Account planning usually involves the strategic / key account manager, account team and customer, and the focus of an account plan will differ according to the “go-to-market” strategy developed for that account. Components of a plan frequently include: a joint customer/supplier mission statement, industry / market / customer overview, business objectives alignment, position / performance in the account, resource allocation, strategic opportunities and value-based account plan objectives.

The account planning process is best facilitated using analytic technology and virtual communications for fast and agile response between the supplier and customer stakeholders.

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Account Selection, Segmentation & Portfolio
The process of account selection and segmentation is a systematic method for optimum customer portfolio management. Account selection is part of determining the “go-to-market” strategy for each customer. Using a set of tools and criteria, accounts are selected as well as de-selected, and they can be segmented or tiered according to varying levels of resource allocation, funding, service, etc.

The process of account selection requires the supplier to first define a strategic account. For example, one company defines strategic accounts as “those accounts that are managed separately from the organization’s traditional sales channels, by account managers who have total responsibility for the sales, business processes, value proposition and customer satisfaction.”

The account team’s perspective and input contribute to objective evaluations of accounts, helping to match the supplier’s comparative capability to customer opportunities. Importantly, the process can determine in which accounts a supplier is over-invested or under-invested, a critical determinant of business success. Proper account selection is considered a critical step in the design of a Strategic account program.

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Business Case for Strategic Account Management
The business case for strategic account management is the justification and rationale for changing the supplier’s sales approach and triggering substantial reorganization throughout the company, in order to establish a structured program for strategic accounts.

The launch and implementation of a strategic accounts program necessarily requires a significant investment of time, money and corporate resources over an extended period of time; it requires not only the approval of senior / top management but their sustained commitment to, and involvement in, the process.

The business case for strategic account management is rooted in a convergence of compelling factors most often related to: economic and supply chain trends, key customers, competition, return on investment, value to the strategic account, company organization and culture.
Strategic account professionals who have experienced the process of introducing strategic account management in their companies testify to the continual need to communicate “the case” for strategic accounts to ALL the stakeholders in the supplier and customer firms. The effort to communicate the value of strategic accounts inside one’s own company is also referred to as the “internal sell” – some directors of strategic accounts and strategic account managers have spent up to 50% of their time the first year of their program on internal selling.

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Channel Conflict
A sales channel is any distinctive means by which customers and suppliers communicate and transact business. And any time more than one sales channel is used, there is potential for conflict. Historically, channel issues have arisen over dominance, cost, geography, sales credit / ownership and message confusion.

More and more, technology and the Web are facilitating the integration of multiple channels to optimize the selling process. Channels are often selected in varying combinations depending upon the stage of the sales cycle and customer preference.

In the context of strategic accounts, channel communication must be integrated and realigned with the overall strategy for the key account.

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Communications
Communications refer to all of the interpersonal communications that occur within and between customers and suppliers, the supply chain, internal stakeholders, account teams, etc. Communications also applies to the unique patterns and protocols of interaction found in different countries and cultures around the world that may significantly impact global account management.

The quality of communication can build upon or detract from the social relationships between a customer and supplier.

The different modes of communication cover three categories: 1) Face-to-face; 2) Voice-to-voice; and, 3) Transcript-to-transcript. There are factors affecting the choice of communication mode and specific guidelines that can be developed for their use.

The content of ongoing communications with the CUSTOMER frequently focuses on value of the company’s global program, data standards & quality, customer applications, value-added products and customer satisfaction. Within the SUPPLIER’S company the focus is on customer messages, YTD results, account strategies / activities, presentations / templates, success stories / applications, and the global customer management matrix.

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Compensation
Compensation applies to individual pay of strategic account management practitioners including the positions of strategic / key account managers (SAMs), global account managers (GAMs), VP / director of strategic accounts, VP / director of global accounts, senior executives in the role of executive sponsors of a strategic account program, and incentives for account teams.

Compensation plays a critical role in a strategic account program to help drive specific relationship and team behaviors, and to establish a reward system consistent with the goals and objectives of the program and account plans. SAMA’s annual Survey of Strategic Account Management Compensation Practices monitors compensation plan designs including the mix of salary, bonuses and incentives as well as the criteria used for performance measurement.

Compensation issues relevant to strategic account management include determining how sales should be credited, i.e. double-credited vs. split-credited as well as how compensation correlates with the job responsibilities of the strategic account Manager. Companies differ in assigning SAMs responsibility for targeting new accounts, growing existing accounts, servicing accounts, or combinations of all of the above. The expectations and skill sets required for these different positions impact compensation.

