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.