scaling emerging growth companies | Strategies to improve business profitability | advice for company growth
In the last article in this series I suggested that a key account strategy can be a promising way for emerging companies to increase their top line and produce sustained, stable cash flow.
Identifying companies that have the potential to become significant customers and then laying the foundation to market to them should be a priority for companies trying to get past No Man’s Land.
The Initial Steps to Create a Successful Key Account Strategy:
1. Pick Your Targets
You are going to be investing a lot of time, energy and money in developing and executing your key account strategy. The biggest, best known or most profitable companies are not necessarily your best targets. Identify companies whose strategy and operations you can really add value to; that are open to learning more about you; with whom you can build a lasting relationship. Unless your strategy is to be the low cost/price competitor, avoid companies that try to evaluate suppliers mostly on price or that want to work on a cost plus basis.
Evaluate prospective key accounts as to your ability to develop the power to sustain your prices and raise them when warranted. Which customers will stick with you instead of switching to new entrants into your market or to substitute products and services?
2. Do Your Research
As you home in on potential key accounts, make an effort to understand everything you possibly can about them. Do research on the Internet. Talk to their suppliers, competitors and customers. Create a hypothesis as to where you can play in their strategy.
3. Create Relationships at All Levels
The commitment you make to creating relationships at all levels of the company is what distinguishes a key account from other customers. You as the CEO need to create a relationship with their CEO. Others in your company must connect with everyone who makes or influences buying decisions, for example at both the corporate and business unit levels. Understand each person’s performance targets and how you can help them achieve their goals. Understand how the CEO cascades the company’s goals to those responsible for purchasing.
Critical Aspects Product and Service Launch
It is particularly important to understand how everyone involved in deciding on your product or service is incented and compensated. Try to verify what you hear; assembling the information into a consistent picture. Expect some folks to be suspicious as to why you are gathering information. You must establish rapport first and be sure that your relationship building activities are seen as beneficial. Customers who see you as really trying to help them reach their goals will be responsive.
Be ready to find discrepancies in objectives. For example, if you are selling supplies to an oil field services company, some managers will have targets for cash flow at the rig. Others will be incented to be concerned with safety. If you are trying to influence the latter group, you might seek to add value by offering a program to remind them periodically to change goggles.
The steps above will help you build the relationship with a key account. In my next article I will focus on executing on the key account relationship and adjusting to changes in customer demands. If you would like to learn more about how to create a successful account strategy, download our free ebook below, "The Three Step Strategy to Improve Your Profitability."
About the Author
Devesh Sharma has an impressive background in international corporate strategy, operations and M&A. His earlier background includes management positions in charge of IT, e-commerce and international operations. Learn more or contact Devesh directly here.
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