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Contracts & Agreements
In the context of strategic account management, contracts and agreements refer to a type of relationship or partnership agreement in addition to or instead of a standard product / service contract. A strategic account agreement sets forth the mutual goals and expectations of the supplier and the customer along with terms of performance and measurement.

Frequently, agreed long-term relationships are documented in less formal, more flexible terms than a typical contract. An example is a “global umbrella agreement” that overlays existing local contracts and/or provides options for country-specific terms.

In a trust relationship, an agreement will reflect mutual commitment to a profitable partnership; partnering terms may extend to sharing of sensitive information, shared expenses and resources and new product development.

Customers benefit from the dedicated services of the account manager, enhanced service and support, and faster problem resolution; Suppliers benefit from satisfied customers that generate increased revenue and profit.

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Critical Success Factors for Strategic Accounts
Critical success factors for strategic accounts are those combined elements, documented through practice, that have been found to provide a powerful model for building a comprehensive, long-term and profitable relationship management program. The sum total of these elements equals a sustainable competitive advantage. Underestimating the importance of any one factor can have a substantial negative effect on the program’s potential and success rate.

Examples of acknowledged critical success factors for strategic account management include: top management involvement, selecting strategic customers, organizational alignment, securing and growing strategic customer business, locking out the competition, realizing the benefits of strategic customer relationships, the role of technology, and identifying key issues for the future.

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Cultural Issues
Cultural issues refer to any type of culture, whether it is the norms, values and customs of a company or a country. Culture, in all its forms, plays a significant role in the process and implementation of strategic account management. For this reason, it becomes a business advantage to understand the cultural issues that may have a positive or negative effect on strategic account management and how they can or should be dealt with.

A supplier’s corporate culture will manifest itself in almost every aspect of planning and implementing a strategic account program – from communications and compensation to organizational structure and the role of technology. What is your company’s response to change? Is your company customer-focused?

A customer’s corporate culture will impact the strategic account relationship according to its established patterns of engagement with suppliers, its vision of growth, its views on trust and partnerships and so on.

A country’s culture permeates business ethics and behaviors, communication habits and relationship expectations. Research into global account management has identified cross-cultural competencies that facilitate effective international account management practices. Global account managers have worldwide responsibilities but must possess “local” sensibilities.

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Customer Satisfaction
Customer satisfaction refers to a measurement of the “health” of a strategic account relationship. Measuring customer satisfaction informs a supplier about its performance and the quality of its relationship with the customer over time; it also informs a supplier about the customer’s current and future needs, issues and expectations.

The criteria used for measuring strategic account satisfaction are, optimally, jointly developed with the customer. Measurable components of a mutual relationship can include results such as decreasing expenses, improving profitability, expanding market share and increasing capacity, among many others.

In addition to the company, the performances of the strategic account manager, sales and executive management and account team are evaluated. Current methods of gathering customer information include face-to-face interviews, top-to-top discussions, customer surveys (phone, online, mail), and complaint systems.

Leading-edge companies utilize customer satisfaction measurements as an actionable agenda to produce improved business results. Customer information may be incorporated into account planning, the CRM (Customer Relationship Management) or sales automation system, proposals, sales training, and selection of personnel. Innovative companies often use predictive modeling to manage customer loyalty and retention.

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E-commerce
In its simplest form, business-to-business e-commerce is the buying and selling of goods and services using a digitally networked marketplace. In the context of strategic account management, e-commerce is about digitally connected customer relationships where enterprises communicate, exchange knowledge, collaboratively plan, integrate, and streamline their business interactions.

In a strategic account relationship, the supplier utilizes e-commerce as a way to create value. One-to-one e-commerce facilitates real time tracking of order / fulfillment and services at the customer interface, saving money, time and paper at both ends. Customer relationship management systems support the online management of procurement, fulfillment, logistics, accounting, scorecard reporting, and communications. e-commerce also enables the supplier to efficiently manage and leverage its own supply chain for strategic accounts.

E-commerce currently takes three basic forms: Private eMarkets, Industry Consortia, and Independent Trading Exchanges. Private eMarkets are Web sites belonging to individual companies to sell its own products and services. Industry Consortia are formed when a group of companies in a single industry build a Web site to sell their competing offerings to a common customer. Independent Trading Exchanges are independently owned online marketplaces designed to bring buyers and sellers within markets together in one location.

