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Benefit Number Three: Strategic Account Management s Greater Account Profitability


Benefit Number Three: Strategic Account Management's Greater Account Profitability

Alignment around strategic accounts offers another potential benefit: higher-profit sales. Forming relationships, treating those relationships as assets, and investing in maintaining those assets can jack up retention and thus the relationships' value. At the same time, SAMs can shift from selling products to selling firm competencies and increased account productivity. The profit for such sales tends to be higher because the account is willing to pay more for the greater value the supplier offers. It is one thing to sell an account a warehouse; it's another thing altogether to take over the account's entire warehousing operations. The same thing holds true for joint research and development or joint marketing projects that can create new technologies or new markets for both firms. Opportunities in strategic account relationships abound for the strategic account manager with deep customer knowledge.

Attempting to sell strategically to a transactional account is similar to burning a thousand-dollar bill for heat.

Granted, there are large accounts that use their volume to force price breaks and greater service levels, both of which can torpedo supplier margins. That situation takes us back to the critical selection of the right accounts, particularly strategic rather than transactional buyers . Attempting to sell strategically to a transactional account is similar to burning a thousand-dollar bill for heat.

If large accounts in your industry tend to be transactionally oriented, you might strategically focus on other relationships—high-opportunity, medium- sized accounts, for example. Again: strategic accounts most easily allow you to achieve your strategic and financial goals. There is no size requirement. When you commit to an account relationship that buys strategically, though, your approach turns from selling product to selling more profitable business solutions.

As an example of how selling productivity rather than products can create higher-profit sales, consider the Marriott-Deloitte & Touche story.



The Marriott-Deloitte & Touche Story

Imagine you're a global firm and one day, a major division shows up and finds all its buildings condemned. You have 600 employees and thousands of clients , some major firms themselves , depending on you. The situation is not hypothetical. The lower Manhattan practice of Deloitte & Touche (D&T), a global professional services firm, showed up at World Financial Center on September 12, 2001 to find that the collapse of the World Trade Center had severely damaged the D&T office building. The employees had no access to their offices, their computers, and their phones. Tax season , their busiest time, was looming.

D&T sent out an RFP for temporary office space to several major hotel chains, among them Marriott International. Their RFP seemed pretty straightforward. D&T was looking for 200–250 offices for a minimum of two months—starting immediately. As Patrice Spinner, the Marriott International Alliance Account Sales Director for D&T said, a typical hotel response would have been to offer availability and pricing. And most chains responded to D&T that way.

But Spinner wanted to play a different game. She and other Marriott managers formed a cross-functional account management team that created a total solution for D&T. The team included managers from Marriott's Global Sales Organization, a hotel general manager, Marriott sales executives, a regional general manager from Marriott's ExecuStay's furniture rental division, a regional VP of information resources and her six-person team (who themselves assembled a team of a half dozen IR, systems managers, and data service engineers to or- chestrate setting up phone, computer, and Internet lines), the general manager of Marriott's Worldwide Reservation Center, and many others.

The Marriott team's solution included room pricing and availability, plus safety and security systems, food and beverage options, telecommunications (Internet connections, phone banks, etc.), office furniture rental (Marriott was the only firm with a furniture rental division—about which Spinner knew nothing before this project), consolidated billing, and customer service. The team goal, included in the Marriott proposal, was to "deliver a comprehensive office relocation package that provides Deloitte & Touche with virtually uninterrupted service to clients." This is a value proposition far beyond rooms.

Marriott won the bid. Then began the implementation, whose logistics were staggering. Hundred of D&T employees needed office space as well as the communications infrastructure required by a high-tech business. At the same time, all D&T clients needed immediate access to their associates . When D&T awarded the contract, overnight it moved computers, files, staff, etc., from its financial center offices to a Marriott hotel.

Normally the time frame on a job this large would have been weeks or even months. But working together, the Marriott team (Spinner's "volunteer army") readied the hotel for occupancy in 12 days. Spinner had met the team's goal of creating a solution so total that all D&T needed to do was check in. And check in they did on September 24—just four days after the contract was signed.

The glue that held D&T and the clients together was Marriott's turnkey customer service package. Marriott even set up and staffed a call center to take D&T's incoming calls. Marriott had its people trained in how to take calls for D&T, and they now handle approximately 800 to 1,000 calls daily, routing each to the correct office or voice mail. To D&T clients, the service was transparent.