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Member You - National Accounts -- How Do You Create a Program That Really Works?
“Change is the only constant”. We have had it drummed into us so much that we find it very strange to leave things as they are. But just think about the benefits to your organisation of changing nothing:* Your attention will not be diverted from the daily need to meet customers’ needs* You will not create anxiety amongst your people that they are about to be “restructured”* You will save the cost of the project resources needed to make those changes happen.So why are you hell-bent on throwing it all up in the air and changing everything? The issue is not really changing nothing, but not changing everything. You can be sure that there is something you must do to continue to compete. Have you identified what it is? Maybe you know that you need to change, but are not clear what and why. So you change more than you need in order to be sure that you nail the real problem.Let’s put this into context. Suppose that your business supplies healthcare equipment across the world. You have to develop products, market, sell, make, distribute, and service them to your customers. You expect to make a profit and you would like to make more. You call for ideas. In a typical organisation this is how different functions might react to such a call.* Product Development Make the best use of the technology that you have to develop new products with the minimum of effort and risk in the quickest time* Production Reduce Unit Manufacturing Cost* Distribution Use the 80-20 rule to sell more to the minority of customers that are most profitable* Field Service Reduce headcount* Marketing Seek new high value niches or new markets for existing productsIs this the best approach?Resource NeededWhenever you try to do something differently, you must create a 'project' to make things happen. Projects absorb effort, even when managed by the existing staff. So, in the case of Product Development, for example, the efforts to work out how to match existing technology to new product needs will actually reduce the resource available to actually develop products.
Understanding
Understanding brings the field view (external view) closer to corporate headquarters. An internal company survey may provide the necessary clarity as to how a national accounts program is perceived. Input from local account representatives and branch managers is very important. Your company needs to explore how things are being done and how an existing program is perceived. Most importantly, input from the field with recommendations is essential. If you currently have no program, the survey is even more critical to the initial development stage of a new program. Understanding actual needs of the national account is also critical to the success of your program. To get a better understanding, ask the following questions:
• What do national account types really value?
•
Shenzhen, once comprising of mainly fishing villages now with many high rise residential apartments and multi-story factories was located somewhere in China, very near to HongKong, She was once exporting almost everything for the Christmas session shopping spree, from Christmas tree to the decorations wasn’t doing very well this year, mainly due to the increase raw materials (including electricity) and labor cost which had kept many buyers away. Not too long ago, Shenzhen boasted as the production hub of all production activities and was now no more longer the darling to of many buyers. This is nothing new; the same shift of power was witnessed by Taiwanese and Hong Kong businessman few decades ago right at their doorsteps.Being the lowest in cost is a tough battle, there were always some Tom and Henry could establish production facilities at even lower cost than yours and snatched away all the orders. Good news to buyers, right? Just keep looking for lower cost manufacturers to enjoy higher profit margins? The answer was yes and no…Therefore, as buyers, it is important to distinguish the three main categories of manufacturing models in China. They were Wenzhou model, Dongguan model and professionally managed companies. Together, they form the fundamental production engine which had been steering China to even greater export powerhouses.1. Wenzhou model, the first time I came to know about Wenzhou was when the China Government implemented range of measures to curb the heating of properties in major cities in China to prevent bubbles forming which was destined to burst one day. I came to learn about Wenzhou group buying who formed by cash rich individual who organizes trip to explore new project development or launching all around China. Snatching almost 90% of the units in one single shot is not uncommon. OK, what meant by Wenzhou model was plain copycatting the hottest products launched and released by others, within months, identical products were made available and ignited the competition which in turns lower down the price and many time beyond cost values. This hit and run models didn
Regain Power by Offering Competitive Advantage
National accounts, by definition, have significant size and buying power which provide leverage in demanding lower prices. In addition, because of their complexity and demographics, they are often more difficult and expensive to service. Consequently, most national accounts are the least profitable.