Challenges for strategic account e-commerce initiatives include integrating the “e” strategy with overall account strategy, connecting account decision-making for products, services, pricing, brand management and sales channels to decisions for e-business, integrating new Web-based technologies with existing systems, understanding changing product-service-price relationships and acting strategically in an auction environment.

According to some estimates, B-to-B e-commerce is expected to reach 42% of total B-to-B trade in the U.S. by 2005. As E-commerce continues to evolve, technology experts have predicted that e-commerce will eventually be used to link entire supply chains – from raw material suppliers through distribution channels to the end consumers.

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Executive Sponsorship
Executive sponsorship refers to a structured framework for the recruitment and engagement of senior executives within the seller’s company to support and advance the program for strategic accounts as well as individual strategic account relationships.

Executive sponsorship is considered a critical success factor for any organized strategic accounts effort. The responsibilities of executive sponsors (frequently including CEOs) include assuming a lead role in securing and maintaining long-term corporate-wide commitment, driving program measurement, results and recognition as well as empowering and supporting the strategic account managers (SAMs).

An executive sponsor should enable the SAM to report at a very high level within the organization and also take direction from the SAM regarding the key customer. The sponsor has a role in account planning and solidifying strategic relationships with customer counterparts and opening customer “doors” at a higher level for the SAM.

Occasionally, the term “executive sponsorship” is used also to refer to senior executives within the customer’s organization who provide top-level support for the strategic account relationship. More often, however, these individuals are referred to as “customer champions.”

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Executive Suite Issues (C-Level)
Executive Suite Issues refer to the concerns and priorities of top company officers on both sides of a strategic account relationship – within the supplier’s own company and within the customer’s organization.

Support of a SAM Program by a supplier’s top company executives, including the president and CEO, is essential for long-term success. These corporate officers play a critical role in leading their company’s efforts to create value for their most important customers and to incorporate a SAM Program within overall corporate strategy. The CEO reinforces the customer-centric focus needed to effectively manage strategic accounts, encouraging multi-level and multi-functional compliance and collaboration to present “one face” to the customer. Consequently, the supplier’s C-level executives need to understand, and commit to, the rationale of utilizing a strategic account management approach to achieve corporate goals.

Likewise, strategic account managers (SAMs) and their manager / director of strategic accounts need to understand the higher duty and fiduciary obligations of their top executives in order to successfully plan for and produce a profitable return on the long-term investments and resources deployed for strategic accounts. Accountability is a requirement for meeting the CEO’s expectations.

On the customer side of the relationship, the priorities and business concerns of top officers within the customer’s organization, e.g. the CFO, CEO, VP of operations and VP of logistics, are of supreme interest to the SAM selling high in a strategic account. The supplier’s value to this customer will be the measurable, positive impact on their financial health. For this reason, the supplier’s strategic account group must have intimate knowledge of its customer’s business and the burning issues of these C-level customers.

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Financial Analysis
Financial analysis encompasses all manner of financial considerations impacting both the customer and the supplier in a strategic account relationship. How much to invest in a customer and how to invest are the central objectives of managing a portfolio of strategic accounts. For an individual strategic account investment lasting 2-3 years, calculation of customer profitability is essential to securing and allocating appropriate resources as well as long-term corporate commitment.

Reciprocally, the value brought to the customer must be conveyed in financial terms that explicitly demonstrate how the supplier’s products, services and solutions are helping their strategic partner cut costs and / or increase revenues.

Financial expertise is a core competency of the strategic account manager (SAM). As the SAM sells higher in an organization, the ability to speak to the prime financial concerns of the senior procurement officer becomes paramount. It is the SAM’s job to position his company as business resource rather than a vendor.

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General Business Issues
Any number of general business issues may exist or emerge that have relevance to customer/supplier relationships and the practice of strategic account management. Some of these issues may have an immediate impact on how business is conducted within or across markets, industries, or countries; others may reveal trends or new discoveries that could significantly affect the future direction of a company or strategic account relationship. Companies must be prepared to respond to changes in the larger business environment that may alter the dynamics of these relationships.

Areas of business of relevance to strategic account professionals include U.S. and global economics, global politics, the financial markets, globalization, corporate mergers and downsizing and new and evolving technologies.

