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ISSUE 1, MAJOR ACCOUNTS BULLETIN:

Major Account Selling in High-Technology Companies

Jack Carroll
by Jack Carroll

Contents of this newsletter:

  1. Welcome
  2. An imperfect definition of major account selling
  3. "Major account" can be a relative term
  4. Major accounts—a way of life
  5. Value-added services
  6. Persuasion and performance orientation
  7. Your strongest major account customer candidates
  8. Three phases of account development
  9. What customers want
  10. Major account selling or major account managing?
  11. A team operation
  12. Valuable major accounts links and articles

 

1. Welcome

Let me start out with a bit of an apology. E-mail newsletters shouldn't be much longer than two or three pages or the writer runs the risk of having his readers eyes glaze over in the middle of the document. But this first issue of my Major Accounts Bulletin is really more of a primer than a newsletter. So, please bear with the length and accept my promise that future issues will be much more restrained.

In this first issue, we will cover quite a bit of ground in brief overview "snapshots." In future issues, we will dig in much deeper on these subjects as well as others of importance.

What follows is the distilled wit, wisdom, and eloquence of major account selling in a technology company environment. A lot of mistakes have been made by a large number of people in gaining this beachhead knowledge. I hope it will be valuable to you. More importantly, I hope you use it to build your major account sales revenue and to the benefit of the people you serve in business.

 

2. An imperfect definition of major account selling

Major accounts in technology companies develop on the supply (industry) side as partnerships, alliances, joint ventures, or distribution agreements. And, on the demand (market) side as customers or end users of your products. This newsletter will primarily concern itself with customers or end users of your products. Secondarily, we will write about industry relationships as well.

Here's a one-size-fits-all definition for major account selling:

Major Account Selling is a business transaction between two companies that is sizeable in terms of financial value or vital in terms of strategic significance and content.

It is a customer (real or potential) in the proverbial 20% of the old 80/20 maxim (80% of your business will come from 20% of your customers).

 

3. "Major account" can be a relative term

In another sense, major account selling is a relative term. Its meaning all depends on who you are talking to:

  • To the company, represented by a major account salesperson or manager, a major account might be one customer that is spending $2 to $100 million a year, representing 10 to 100% of its total annual revenues. (A friend of mine was on the IBM major accounts team that had over 100 IBM employees on site full time at Citicorp headquarters in New York City back in the "mainframe only" days of the 1970's.)
  • To a field salesperson, a major account might be a single account that is spending $200,000 to $2 million a year, which represents XX% of their total annual revenues.
  • To a new business sales executive, it might be a single, one time only sale for $2 to $10 million that takes up to three years to consummate (sometimes called "elephant hunting").
  • To a direct inside salesperson, it might be channel partner writing a large volume of business, or a direct mid-tier customer spending $100,000 a year that doesn't even register on the radar screens of field sales.
  • Or, it might be a "national account" with multiple locations and/or buying decisions throughout the country or the world.

The thing that unifies major accounts is that they are the biggest and/or most important business managed by those involved in the transaction, they are usually handled directly by the company, and they are (or should be) strategically planned, sold, and managed.

May we help you with major account selling?

Can we help you with any aspect of a major accounts keynote speech, strategy, or training in your company? Ask us for our recommendations or a needs analysis—no cost or obligation. Contact Amanda Hooper of Mentor Associates at 888-773-9712 or amanda@saleslinks.com for more information.

4. Major accounts—a way of life

When a company understands all of the ramifications of major account selling, it becomes a way of life for the sales operation—the basis upon which a company organizes its entire marketing, sales, service, and profit structure. Why? Because it maximizes sales and customer leverage in every channel of distribution.

If it is economical and cost-effective to leverage at the top of the sales pyramid, why not extend that leverage principle downward throughout the selling operation? Why not company-direct sales of $50 million a year coming from 8 customers instead of $50 million from 200 customers? How much efficiency would that add to any technology company's direct sales operation? How much easier would it be to satisfy 8 customers completely than 200 partially? And what would that do to bottom line profitability?

 

5. Value-added services

At its most valuable level, major account selling is more than selling in volume to customers. It is adding essential services beyond your basic product that galvanizes an account and makes them invulnerable to competition. There are two levels of value-added services:

  • Services that add functionality or utility (i.e. extended service and support, customization, etc.)
  • Services that add customer revenue or profitability (i.e. how the customer can use your products to sell more of their own products)

Major account selling delivers both, but adding to customer profitability is the key. Most technology companies can provide product price and performance. Competitive advantage is built by helping to deliver more business to the customer at greater profitability to them.

 

6. Persuasion and performance orientation

Major account selling is often equated with "relationship" selling, but relationships are not at the heart of the matter; persuasion and performance are. What does that mean? It is the persuasive promise and delivery of measured results that sells and persuades, rather than selling skills or personal relationships. The entire process of planning, selling, implementing, servicing, and satisfying "sells" the customer team. And success is measured by results based on performance benchmarks, not on nebulous promises of value, someday, somehow.

If the promise fails to materialize, persuasion and performance must change, or customers renege on agreements, and major account sales never go beyond initial implementation. "The proof is in the pudding" in major account selling. If you promise the world, you better deliver it.