In response, you need to make a concentrated effort to effectively rebalance the shift of power by offering significant competitive advantages that make your products and services more critical to your national accounts. Without creating competitive advantage, you will be tied to the downward price spiral that eats margin and effectively negates any understanding by your customers that "price is not the same as cost." A structured national accounts program with definitive guidelines is the first step toward gaining competitive advantage. There are four basic broad categories of added value that create competitive advantage:
1. Processes that streamline your customers' productivity, improve quality, take transaction costs out of the supply chain and provide measurable savings (unrelated to price).
2. Administrative and technical support that can reduce your customers' internal costs enough to affect bottom line operating costs.
3. Sales and marketing support that can increase your customers' top line.
4. Technology that is core to your customers' business results, yet is beyond their internal capabilities. Your national accounts program should refocus your efforts on all of these issues.
Four Fundamentals
The ultimate success of a national accounts program depends on the hard work and team participation of all company employees involved in the process. There are four basic fundamentals of success in any national accounts program:
1. Knowledge - Study the internal processes of your company and/or the internal workings of your national accounts program if you already have one in place.
2. Understanding - Research the business environment in which your company operates and the resulting defined objectives for a national accounts program.
3. Clarity - Identify the big picture of market and customer demand and direction. This should be a true understanding of what your corporation is trying to accomplish in total.
4. Commitment - Secure the commitment of your entire company.
Knowledge
It is essential to outline the objectives of your program, the process involved, and the direction to take in order to receive help and support when necessary. If you have no program in effect, it is critical to develop this process.
Second, activity measurement and open communication (both up and down the chain of command) are absolutely critical for success. Accountability is an absolute necessity and it must be clearly defined. Support from your company's information management system can provide the fundamental elements of success for the national accounts program. A weak information system could leave dangerous voids or even misrepresent the true picture of the national accounts program.
Understanding
Understanding brings the field view (external view) closer to corporate headquarters. An internal company survey may provide the necessary clarity as to how a national accounts program is perceived. Input from local account representatives and branch managers is very important. Your company needs to explore how things are being done and how an existing program is perceived. Most importantly, input from the field with recommendations is essential. If you currently have no program, the survey is even more critical to the initial development stage of a new program. Understanding actual needs of the national account is also critical to the success of your program. To get a better understanding, ask the following questions:
• What do national account types really value?
• W
It was not very long ago that the only place that thought about kids were the big fast food chains, and even then limited by offering a small toy with the purchase of a hamburger. These days if you don’t create an amazing experience for the twelve and under demographic you will lose their vote!!! So let’s look at a few ideas to get them on side in part 3 of this article:12. Have family nightsThese are a great idea for a slow Monday or Tuesday nights. You could show family TV shows or movies or even cartoons. You can have special discounts on adult meals, and provide other forms of entertainment such as clowns, magicians and musicians. It gives reasons for families to go out when they otherwise would not.13. Produce family dealsYou have already seen this at most of the fast food restaurants like, KFC where they offer 10 pieces of chicken, with bread rolls, coleslaw, potato and gravy, and bottles or cans of drink for the one low price. Family packs welcome family business in a different way. The idea is to produce an interesting variety of foods for a family to enjoy for one low price. Maybe you could provide a large appetiser, two adult main courses, two children’s meals and a big serving of fruits or ice cream to share for the one price.14. Have a games room with tokensGuess who always finishes eating first in the family? Every time! If your restaurant is right for this it is a great way for the kids to keep busy while the parents enjoy their meal. There is no limit as to what you can include, whether they are video games or mechanical games, they will all appeal to children. If the games take tokens, you can include them with a children’s meal and more can be purchased if necessary. They can be purchased from the server, or added to the bill. You can give away prizes for high scores and even provide large packs of tokens for a big discount. There are many places that sell both new and reconditioned stand-up arcade games, and allsorts of games on the internet.15. Have a children’s dining areaYou could develop a children’s playing area, or even a separate d
In response, you need to make a concentrated effort to effectively rebalance the shift of power by offering significant competitive advantages that make your products and services more critical to your national accounts. Without creating competitive advantage, you will be tied to the downward price spiral that eats margin and effectively negates any understanding by your customers that "price is not the same as cost." A structured national accounts program with definitive guidelines is the first step toward gaining competitive advantage. There are four basic broad categories of added value that create competitive advantage:
1. Processes that streamline your customers' productivity, improve quality, take transaction costs out of the supply chain and provide measurable savings (unrelated to price).