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Global Account Manager Toolbox
The global account manager’s (GAM) tools are the skills, knowledge, tactics and strategies that instruct and enhance his or her job performance. The GAM is the guardian of global customer relationships – the maestro of an orchestra of worldwide product solutions, service and support, delivering measurable value and standardized satisfaction worldwide. The resulting effect is the appearance of presenting “one face” to the customer. In actuality, it is the management and coordination of a complex network of relationships and deliverables.

A GAM’s toolbox contains the political know-how to simultaneously implement the company’s global corporate strategy as well as execute effective solutions at the local level in remote corners of the world. The role of a GAM has been aptly described as an entrepreneur, one who can independently and creatively manage mutually profitable multi-dimensional relationships across his own company, and the customers’.

The GAM’s toolbox includes: communications skills, global team leadership and management skills, business and financial acumen, relationship management skills, strategic vision and planning capabilities, problem-solving capabilities, cultural empathy, selling skills (internal and external), industry and market knowledge (self and customer) and product/service knowledge.

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Global Account Programs
Globalization on multiple levels of the world economy, industries and markets, customer behavior and technology has driven companies to seize new opportunities for global growth and reorganize their “go-to-market” approach for their most important customers.

A global account program is an integrated, multinational framework for implementing a strategic, global account management (GAM) process. The critical requirements of a GAM process include: securing senior management support, creating the appropriate internal systems to coordinate activity globally, building the global product / service delivery model, account planning, program / account metrics, training and educating the right people, designing a shared reward system to achieve global account objectives and optimizing technology and IT systems for GAM communications and knowledge management.

A closer look at global account programs in practice reveals the difficulty in both defining and understanding what exactly constitutes a global program versus a national, regional, international or multinational program, and what is a global account. Companies use varying criteria of geography and customer characteristics in classifying their accounts and programs. Yet, in-depth research with individual companies suggests that factors such as a high level of process / systems integration, geographical spread, and worldwide coordination of resources and operations distinguish the global account programs.

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Hiring, Retaining & Performance Evaluation
Hiring and retaining the right people for the positions of strategic account manager and the program VP / director of strategic accounts, who manages the SAM, are critical to a successful strategic accounts Program. The necessary qualifications of these jobs are grounded in the demands of the strategic account management and the specific roles assigned.

Interviewing and hiring potential strategic account professionals includes an assessment of their capabilities against a competency model encompassing: ability, personality, knowledge, skills and critical behaviors. The desired combination of capabilities depends on the primary function of the position.

In practice, companies are known to assign SAMs to target new accounts only, service accounts only, grow existing accounts only or some combination of the three. The competencies required to seek out and acquire new accounts are different from the skills needed to manage and grow a customer relationship. Moreover, different types of individuals will be attracted to, and uniquely suited for, these alternate roles.

In addition, companies have discovered that the skills of a top salesperson do not always prove effective in the position of strategic account manager. Where individualism and autonomy were previously valued and rewarded, team leadership and collaboration are core competencies; and where transactional selling ability was key, the ability to find and drive value for strategic customers is paramount. So, while companies continue to hire from within, they are advised to develop unique profiles and training for the SAM.

Compensation is a key factor in retaining high-caliber strategic account professionals, as is training and executive support for the SAM’s position of authority in the customer relationship.

The performance evaluations of the strategic account manager and Program VP / director are based on the achievement of both “hard” and “soft” measures. SAM measures are directly tied to individual customer accounts while program VP / director measures are usually tied to overall Program results and goals. Hard measures may include revenues, profitability, share of wallet, etc. Soft measures may cover customer satisfaction ratings, completion of an account plan, reaching higher selling levels within the customer account, etc.

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Internal Alignment
Internal alignment of the supplier’s organization is a critical success factor for managing strategic accounts. The term refers to a comprehensive set of organizational elements impacting a company’s capacity and readiness to support a strategic accounts program. Areas of alignment encompass the business case for strategic accounts, vision and mission, goals and objectives, client requirements, commitment of investment and organization, capabilities of infrastructure and processes, measurements and accountability, communications and behavior.

Internal alignment goes hand in hand with internal selling by the strategic accounts group to make the business case for strategic account management among all the stakeholders in the corporation. The sales force architecture that has territory and division salespeople staking claim to accounts and turf is deeply rooted in many corporate cultures.