 

7. Your strongest major account customer candidates

Strongest Candidates Weaker Candidates
Current customers Non-customers or new ones
Growth or change mode Stable or declining mode
Strong reputation as "winners" Unknown or negative reputations
Win/win Win/lose business relationships
Total commitment Partial or neutral commitment
Large financial payoff potential Moderate or weak financial payoff potential
Open, accessible, and cooperative Closed, inaccessible, uncooperative
Investment or value orientation Cost orientation
Business status strong Business status weak or mediocre

 

8. Three phases of account development

There are three separate and distinct phases in every major account sale and relationship as follows:

  • Making the sale
  • Fulfilling the promise of the sale
  • Growing the customer

In other words, unlike old-school selling, which was mostly about getting front-end commitment, major account selling is an ongoing process that only begins when the contract gets signed. The business relationship is of utmost importance. The value of the business relationship grows out of grooming the process. Each phase unfolds over time. As promises are kept the business relationship grows. Adding revenues and profitability to each party when successful—doing neither when unsuccessful.

 

9. What customers want

Customers are looking for measurable results:

  • Increased revenue generation,
  • Reduced cost, or
  • Increased productivity resulting in one or another of the above

Quantifying these benefits and working together to achieve them is the heart and soul of the major account relationship.

 

10. Major account selling or major account managing?

People always ask if major account selling is a selling position or a managing position. The answer is that it's both. It's a selling position in that it requires the services of a major accounts salesperson who opens doors and initiates new relationships with new people—or new relationships with familiar people (existing customers). The hallmark skills of major account selling are rapport building, persuasion, and the ability to get commitment.

On the other hand, it is a managing position because it is also about fulfilling the commitments of the relationship—keeping promises and making things work. These are the skills of a planner, thinker, and implementer who fulfills the role of the major accounts manager.

New Account Salespeople Major Accounts Managers
Spontaneous Planner
Impatient Patient
Actor Director
Persuasion oriented Detail oriented
Apolitical Political
Closing Accountable
Hunter Farmer
Killer Cooker
People Processes
Charismatic Effective
Right brain (intuitive) Left brain (logical)
Promises (conceptual) Results (actual)
Selling Managing

It's a rare individual who covers the most important ground on both sides of the ledger. Which is why major account selling is...

 

11. A team operation

Teams dominate both the selling and buying sides of a major account sale and operate best in a cooperative or collaborative mode. The best major account candidates come from happy campers already in your customer base who know and trust you. New or untested customers generally don't have a sufficient track record to extend the trust necessary to make major account relationships work at their best.

The selling team is usually composed of representatives from corporate, marketing, sales, and customer service (satisfaction). The following general responsibilities apply by functional group:

  • Corporate—program authorization, funding, and support
  • Marketing—planning, measurement, and revising
  • Sales—selling, communication, and managing the relationship
  • Service—implementation, satisfaction, support, and modification

The buying (customer) team usually has representatives from corporate, technology, finance, and operations, in the following functional roles:

  • Corporate—program authorization, funding, and support
  • Technology—information systems, engineering, specification approval, and integration
  • Operations—uses and implements the use of the product
  • Finance—weighs and measures the financial implications and results of the transaction

 

12. Valuable major account links and articles

Upside Today, www.upside.com
"Articles, opinion, financials, newsletters, etc. on the latest and greatest in the technology world." Your daily dose of high tech comin's and goin's. The Daily Variety of the digerati. Who's doing what with whom and why.
www.upside.com

Getting that large corporate account by Guy Sothie
How to get your share of what the big guys leave on the table.
www.globalinsite.com/Hurdles.html

Cultural revolutions: saying partner isn't enough
By Bill Laberis. Making the customer courtship process an integral part of your corporate culture. Walking the customer talk.
www.marketingcomputers.com/issue/sept97/laberis.asp

Intel Microprocessor Hall of Fame--Moore's Law Defined
If you are going to play the high tech selling game, you'd better know Moore's Law and its ramifications, or you'll get left in the dust. Product life cycles ain't what they used to be.
www.intel.com/intel/museum/25anniv/hof/moore.htm

Guerrilla Guide to High-Tech Trade Events
This book by Michael Roney and Michael Utrich, in conjunction with the site, will tell you everything you ever wanted to know about high tech trade shows, conferences and expos. If you are going to talk to the movers and shakers, find out where you can track them down.
www.guerrilla-guide.com

How to develop a partnering proposition
This excerpt from Getting Partnering Right by Neil Rackham et al. will remind you that partnering in high tech is a power game. These are the rules of the game as it should be played. But power players know how to bend and break rules and game etiquette to their own advantage. Be careful out there!
www.smartbiz.com/sbs/arts/gpr1.htm

What is customer relationship management? by Bob Thompson
The heart of major account management, involves sales, marketing, and customer service. The newly named science and art called CRM (Customer Relationship Management) can guide and direct you through the customer and account management process. Get a free monthly newsletter here.
www.frontlinehq.com/crm.htm

Match marketing to your company's maturity by Geoffrey Moore
Good advice for all of those start ups who are following Redmond's grand game plan. Don't! Is it really six years since Geoffrey Moore wrote Crossing the Chasm? How time flies.
www.upside.com/texis/mvm/story?id=34712c1724

Jack Carroll is founder and principal of Mentor Associates Inc. To reach him directly, call 888-773-9712 or e-mail jcarroll@saleslinks.com.

MAJOR ACCOUNTS FEATURES

Major Accounts Bulletin archives:

  1. Welcome and overview
  2. Follow their buying process
  3. Geoffrey Moore's Chasm Models
  4. Selling styles in major account selling
  5. CRM and major account selling—what's the buzz?
  6. The five most important elements in major account success
  7. Incredibly valuable tools and resources

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