2. Administrative and technical support that can reduce your customers' internal costs enough to affect bottom line operating costs.
3. Sales and marketing support that can increase your customers' top line.
4. Technology that is core to your customers' business results, yet is beyond their internal capabilities. Your national accounts program should refocus your efforts on all of these issues.
Four Fundamentals
The ultimate success of a national accounts program depends on the hard work and team participation of all company employees involved in the process. There are four basic fundamentals of success in any national accounts program:
1. Knowledge - Study the internal processes of your company and/or the internal workings of your national accounts program if you already have one in place.
2. Understanding - Research the business environment in which your company operates and the resulting defined objectives for a national accounts program.
3. Clarity - Identify the big picture of market and customer demand and direction. This should be a true understanding of what your corporation is trying to accomplish in total.
4. Commitment - Secure the commitment of your entire company.
Knowledge
It is essential to outline the objectives of your program, the process involved, and the direction to take in order to receive help and support when necessary. If you have no program in effect, it is critical to develop this process.
Second, activity measurement and open communication (both up and down the chain of command) are absolutely critical for success. Accountability is an absolute necessity and it must be clearly defined. Support from your company's information management system can provide the fundamental elements of success for the national accounts program. A weak information system could leave dangerous voids or even misrepresent the true picture of the national accounts program.
Understanding
Understanding brings the field view (external view) closer to corporate headquarters. An internal company survey may provide the necessary clarity as to how a national accounts program is perceived. Input from local account representatives and branch managers is very important. Your company needs to explore how things are being done and how an existing program is perceived. Most importantly, input from the field with recommendations is essential. If you currently have no program, the survey is even more critical to the initial development stage of a new program. Understanding actual needs of the national account is also critical to the success of your program. To get a better understanding, ask the following questions:
• What do national account types really value?
•
As a newbie on the Internet twelve years ago, I was full of ambition and bursting with energy. I was going to find the perfect program that sold the perfect product so I could retire to a perfect lifestyle with plenty of income. I had been fed so many motivational videos I was addicted… which led me to my greatest failures and most profound lessons.Fortunately, a reality check halted my financial freefall. After years of frustration and nothing to show for my efforts except a debt approaching thousands of dollars, I began to realize that there is no such thing as the marketing success formula. But there was a clue -- something called USP, or Unique Selling Proposition/Point.The difficult thing to understand about USP is that no one can hand it to you; not even me. Nobody can direct you to it; you have to discover it for yourself. USP is about making your offer different from and more valuable than, your competitors’ offer, and then, planting that idea in the minds of a targeted group of prospects.The population in general is on advertising overload. They hold on to an idea of their own until some slogan or headline breaks through and persuades them to change. Position reflects your unique selling proposition, and that’s what makes your offer more valuable than what’s being offered by your competition.Let me use FedEx for an example. They were competing with United Parcel Service and postal Priority Mail, but their slogan had two very important words that magnetized customers: “When your package absolutely, positively has to get there tomorrow”. Ahh, absolutely, positively -- used alone, neither one has the same punch as both used together!While you can’t be all things to all people, your business should be perceived as different from your competition in the minds of your prospects. It’s like answering their question: “… so what?” Make it short, simple, compelling, memorable, credible. Make it absolutely, positively better than your competition.Domino’s Pizza doesn’t advertise a better pizza. They don’t advertise more toppings, crispier crust or even a
3. Sales and marketing support that can increase your customers' top line.
4. Technology that is core to your customers' business results, yet is beyond their internal capabilities. Your national accounts program should refocus your efforts on all of these issues.