Research and case studies document a significant first-year effort spent on educating, selling and aligning the program internally. Best practices also cite the need for ongoing communication of strategic account successes and the realization of the shared rewards of sustaining corporate-wide support for a customer-focused program. Ongoing training also plays a role in emphasizing the importance of the specific skills needed to implement strategic account management.

Organizational alignment for global account programs presents an additional set of alignment challenges stemming from geography, the sheer logistical coordination, and diversity of cultures required to meet the expectations of global key customers.

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Knowledge Management
The growth of knowledge management has been intertwined with the growth of strategic account management as companies strive to get closer and closer to their key customers. Effective use of knowledge within one’s own company and the management of customer knowledge are critical to successful implementation of a strategic account program.

Knowledge treated as an organizational asset is a managed process of acquiring, capturing, interpreting, transferring and applying information that is both explicit and tacit. Explicit knowledge is information that can be easily written down such as policies, procedures and data; explicit knowledge can be strategic (i.e. market activity), tactical (i.e. profit margins) or operational (i.e. pricing models). Tacit knowledge comes from personal experience and know-how (i.e. best practices).

A framework for effective knowledge management within strategic account management includes establishing structure and internal processes, motivating and influencing cultural behavior to foster sharing and collaboration and creating user-friendly management information systems.

Technology plays an enabling role to not only catalog vast amounts of information but also to intelligently process and manipulate data into meaningful knowledge for organizational alignment, account planning, account team communications and customer-facing systems. Global account management research has shown a positive correlation between effective knowledge management systems and successful global account management (increased sales volume / share of wallet).

Not the least to benefit from effective knowledge management is the customer, whose increased satisfaction results from the seller’s ability to bring new ideas and value to the strategic account relationship.

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Mature SAM Programs
Mature SAM Programs are structured programs for strategic accounts that have progressed beyond the initial stages of organizational development – the period requiring an intensely internal focus. Mature Programs, by-and-large, have achieved alignment of human and physical resources, developed distinct roles for the strategic account manager and VP / director of strategic accounts (or their equivalents) and enjoy a strong measure of sustained senior management support. Importantly, Mature SAM programs can be expected to have documented positive financial outcomes showing incremental improvements in profitability, increased revenues or decreased costs for both their own company and their key customers.

SAM Programs reaching maturity usually exist within corporate cultures that not only talk about being “customer-focused” but also have put a “customer-driven” philosophy into practice. The level of multi-functional coordination and collaboration needed to establish a fully effective strategic account program requires corporate-wide support to meet the demands of key customer relationships. A shared reward system plays a significant role in getting and keeping this customer focus.

Having established key operational systems and processes, players in a mature SAM program tend to focus more on strategic issues and opportunities such as value creation, potential areas of collaboration, new product development, supply chain management, and strategic alliances.

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Metrics – Program / Account
The metrics of a strategic account program or strategic account are the measurements by which the objectives of an individual account plan, relationship or portfolio of account relationships are evaluated. The criteria for these assessments cover a range of expectations established individually and jointly by the supplier and the customer who anticipate mutually beneficial results from the relationship.

Metrics define the value or set of values the supplier brings to the customer, the value the customer provides to the supplier, and the shared value. Value is represented in both financial and relationship-based terms and, ideally, is incorporated into the account plan at the beginning of the partnership.

Examples of value and measurements include: segment loyalty and growth achievement, expanse of executive relationships (broad / deep), mutual gain in productivity and efficiency, increased share of client’s total spend, client acknowledges value of partnership, and improvement in client’s business results.

Additionally, the supplier rates its strategic account program against pre-established critical success factors. Such factors include senior management commitment (i.e. leadership, personal involvement), organizational alignment (program objectives with vision), scope (defined customer benefits), strategic account manager selection (selection process), account selection / deselection (selection/removal process), strategic account planning (joint customer and account team planning), infrastructure (sufficient resources for program), and, ability to demonstrate value (process to identify and satisfy customer requirements).

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National / Regional Account Programs
A national or regional program for strategic account management is a structured approach for managing a supplier’s portfolio of key accounts within national or regional boundaries.

A national or regional account program possesses a number of key processes to successfully implement corporate strategy for strategic accounts. These include: securing senior management support, creating the appropriate internal systems to coordinate activity nationally / regionally, building the appropriate product / service delivery model, account planning, program / account metrics, training and educating the right people, using compensation to drive the right behavior to achieve account objectives and optimizing technology and IT systems for national / regional account communications and knowledge management.

