Strategic is Beyond the Present!
“The tougher the job, the greater the reward.”
With the SAMA annual conference in Florida fast approaching this is a good time to share an insight from our book Managing B2B customers you can’t afford to lose about managing rewards and insights within strategic account management (SAM).
The ‘S’ in SAM stands for ‘Strategic’. Most literature considers the timeframe for anything ‘strategic’ to be a minimum of three years. Many people think it should be five or even ten years. The Chinese think in terms of centuries. However, in a world of post-GFC corporate time horizons have reduced more than ever and a year out is long-term in many organisations.
The biggest issue that companies face with SAM is thinking too short-term about what they are trying to achieve with their strategic accounts. In a 2008 SAMA survey, the number one internal barrier to a successful SAM program was: too much focus on short-term objectives at the expense of long-term opportunities. Rarely do you see companies planning activities beyond this year. Again this is mostly driven by typical corporate milestones – this month, this quarter or this financial year. In most companies financial rewards and incentives are tied to these corporate milestones, which reinforce a short-term operational focus.
So, if your SAM program is to be truly strategic then a large proportion of your activities must be focused at least a year out and there should be some initiatives with a two to three year timeframe. However, if you want to build strategic relationships that create real value for your account and company, create real differentiation and create barriers your competitors will find hard to penetrate, then you must invest in strategic activities.
Many companies really struggle with this concept so here is an example:
One public company made the decision to appoint industry leaders in each of the industries on which they were focused. The role of these industry leaders was to spend time with the industry stakeholders to get a deeper understanding of current and emerging issues in each industry. They did not have sales budgets.
They worked with industries to develop white papers on industry issues, bring relevant industry players together to explore emerging issues and facilitate industry discussion. There was no expectation of new revenue this year or next year. However, this approach and the information gathered achieved some significant strategic outcomes.
Internally, the company was able to consolidate all of the industry feedback and insights to plan long-term product and service developments that would solve problems and issues for entire industries – not just single customers. Because the company was not trying to sell products or services, customers and potential customers were open about their issues and opportunities, meaning product development ideas were deeply connected to the industry.
Externally, they became perceived as a key partner in the industry. Perceptions from the industry and the key players changed dramatically. They were seen as someone who understood the industry, had strategic value to offer and had made investments to bring positive change to the industry.
This example has all the criteria for SAM initiatives: beyond this financial year, no immediate revenue pay-off and hard for competitors to replicate. Other examples for SAM initiatives:
- Creating of user groups in the IT sector (but only when they are focused on customers sharing ideas and problems – not pushing product)
- Creating long-term programs to understand customers and non-customers
- Creating innovation forums with strategic customers that focus on strategic problems and opportunities
- Creating value-added activities for your B2B top customers
Take a close look at your SAM programs and identify which initiatives are truly strategic and provide you with a competitive edge.