Four Fundamentals
The ultimate success of a national accounts program depends on the hard work and team participation of all company employees involved in the process. There are four basic fundamentals of success in any national accounts program:
1. Knowledge - Study the internal processes of your company and/or the internal workings of your national accounts program if you already have one in place.
2. Understanding - Research the business environment in which your company operates and the resulting defined objectives for a national accounts program.
3. Clarity - Identify the big picture of market and customer demand and direction. This should be a true understanding of what your corporation is trying to accomplish in total.
4. Commitment - Secure the commitment of your entire company.
Knowledge
It is essential to outline the objectives of your program, the process involved, and the direction to take in order to receive help and support when necessary. If you have no program in effect, it is critical to develop this process.
Second, activity measurement and open communication (both up and down the chain of command) are absolutely critical for success. Accountability is an absolute necessity and it must be clearly defined. Support from your company's information management system can provide the fundamental elements of success for the national accounts program. A weak information system could leave dangerous voids or even misrepresent the true picture of the national accounts program.
Understanding
Understanding brings the field view (external view) closer to corporate headquarters. An internal company survey may provide the necessary clarity as to how a national accounts program is perceived. Input from local account representatives and branch managers is very important. Your company needs to explore how things are being done and how an existing program is perceived. Most importantly, input from the field with recommendations is essential. If you currently have no program, the survey is even more critical to the initial development stage of a new program. Understanding actual needs of the national account is also critical to the success of your program. To get a better understanding, ask the following questions:
• What do national account types really value?
•
When we make a sale, or take one step closer to meeting our goal, we are overcome with a felling of achievement which motivates us to sell more.I’m sure that anybody who is reading this article has been in the situation where they may have been given unobtainable goals from one of their bosses, sales manager’s, or some higher up somewhere in the company.When goals are given that are unrealistic, the mission is doomed from the beginning. It immediately gives a feeling of despair to the sales team, which can be devastating to morale.The sales team will do their duty and work as hard as they can to obtain the goals, but when they fall short, they will have feelings of failure, and will be reluctant to move on.Simply stated, unrealistic goals, take the fun out of selling.A personal story . . .During my years in the banking industry, I managed a sales team in a small branch inside of a grocery store. This is what is known as In-store banking. It was estimated that seven thousand people came through the grocery store where my branch was located on a weekly basis.With that statistic, my sales team was given a goal of opening up six checking accounts per day, among other things.This would be a monthly goal of one hundred and eighty checking accounts per month. To me and my team, this was highly unrealistic.Then, In-store banking was brand new to the banking industry, and these goals were being handed down by people who never once stepped foot in an in-store branch.Please understand, I am not bitter about this, I am just stating the facts, and believe this to be an on going problem with companies.This problem works both ways. Sometimes the goals being handed down are not enough, and a sales team will fall short of what their potential could be.Needless to say, my sales team never met their daily, weekly, or monthly goals. We did however, fight the good fight and manage to hold our own. But morale was never what it should have been.Every six months my team and I would attend the semiannual sales rally, where we would sit and watch
3. Clarity - Identify the big picture of market and customer demand and direction. This should be a true understanding of what your corporation is trying to accomplish in total.
4. Commitment - Secure the commitment of your entire company.
Knowledge
It is essential to outline the objectives of your program, the process involved, and the direction to take in order to receive help and support when necessary. If you have no program in effect, it is critical to develop this process.
Second, activity measurement and open communication (both up and down the chain of command) are absolutely critical for success. Accountability is an absolute necessity and it must be clearly defined. Support from your company's information management system can provide the fundamental elements of success for the national accounts program. A weak information system could leave dangerous voids or even misrepresent the true picture of the national accounts program.
Understanding
Understanding brings the field view (external view) closer to corporate headquarters. An internal company survey may provide the necessary clarity as to how a national accounts program is perceived. Input from local account representatives and branch managers is very important. Your company needs to explore how things are being done and how an existing program is perceived. Most importantly, input from the field with recommendations is essential. If you currently have no program, the survey is even more critical to the initial development stage of a new program. Understanding actual needs of the national account is also critical to the success of your program. To get a better understanding, ask the following questions:
• What do national account types really value?