National account programs establish centralized decision-making and operate within a uniform culture. Regional account programs may cross national boundaries but tend to develop semi-autonomous operations defined around geographical locations such as Europe, North America, the Pacific Rim, etc. Within these programs, decision-making is more decentralized, organizational processes are more complex and the culture more diverse.

By contrast, global account programs coordinate worldwide process and operations utilizing both centralized and decentralized decision-making to implement a corporate global strategy at regional and local levels worldwide. Organizational complexity is high and cultural sensibilities are a critical success factor for global account relationships.

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New Strategic Account Manager Toolbox
The toolbox of a new strategic account manager (SAM) contains the skill maps for an experienced but traditionally trained salesperson to assume a vastly different role to manage a strategic customer relationship. Benchmarking and research has identified a set of core competencies that most effectively support the responsibilities and performance criteria of a SAM.

A strategic account manager is the company representative who is responsible for planning, developing and managing a total program of seller-buyer relationships with high-level officials in customer firms. Typically, the SAM has the authority to address client concerns throughout the organization to ensure that the contract obligations are fulfilled and the relationship is preserved.

Some of the fundamental characteristics and behaviors of a SAM include: aligns customer / supplier strategic objectives, listens beyond product needs, understands the financial impact of decisions, consultative problem solving, orchestrates organizational resources, establishes a vision of a committed customer / supplier relationship and engages in self-appraisal and continuous learning.

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Organizational Structure
Organizational structure for a strategic accounts program refers to company reporting structure and design of infrastructure for delivery of product, service and solutions to key customers.

Many factors impact decision-making concerning the organization or reorganization of corporate structure for strategic account management. Characteristics of both the seller’s and the buyers’ firms influence organizational structure and each corporate structure must be uniquely designed to fit individual company needs.

In some corporations, organizational structure for strategic accounts is integrated into an existing centralized structure. Where existing corporate structure is decentralized, however, a strategic accounts organization can be created as an “umbrella” while the underlying structure is left in place. Functionally effective SAM programs have been documented using each of these approaches.

Seller characteristics that are relevant to organizational structure include the nature and complexity of the company’s products, markets and industry and the existence of cross-selling synergies between product lines that determine whether “bundled” solutions can be viably offered. In addition, the company’s scope of operation – whether national, regional, multinational or global – significantly dictates structural needs of the organization.

Influencing characteristics of the strategic customers include their degree of centralized buying behavior, their interest in and / or potential need for the seller’s bundled solutions, their geographic scope and size of operations and the structure of the client interface at multiple locations.

Organizational structure for a global accounts program versus a national or regional program typically involves a higher degree of structural complexity, flexibility and a combination of both centralized and decentralized authority.

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Partnering Process / Strategic Alliances
Partnering is a process of two or more organizations working together long-term in a trust-based relationship to achieve specific, mutual business goals. The partnership itself becomes a strategic asset and a competitive advantage, by virtue of the advanced nature of the relationship.

The foundation of partnering is trust, and the trust is built upon performance as well as more subjective perceptions of honesty, openness and confidentiality. In strategic accounts, performance correlates with achievement of customer account metrics and the realization of shared value over a sustained period of time. The more subjective aspects of trust are derived through successful sharing of both risk and reward.

Characteristics of a partnership include a shared vision, the integration of processes, intimate knowledge and understanding of the demands of the entire supply chain, strong infrastructure and information systems, a high degree of cooperation, joint innovation, senior management commitment to represent the Program at the highest levels, and the ability to demonstrate productivity and value to the executive team and to the customer.

The partnering of two or more suppliers in formalized relationships is also a form of partnering and is generally referred to as a strategic alliance. This type of advanced relationship is built on account-specific, market and / or organizational synergies that combine to create new value and opportunities with mutual strategic accounts.

Some of the most common barriers to partnering include the customer’s fear of over-dependence, fear of commitment, surprises, short-term thinking, nonalignment of internal reward systems, inflexible contracts, insensitivity of company cultures, stifling of innovation and “loose lips.”

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Program VP / Director Toolbox
The toolbox of a program VP / director of strategic accounts refers to the personal and organizational competencies needed by the individual who heads up the company’s strategic accounts group. These skills are directly tied to the duties and responsibilities of this position.

