Part 2: Tactical Issues in Strategic Account Management ... Ironbolt Steel and Executive Visits: What Didn t Work

Chapter List

Chapter 5: Key 4: Create Human Resources Support for Strategic Account Managers

Chapter 6: Key 5: Create Firmwide Relationships at Multiple Levels of Relationships Between the Firm and its Most Critical Accounts

Chapter 7: Key 6: Regularly Quantify and Communicate the Value Received From and Delivered to Strategic Accounts

Chapter 8: Key 7: Use Technology Judiciously

Part Overview

Jonas Simon, president of Ironbolt Steel, had spent the last 15 months aligning his organization, hiring strategic account managers, and sending them out to develop better relationships with his largest customers. He knew that it had been time well spent, but he was not really a patient man. It went against his grain to go so long without being able just to tell someone to do something in strategic accounts. And then he had what he felt was a moment of brilliance. For years, he had personally visited each of these large accounts (he had started in field sales and loved the contact). Simon had been so successful with these visits that Ironbolt now had too many customers and Jonas too little time to visit each personally. This fact created an opportunity for Jonas to act.

Jonas decided that strategic account visits offered a wonderful opportunity to ensure that his executives remained "engaged marketers." He also believed that all his executives would benefit from such visits. So at a quarterly executive meeting, he announced that every executive would make six customer calls—by themselves—every year. He gave out the names of six customers and the contacts that each executive would visit. To him the entire assignment was a no-brainer.

Thus executive visits began. From his salespeople, his customer service people, his strategic account managers, and from the customers themselves, he started hearing horror stories.

Jonas' vice president of MIS had visited one of Ironbolt's top-five customers. After hearing the customer's president criticize "his" EDI system for being slow and hard to use, the VP of MIS calmly replied that the president lacked the technical skills to even understand his system, let alone criticize it.

Ironbolt's CFO was very uncomfortable about visiting customers. He got together long financial printouts so he would have something to talk about. He ended up giving a 90-minute in-depth, 100-slide financial presentation to another executive at a top-five customer. The customer executive called Jonas and said—in emphatic tones—that he would up his purchases with Ironbolt if Jonas would guarantee that he would never have to sit through another of those presentations. Jonas momentarily considered using the CFO as part of a very creative sales and marketing strategy. He quickly realized, however, that the CFO marketing approach was impossible.

Jonas' VP of human resources believed that she could best develop trust with her assigned customer by sharing Ironbolt information. She enthusiastically and repeatedly emphasized what a great financial year Ironbolt was having and how such resources made Ironbolt a truly stable supplier. After her visit, the customer executive called Jonas and said that, if Ironbolt was having such a great year financially, why couldn't Jonas give him a deeper discount on rolled steel?

Jonas felt an executive migraine coming on.

Jonas had gone through the hard work to get all his employees headed in roughly the same direction, had selected targeted strategic accounts, and had carefully assigned his strategic account managers. But his well-intentioned executive visit program had some unintended consequences.

It was not enough for Jonas—or any other firm—to do the strategic alignment work and then assume he could do something to help strategic accounts without asking basic questions and setting up support structures both for his executives and for his strategic account management program. Jonas needed to ask his SAMs how to integrate his executive visit program into the goals of their strategic account plans. He also needed to ask whether all of his executives were really equipped to speak to customers (a firm usually has a few decision makers who probably should never speak to customers). And he needed to help determine presentations that would offer the customers value without giving away the store.

After the strategic alignment work, there are tactical issues you ignore at your peril, among which are: creating human-resource support for your account management program (Chapter 5); developing firmwide relationships (Chapter 6), which require far more direction than Jonas' approach above; quantifying value received from and delivered to strategic accounts (Chapter 7); and using technology in strategic account management (Chapter 8).