In my last post we discussed conducting a needs assessment with your large key strategic accounts. In this post we will discuss more information we must have to truly design strategic account development plans that create sales velocity.
What do you really know about your key customers? No… really?
Far too often the relationship we have with large accounts is about “getting”. We need to get what we want from the customer just like every other supplier. To truly create repeatable profitable sales growth with key accounts today that lasts well into the future our relationship needs to evolve to be focused about “growing together”. Your key account development managers must evolve in your customer’s eyes from “ just another sales rep” to a “trusted advisor” providing much needed insights to help key accounts achieve their strategic bottom line objectives. In this post we will share how critical it is to take a SWOT at your large key accounts at least once per year.
What does your team really know about your key customers?
Ok, so they know your total sales and how those sales are broken out into painful detail by part. They know how sales have been trending. They know the buyer and maybe a few other key influencers. They know the history of your company serving this account and they should know what the customer requires for you to be seen as a preferred vendor.
Lets ask a few more questions if you don’t mind….
What is your key account’s biggest strength?
What is your key account’s biggest weakness?
What opportunities can your key account capitalize on this year?
What is the biggest threat to your key account’s business this year?
For teams to develop key account growth strategies they must intimately know the answers to these questions when they develop their account growth strategic plans. When you cater your growth plan to capitalize on market opportunities for your customers and fix unresolved problems they have you become a trusted strategic business partner and not just another vendor. Could a lack of current market data be hurting you sales performance?
Does this sound like too much work?
Does your team consider these questions each year?
Not sold yet?
Let me share an example of how one team I helped levered taking a SWOT at a key account and it turned into dominating a market niche at high gross profit margins.
One of the teams I served in the past made custom bent tubes and pipe. We identified a new market: Tanker Truck Manufacturers because it matched the criteria for an ideal customer profile. Each of the large 31 tanker truck manufacturers in North America currently had bent tube vendors or they fabricated them themselves.
We leveraged our relationships at a local large manufacture of tanker trucks , met with their leaders and set out to learn about the business of their business.
What were this large key account’s strengths?
In speaking with their customers (fleet owners) in VOC interviews we heard they made a high quality tanker truck. They were not the cheapest but their trucks lasted about 30%-40% longer than the other cheaper models and had much less downtime. Fleet owners valued their service and relationship as well as their aftermarket capabilities. Even the fleet drivers preferred their trucks!
What were their weaknesses?
Like many family run businesses that explode into large organizations they continued to manufacture as they always have. If it isn’t broke don’t fix it right? They had not leveraged LEAN yet and there were a number of opportunities to drive cost and time out of their manufacturing processes from our observations.
What were their market opportunities?
We asked a lot of questions and did market research on their large fleet customers. At the time the fracking market was booming and we discovered each fracking job site received on average 8,400 truckloads of something each year. For example in the fracking process they require very fine fracking sand and some of our targeted customer’s trucks were hauling frack sand and other chemicals to fracking well sites. The trouble was all tanker manufactures were so busy they their production was often sold out for 12 to 18 months. If one of their lifetime loyal key fleet customers came to them with a much-needed new order they could not provide the same turnaround the customers were accustomed to.
What were their market threats?
If you could not keep up with your key fleet customers needs for trucks you were forcing them to start relationships with your competitors who often made less expensive trucks. Once they started buying from them your gross profit margins often eroded on future orders because the salespeople were not trained to sell based on value.
Our key account could make large capital investments to grow their production capabilities but there was a huge risk in doing so due to the cyclicality in the price of oil per barrel. We found when oil was over $78 / barrel the fracking sights were booming and when the price dropped the wells were caped.
Each of the large tanker truck manufacturers were buying custom bent tubing in pieces and welding them together to make their tanker trucks. It would often take 32 welds and expensive heavy clamps to make one taker truck. It was a real art form to watch the welders fabricate the tubes on taker trucks. If the customers were not buying custom bent tubes they invested in a tube bender and were making their own very basic parts.
The company I was helping was known for making high quality custom bent tubing and their added value engineering capabilities. They built the engineering and manufacturing capabilities to make some innovative parts that previously would have needed to be welded or clamped together. Their parts were used in many other markets to improve performance and reduce labor cost and time of assembly.
So we developed a key strategic account development plan based on a few sales hypothesis what if’s:
What if we could look at our customers designed that currently included over 30 welds and numerous heavy expensive clamps and design custom bent tubes that removed the need for welds and clamps?
What if we shipped our parts in a kit and helped our customers standardize their designs?
What if our kits would move down the production line as the tanker truck was being assembled reducing assembly time, searching for parts and scrap?
What if welders that were in high demand could move to more value added parts of the assembly process?
What if the customer could reduce the number of heavy Victaulic clamps, reduce weight and the fleets could haul more fuel in my customer’s trucks than the competitor’s. (now that’s a competitive advantage! Every pound of weight we could remove resulted in the fleet being able to haul 7 more gallons of billable fuel!)
What if our designs and kits helped increase the number of trucks our customer could produce by week?
We used all of the above and more and presented our value-based solution to the leaders of this company and converted the majority of their orders to us.
Word spread in this fragmented niche market and we were asked to share what we did at the TTMA trade show. I had 9 minutes; (I will never forget that, toughest presentation I ever had to make), 9 minutes in front of the owners and executives of all the tanker truck manufactures in North America to share how we helped create value :
- Increase production
- Reduce weight
- Improve quality
- Reduce manufacturing costs
- Reduce scrap
- Better utilize welders that were in short supply
Within months executive teams from the top tanker manufacturers were touring our facility. On those tours they saw our capabilities and that triggered other unresolved problems they had which resulted in more new products.
How about your company?
Are you just another vendor or a trusted advisor providing insights to help your customers grow?
How often do your key account managers take a SWOT at their accounts?
Do your key account managers know the business of your customer’s business?
Do your key account managers clearly understand challenges your large accounts face today and how you may be able to serve them?
Are your key account mangers seen as vendors or trusted advisors that impact the customers bottom line?
Would your team value explosive key account growth at higher gross profit margins?
Taking a SWOT at your key strategic accounts is a key step in solving the puzzle of key account strategic development plans that drive sales velocity.
To fix key account sales growth problems we must understand our customers’ business.
If you would like to learn more about SWOT Analysis please visit the sites below:
The next step in the puzzle of fixing sales problems at key strategic accounts is taking a SWOT at competitors that share your key accounts and we will discuss this step in the next post.