The program VP / director of strategic accounts is instrumental in architecting the infrastructure of the strategic accounts program and establishing the responsibilities and performance criteria of the strategic account managers. Moreover, the program VP / director has overall accountability for SAM program results, answering to top-level executives whose commitment of corporate funding and resources is critical to the long-term viability of a strategic accounts effort.

Attributes and activities associated with the position of a program VP / director of strategic accounts include: demonstrates personal selling effectiveness (internally and externally), selects high potential strategic account managers, diagnoses performance, coaches strategically, influences organizational strategy, orchestrates alignment of organizational resources, leverages technology and provides strategic vision. In practice, a program VP occasionally has been known to function as a strategic account manager with assigned accounts.

Empowering the strategic account manager may be one of the most important functions served by the program VP / director. The SAM assumes full responsibility for the key customer relationship and requires a corresponding level of authority to fulfill those obligations and to leverage corporate resources. Consequently, the program VP / director must actively support, as well as take direction from, the SAM concerning the management of a strategic account.

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SAM 101: The Basics for Starting a SAM Program
The basics for starting a strategic account management Program comprise the fundamental elements and organizational building blocks needed in the development of a formal structure for managing key accounts. Once a business case for a SAM program has been established there follows a critical stage of planning and reorganization to align the company’s functional and logistical capabilities against the needs of the selected strategic accounts.

Oftentimes, a SAM program begins with a “pilot” account to minimize investment and risk. New strategic processes are created and gradually institutionalized for rollout across other strategic accounts.

Companies documenting the process of launching a SAM program have identified the following key areas of foundational focus: knowledge management, selecting key customers, account planning, organizing for comprehensive customer coverage and support, technology infrastructure, compensation and rewards, customer satisfaction, program metrics and executive sponsorship.

From an organizational perspective, a company’s sales-oriented culture must change to a customer-driven one under the umbrella of executive sponsorship. Moreover, buy-in across divisions and across functional layers of the corporate structure builds the broad-based collaboration essential to deployment of corporate-wide resources for strategic accounts.

“Turfism” is a common and formidable obstacle to effective organizational alignment, as is the entrenched “silo” mentality within individual business units. Consequently, a shared reward system is a difficult but critical component of a SAM program.

Additionally, the roles of the strategic account manager and program VP / director are foundationally important to the reorganization of the sales force and require explicit definition. Most specifically, the duties and responsibilities of the SAM demand skills and competencies uniquely tailored to manage and grow strategic customer relationships. Differentiated education and training of SAMs are integral to successful programs.

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SAM Program Case Studies
SAM program case studies are a foundational learning tool to understand how strategic account management is actually implemented – both successfully and sometimes less so. Almost all programs are a “work in progress” as companies continually strive to improve systems, process and structure for better alignment with their strategic objectives and a changing economy.

While the concepts and fundamental processes for strategic account management may be common across varying industries and types of businesses, each company’s program is uniquely designed to fit their own culture and business as well as match attributes of their customer’s organization. This is a good reason to look at a number of different case studies and note the variations in small companies, large multinationals, service companies, industrial manufacturing companies, companies selling commodities, new programs, mature programs, high tech industries, European-based companies, and so on.

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Small Company Programs (<$500M)
Strategic accounts programs evolved initially in large corporations to handle the growing complexity and changing demands of their largest, most important customers. However, smaller companies are becoming adept, through technology and logistical savvy, at performing at the national and multinational level. Strategic account management has been successfully developed in small companies utilizing the same foundational approach and processes as their larger competitors – see SAMA 101: The Basics for Starting a SAM Program.

The level of investment to develop and implement a SAM program is significant. Small companies must first make the Business Case for Strategic account management and assess their Organizational Structure for the potential and suitability for a strategic accounts program. Also, a phased approach to create a strategic account management process, focusing on only one or two accounts, is often recommended as a way minimizing risk and building incremental account successes.

A major challenge for smaller companies is making the transition from regional to national and national to global. Key customers look to their closest suppliers to match and anticipate their growth, to expand not only their operations but also the scope of the relationship and the total value provided.

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Skills & Competencies
Skills and competencies pertain to the abilities and expertise of the key professionals operating within a strategic accounts program – the strategic account manager, program VP / director of strategic accounts, executive sponsor, and account team. The core competencies of each correspond to their respective duties and responsibilities within their company and with strategic accounts.

