as Xerox, Thomson Consumer Electronics or Cybernet (mobile telecom company in Karachi, Pakistan), Anglo-American had in place when I consulted or worked for them. The concepts are simple:
    • Catch the problem or issue while it was ‘in-house’ if at all possible and alert the customer as soon as possible to the situation – that way they, the customer, can put contingency plans in place such as notifying their customers of an impending situation such as a delay in receiving product. Customers say over and over, ‘Why do I always have to find the problem? Why doesn’t anyone ever call and warn me that there may be an issue, or that a system (e.g., telecommunications) may be developing a ‘fault’ which will lead to failure and loss of business on our part and an unpleasant surprise for our customers!’
    • In the case of ‘predictive’ systems, organisations look for patterns.  For example, at Xerox, new customers who made a certain number of calls to customer or technical services and/or a certain number of complaints were flagged in the system and contacted directly by telephone or in-person to allay their anxiety and reassure them – strengthen their confidence in Xerox
    • There are also ‘new product or service launch early warning systems’ utilised.  For some time this was done by certain auto manufacturers by linking their repair and warranty systems with those of the key and highest volume car dealerships.  By obtaining rapid and high volume, high quality feedback from these key ‘sensing’ points or dealerships, they could quickly make running changes as needed. This approach can work in any industry such as consumer electronics, white goods or mobile phone handsets.
    • The sad fact, after years of consulting with organisations such as Knauf or Anglo-American (Tarmac in the U.K.), Siemens Telecommunications and others, is that all too often, even when the organisation did not have the products in stock that the customer wanted and ordered, he or she was told that they were in stock – bold faced lies to avoid losing the business to a competitor.  Yet, little thought was being given to the consequences of ‘over-promising and under-delivering’ namely the damage to trust and confidence which is exceedingly difficult to repair and the negative word-of-mouth spread by the customer and potential reduction in purchases in the future.  Honesty is always the best policy – even if it hurts. Better to have short-term pain for longer term gain.  But too often many sales personnel feel the pressure to perform – to get the incentives, bonuses and recognition. These types of financial ‘spiffs’ can cause sales personnel (and others) as said above to perform ‘unnatural acts’ and damage customer relationships in the process.
      • I have heard customers say to me, ‘sales should be selling me what I need, not what they want to sell me’ to achieve their targets or meet their forecasts.
  • And how many times I have heard customers tell me, ‘I wish just once my sales rep would give me a new idea or suggestion to help my business instead of just looking for an order or not understanding our business well enough or having the competencies necessary to bring us good ideas.

Understands our business and what makes it unique better than the competition

• The greatest compliment an account manager can be given is to be told ‘You are one of us’ – in other words, you could come to work here tomorrow and fit right in – hit the ground running because you know and understand our organisation so well.
• So much of it is about ‘listening and learning’ – spending 80% of your time in an active listening mode to understand the decision process, what your key contacts are on the ‘hook’ for – how you can help them be a superstar, bring suggestions that really reflect you understand their business and market (customers and competition), know the key decision makers, key decision influencers, users/user groups, supply chain, products, services, support and their organisational structure for starters.
  • To reach your full potential for success in any account you must be perceived – must be seen as being a more valuable resource, solutions provider, trusted advisor and business partner than your competitors
• To do this properly, sales management must transform into relationship management – they must gain competencies in ‘relationship mastery’. The fact is that by building a secure relationship with your key customer accounts, the business will come – it will grow.
  • In my opinion, sales should have a 20% focus on ‘getting the business’ and an 80% focus on ‘keeping the business and ensuring it grows profitably’.  Unfortunately, for too many, ‘getting the business’ becomes 80% of the focus and the 20% related to ‘keeping the business’ is seen as the time required to chase problems and complaints.  This is just plain wrong!
• As an aside, what I have seen time and again is that ‘sales related problems’ are far more lethal to the relationship your organisation has with its customers than any other including delivery,  training, invoicing, technical support or others.
  • In fact the top three most lethal sales related issues are the following from my experience in hundreds of organisations around the world:
    • #1: Not promptly returning telephone calls or emails from customers which communicates to the customer that they are not important – a bad message in any industry or country around the globe
    • #2: Making commitments and not keeping them – damaging trust and confidence which is exceeding difficult and time consuming to rebuild
    • #3: Not meeting my requirements – namely, selling me something I really didn’t need – it wasn’t the right product let alone the right solution!
      • This happens when sales reps have not received proper training so they are unfamiliar with or uncomfortable with the newest technologies or models – so they peddle what they know, but this may not be the best solution for the customer’s requirement
      • It happens also when incentives are placed on certain products or services so that sales reps can have tendency to ‘go for the money’ and not being ‘an advocate for the customer’. They try instead to put a square peg in a round hole where the customer is concerned.  In the end, the cost to your company could be quite significant as customer requirements are compromised

Your organisation works as a team internally and with us, your customer

• In case you didn’t notice, customers aren’t dumb. They pick up on the fact, pretty quickly, that you are communicating effectively internally within your company or not.  All it takes is a few visits from different individuals in your organisation and/or telephone calls to your organisation to realise that the ‘left hand does not know what the right hand is doing’. Quite frankly this phenomenon immediately throws up a flag in the customer’s mind and a sense of worry that things of importance or urgency could ‘slip through a crack especially when coordination and collaboration within the supplier organisation – your organisation, is critical to their business success.
  • I distinctly recall three organisations, DuPont, Nortel and ABN Amro Bank which I consulted to for some time.  These organisations had, as their single most challenging issue, nothing short of what could be termed ‘open warfare’ internally between functional and divisional organisations which included, of course, political power plays and some dirty tricks from time to time.  Unfortunately, in each case, it was the customer who was compromised in all the battling on issues as simple as ‘who pays’, finger pointing/blame activities, refusal to communicate and the list went on.
  • Again, it does not take customers long to figure out what is going on – or ‘not going on’ within a supplier organisation.  A word here or there from employees of the supplier organisation – your organisation – when at the customer’s site or over the telephone start putting the puzzle pieces together explaining why the supplier – your organisation –  is not being responsive to them – the customer. As the alarm bell begins to sound in the customer’s organisation because their customers are not getting what they need either, other providers – the competitors are being examined more closely as being a safer bet. In the end your organisation loses.
  • Customers really appreciate it when they are made to feel like they are ‘part of the team’ – when there is open, free and honest sharing of information between all parties – when there is ‘transparency’ – departments, functions, divisions – everyone becomes part of ‘all one team’ working together – communicating, coordinating and collaborating as well as having the motivation to do so. This is when good things happen and relationships are strengthened.

There are excellent working relationships with our organisation (the customer) at all levels

• This is a very critical factor for success.  It is what I call ‘organisational alignment’- making sure that at every level, your organisation and the customer’s organisation are aligned
  • This means that someone in your organisation is accountable for a peer relationship in the customer organisation – for maintaining and strengthening that relationship.
  • It means that once per month (unless there is a special situation developing), all individuals in your organisation that have that accountability get together for a short stand-up meeting and share the latest news of any developments, progress, success or challenges. Actions are then planned, ownership is assigned and carried out as needed.
  • It also means that once per quarter or twice per year a Relationship review occurs. I have found that it is best to have this done by a neutral party – whether internal to your organisation or a 3^rd party from outside your organisation.  Over the past 20-25 years I have evolved this process to where it is now extremely valuable and is based upon four (4) key components:
    1. Asking the customer to look ahead – be futures oriented and share what they see coming in the next 18 months to 3 years – changes, emerging trends and key factors for future success
    2. Asking how you compare to other suppliers they use – who is the best and why, what you need to do to become the best and all the while gaining valuable competitive intelligence
    3. Asking for their candid view of the quality of the relationship with your organisation and its people
    4. Asking them to rate your organisation on the key characteristics that you have learned are their ‘hot buttons’ – the things most important to them – scoring you on a 1-5 scale on each where 1=poor and 5= excellent and also indicating whether they have seen any improvement or decline in any of these areas since the last review.
    5. This review represents powerful qualitative research and trumps quantitative research every time for strengthening relationships
    6. The Team accountable for this customer must then review the feedback and develop an action plan and communicate and gain agreement with the customer
• Here is an example from a previous client of some years ago – Huhtamaki, one of the world’s largest maker of paper and plastic disposables with headquarters in Helsinki.  I worked with their UK operation for many years.  The chart below indicates how the alignment was structured:

BCS was one of Huhtamaki’s key strategic accounts.  MD refers to ‘Managing Director’.  I won’t go into any more detail on this except to emphasize that many people in Huhtamaki had a role to play in managing this account and ensuring an exceptional relationship was maintained. Every key decision maker, decision influencer or other key department of the customer had someone from Huhtamaki who had responsibility for maintaining the relationship. This is not the only way it can be done.  For example, a slightly different approach was utilised for Johnson & Johnson and some of their key national distributors.  But the concept remains unchanged and powerful. In this latter example of J&J, the issue was how do you build such an exceptional relationship – add so much value, that the distributor wants to work harder for your organisation and moving its products than it does for competitors who also use that distributor.

Once again, I would suggest that the leadership team of your organisation and any others relevant to the discussion rate your organisation in each of these areas.  See where there are differences of opinion and where there is convergence.  Discuss the differences and work toward defining ‘reality.  Then test this with at least 3 of your key customer accounts – possibly including one which is not so happy with your performance and see where you make the grade.

Use a 1-5 scale to keep it simple – a quality scale where 1-poor and 5-excellent when doing this with the leadership team and the key accounts.  Ask yourselves what is required to become a ‘5’ in each of these 10 criteria and then create and action plan, establish ownership and execute – monitoring progress from both an organisational perspective as well as a customer perspective, e.g., has the customer account noticed any changes?

I hope that Part II also added some value and provided a few ideas to think about as you consider the quality of the relationships you have with your key strategic customer accounts!  Best wishes for success!

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