•
One of the most critical things in life that one may have to negotiate is water rights in a water court. Failure to properly negotiate water rights can cause future catastrophic issues for one's family or the future of their family businesses, lifestyles or endeavors. Often someone is called to negotiate their water rights and without the proper negotiation skills they can indeed blow generations of hard work in a single afternoon. In doing so they will cause future hardship.When negotiating water rights it is important to first show a long-term timeline of the area in the most simplest of details; broken down year by year. Next it is important to show that the other party is not entitled to the water rights by breaking down their history of the water usage in the region year by year. Then it is important to show that the other party has failed to reach an honorable settlement in past negotiations.Once these have been established then the real negotiation can begin. Failure to agree upon the historical background will later cloud the negotiation process and could hurt you and third-party rulings. Negotiating water rights in water courts or in arbitration or mediation is serious business and if you do not know what you are doing you can hire someone to do it for you. Please consider this in 2006.
Understanding
Understanding brings the field view (external view) closer to corporate headquarters. An internal company survey may provide the necessary clarity as to how a national accounts program is perceived. Input from local account representatives and branch managers is very important. Your company needs to explore how things are being done and how an existing program is perceived. Most importantly, input from the field with recommendations is essential. If you currently have no program, the survey is even more critical to the initial development stage of a new program. Understanding actual needs of the national account is also critical to the success of your program. To get a better understanding, ask the following questions:
• What do national account types really value?
• What motivates our suppliers to negotiate special terms for these accounts?
• Do these accounts view our company as partners?
• What do we know about their business?
• Are we truly the primary source of supply?
• Can we create a win-win situation?
Clarity
Everyone must have a clear understanding of exactly what you are trying to accomplish. Recognizing the volatility of the environment is a valuable piece of the puzzle. Your company needs to catch up to the pace of change within the distribution industry to maintain competitive advantage. Remember, "Perceived value drives expectations" and "Performance value drives customer satisfaction."
Raise your customers' perceived value high enough and you create "competitive advantage" which is the first step towards rebalancing the shift of power inherent in any national accounts program.
While the knowledge aspect of the national accounts program is heavily weighted toward internal perspective, clarity needs to be weighted toward your external environment. You must be clearly aware of market dynamics, including technology and other external forces shaping your particular industry and driving behavior of the national accounts customers. You must evaluate events and trends using an anticipatory perspective in relationship to your competition. You need to ask yourself these questions:
• How is the industry different today regarding what is expected from a national accounts program?
• What will be considered by 2007?
• What are our competitors doing in serving national accounts?
• What technologies offer the most potential, both as products and tools?
• What actions are our competitors taking to gain advantage?
• How will our suppliers react to our strategy?
Commitment
A National Accounts Program cannot be treated like a member of the "flavor of the month" club. Everyone needs to take it seriously. Commitment is required by everyone. This is not something you dabble in. That is why it is important to put the time and attention into the planning process before getting wet. Understand your objectives.
The only reason a company should embark on a national accounts program is to obtain sales and market share that in total is profitable for the company and meets the criteria of corporate strategic objectives.
The corporate objectives of the national accounts program may be outlined as follows:
• Develop a national presence in the marketplace
• Enhance the company image and credibility
• Develop impressive client references
• Support growth with preferred vendors
• Create synergy with the corporate mission statement
• Rebalance the shift of power and profitability in the national account program
One of the core problems facing many national accounts programs is the need to overlay a centralized sales function on an established decentralized sales force. In the past, your processes and systems may not have enabled customers, prospects, or even your own field sales representatives to make informed, favorable decisions.
How Do We Get Started?
Step 1: Define the Players
Clearly define independent responsibilities of each player contributing to the success of the national accounts program.
Director of National Accounts
• Serves as liaison with national account at corporate level.
• Approves and helps establish "Rules of Engagement.”
• Provides support to local management.
• Monitors the activity between national account representatives and local branches.
• Determines qualification criteria. Reviews qualification process.
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