Large accounts make up a significant portion of business for most B2B companies. Therefore, losing an important customer can have detrimental effects on the organization. The significance of key accounts is urging top B2B companies to revisit their key account management approaches. Additionally, the increasing level of sophistication of the purchase process being adopted—such as, centralized procurement, competitive bidding and auctions, and laborious negotiations—by large buyers is a crucial element for B2B companies to consider to win large accounts.
Studies have shown that large buyers suggest price, product features, and reliability as the most important factors in their purchasing decisions, even more so than sales and service experience. However, detailed analysis of data into the actual purchasing decisions by buyers reveal that suppliers’ service and support capabilities mean a lot to large purchasers–in fact, almost as equal in importance as price. Large buyers often involve senior team members in procurement, which necessitates the need for inclusion of people possessing high-quality management and sales skills while serving key accounts.
With more intensifying sophistication of the procurement process at large businesses in future, the buyers will keep trying to cut costs and gain significant advantage while negotiating with procurement. The suppliers, in turn, can create a win-win situation by providing first-rate key account support and service.
Leading suppliers utilize the 4 drivers of growth to develop best-in-class key account management practices and increase their large contract win ratios. These drivers are actually the 4 imperatives that forerunners undertake to fuel their growth:
- Quantified Value Proposition (QVP)
- Value-based Selling
- Coordinated Account Management
- Negotiation Preparation
Let’s, now, talk about the first 2 drivers of growth in detail.
Quantified Value Proposition (QVP)
Although, a clearly outlined, quantified value proposition (QVP) for the products and services offered is a definite metrics of success, most sellers don’t quantify the value of their service. This helps the sales teams to focus on engaging business leaders concerned with the overall profit and loss rather than price, and positively impacts winning and sustaining customers. QVP aids in enhancing strategic account margins and creating advantage even in low-margin industries. A few sellers have taken the QVP to the next level where they link a portion or all of their fees to value delivery.
Value-based sales are focused on a shared understanding of the value of the product or service offering. Most organizations desire to be the primary suppliers of large accounts provided they can sell on value; but, not many sales people are proficient in value selling. To train the existing sales people to become value sellers, leaders need to equip their sales teams with ready-to-use quantified value propositions, updating those, and investing in frequent trainings and in-field coaching of their cross-functional sales teams—comprising of people from R&D, sales, marketing, and senior executives—to recognize the full value potential of a strategic account. Assigning the best reps to the biggest opportunities is another important factor that yields substantial dividends.
Interested in learning more about the other 2 drivers of growth and managing strategic accounts efficiently? You can download an editable PowerPoint on Account Management: Large Global Accounts here on the Flevy documents marketplace.