The skill set of a strategic account manager is distinct from that of a traditional salesperson and combines the following: communication skills, team leadership skills, business and financial acumen, relationship management skills, strategic vision and planning skills, problem-solving skills, cultural understanding (Global account manager), internal selling skills, customer selling skills, industry / market / product / service knowledge about the company and industry / market / product / service about the customer.

The more complex skills associated with a global account manager reside in the ability to function as an entrepreneur, maneuvering within political and cultural relationships and creating new value for the partnership.

Performance factors of the program VP / director of strategic accounts revolve around the functions of: providing strategic vision, orchestrating organizational resources, influencing organizational strategy, coaching strategically, diagnosing SAM performance, selecting high-potential SAMs, empowering SAMs, leveraging technology, demonstrating personal selling effectiveness with customers and demonstrating personal selling effectiveness internally.

The competencies of an executive sponsor correspond with their role to secure and maintain top management support for the Strategic accounts Program, empower the strategic account manager and solidify strategic relationships with customer counterparts.

Account teams are typically multi-functional and contribute their individual areas of expertise. Team members must be able to establish customer relationships where none may have existed before; jointly, they must be able to brainstorm, collaborate and work creatively to find customer value in product, process and service areas.

Also see New Strategic Account Manager Toolbox, Global Account Manager Toolbox, Program VP / Director Toolbox, Executive Sponsorship, and Team Issues.

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Supply Chain Management / Procurement
Supply chain management / procurement pertains to all of the factors surrounding the management of supply and distribution processes as well as purchasing issues and the procurement process as it affects strategic account management.

A supply chain links suppliers to their suppliers and to their customer’s customers; an end-to-end supply chain networks the raw material supplier through to the end consumer.

A supply chain is managed through the flow of materials, information and finances. The materials flow transfers product from a supplier to a customer, in coordination with any service needs. The information flow facilitates ordering and delivery communications. The financial flow consists of all payment and credit-related data, arrangements and agreements. Permeating and informing all three flows are the various relationships that exist between the members in a supply chain.

The strategic account manager has opportunities to find customer value through the supply chain. Where value equals cash, the SAM and the account team can look to each of the three areas of materials, information and finances to find more and creative ways to save money, increase efficiency or solve specific customer problems. From the purchasing side, top procurement officers are increasing pressure on their tier-one suppliers to manage tier-two suppliers.

Technology enablers (customer relationship management systems) and Web-based solutions play a significant role in improvements to supply chain management. The convergence of business strategies and information technology are now driving the future of supply chain dominance and e-procurement strategy. Experts say that business of the future will be electronically conducted across a total network of focused collaboration. And, in the vast majority of industries and business sectors, the opportunity still exists to forge the first value supply chain.

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Team Issues
Team issues refer to any issue or challenge relevant to a strategic account team. The most common is a customer-focused, cross-functional team. The organization of a cross-functional team is designed around the needs of individual customers and the specific customer strategy. Team members may come from Operations, Management, Marketing, Finance, Legal, Engineering, Fulfillment, Human Resources, IT, etc. and work toward goals consistent with the overall objective of the Strategic accounts Program. A clear purpose and joint commitment to common objectives for the key account relationship guide the strategic account team.

A high performing team has the ability to transform the way business is conducted with a strategic account, by leveraging the full resources and expertise of the company and collectively brainstorming new ideas and customer solutions. Collaborative account planning with the customer is a key activity of a cross-functional Team, creating new levels of relationships within the account and also surfacing new areas of opportunity and growth.

While account teams are generally integrated into the overall operation of a Strategic accounts Program, potential conflict can occur when the strongest customer teams threaten to dominate other account teams and monopolize corporate priorities, resources and funding. In these instances, a team operates more as a separate company and works counterproductively against the rest of the company.

The functioning of a global account team presents more complex issues in the areas of cross-cultural competencies, logistics and coordination.

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Technology: CRM, SFA, Communication Tools
Technology is a critical facet of the strategic accounts business model needed for realizing greater customer insight, channel consistency, strategic account communications, and collaborative relationship building.

Far from streamlining just operational tasks, technology serves higher strategic purposes that enable key account managers and account teams to deliver value to the customer across a broad range of organizational and management functions. The term used to describe this comprehensive account coverage is customer relationship management, of which SFA or sales force automation is a part.

Technology plays a significant role in institutionalizing strategic account management processes and building joint process and one-to-one relations with the customer. In global account management, CRM facilitates connectivity across global customer teams coordinating worldwide communication and remote business operations.

Key SAM areas for CRM application include: