Account Based Marketing Tops Key Account Management
John Bernardi • May 3, 2022
Developing and Managing a Customer Asset Portfolio is the Goal
Key account management is always “ground under repair” when the executive sponsorship, strategy, patience, perseverance, skills and KPIs necessary for nurturing these assets are missing from the program. Instead, Account Based Marketing [ABM], a sustainable strategy for managing and developing customer assets, will elevate your customer portfolio to a new level of ROI when you manage it in a way that is similar to how you optimize other company assets.
A customer asset management team including members from sales, marketing, finance, support, engineering and R&D maintains a pulse on the health of the ABM program. They align customer facing resources and build peer level relationships with each account. They assign customers to multi-faceted account managers with the technical, financial and professional competencies required to develop and execute account plans. They set goals for the number of Most Valuable Customers (MVCs) and Most Growable Customers (MGCs) in the customer asset portfolio over a rolling time horizon. They wisely ration resources based on account ratings.
Account Ratings Justify Resources and Standardize Terminology
The ABM Program Treats Each Account Differently Based on Its Rating
- MVCs have a high lifetime value [LTV]. Along with a frequent, repetitive pattern of profitable multi-line/service engagements they provide referrals and collaborative assistance in designing new products and processes. A strong association with their brand enhances your brand. Your company is well-positioned within their organization both technically and politically. They tell you what you need to do. There is no guesswork.
- MGCs have high potential to become MVPs. Your company is building a partnership that complements its technical position.
- STCs [second tier customers] fit one or more of your targeted personas and meet minimum profitability requirements. They always consider your company when they have a need for your category of services, but they do not present an opportunity to become MGCs. You retain them through marketing and contact center programs and processes. Sales reps may become engaged with sales ready leads [SRLs].
- Below Zero Customers (BZs) are price shoppers with a low credit rating and have no desire to build a relationship with your company. They do not justify the expense involved in serving them. The goal is to encourage them to become someone else’s customers.
But Not Every Sales Opportunity Creates the Same Level of Value
Organization charts rarely reveal how strategic decisions are actually made.
Most companies focus on filling their marketing and sales funnels with opportunities. Sustainable growth, however, often comes from a handful of transformational wins that open new markets, create new capabilities, and generate years of follow-on business. I call these Golden Spike opportunities . The inspiration comes from history. In 1869, the ceremonial Golden Spike joined the Central Pacific and Union Pacific Railroads at Promontory Summit, Utah, completing America's first transcontinental railroad. That single event connected markets, accelerated commerce, and created opportunities that had never before existed. Eastern manufacturers gained access to western markets, western resources flowed east, and competition fueled innovation. Great companies create their own Golden Spikes . A Golden Spike sale is not simply a large order. It is a strategic opportunity that helps a company expand into a new market, launch a new service, establish a new partnership, or significantly deepen its position within an existing market. Often, it involves applying existing capabilities in slightly different ways to solve bigger customer problems. In my experience, Golden Spike opportunities are typically three to five times a company's average deal size while also meeting or exceeding gross profit objectives. They may come from direct or indirect selling channels and do not necessarily originate with large companies. Finding and winning these opportunities requires a different mindset than managing day-to-day sales activity. Successful Golden Spike hunters possess: Patience and a long-term perspective. A disciplined research process. Strong relationships with connectors, mavens, and key influencers. The ability to identify an internal coach who wants them to succeed. The skill to navigate the business, technical, and political dimensions of complex sales. Excellent time management and peripheral vision. Golden Spike hunters keep an ear to the ground. They build relationships long before a buying cycle begins and look for opportunities that competitors never see. So, how does this differ from Target Account Development ? Target accounts are organizations that closely match your ideal customer profile and can provide recurring business over time, including the occasional Golden Spike opportunity. Developing target accounts requires a focused direct-selling strategy designed to build relationships and generate a steady flow of business. Golden Spike Hunting is different. Target Account Development answers the question: "Who should we pursue?" Golden Spike Hunting answers the question: "What transformational opportunities should we create and win?" The two strategies complement one another, but they are not the same. One identifies the right organizations to pursue. The other seeks the opportunities that can materially change the trajectory of the business. As you think about your own growth strategy, consider these questions: What type of Golden Spike interests you—an existing product in an existing market, an existing product in a new market, or an entirely new product or service? How long does it typically take to uncover a Golden Spike opportunity? How much time is required to nurture and close one? How many opportunities must be found to win one? How many Golden Spike does your company need over the next three to five years? How much time and organizational commitment are you willing to devote to finding them? Most companies have a target account strategy. Far fewer have a Golden Spike strategy. If your long-term success depends on winning a handful of game-changing opportunities, perhaps it's time to bump your targeting efforts up a notch. Happy Hunting.
Win/Results is a Power Base Selling concept. The strongest sales conversations connect the two. Win = the personal benefit to the buyer as an individual Results = the business benefit to the organization Results = Company Impact - rational business case with organizational outcomes Increased revenue Lower costs Higher productivity Reduced risk Improved retention Higher margins But buyers rarely make a decision based only on company outcomes. They’re also subconsciously asking: “How does this affect me; will this make my life easier?” “Will I look smart; will this help my career?” “Will this reduce pressure; will this protect me from failure?” Win = Personal Impact - emotional and career dimension of individual motivations Recognition Promotion potential Less stress More control Political credibility Saving time Avoiding embarrassment Looking strategic to leadership Hitting bonus targets Job security
A scientific analogy provides a unique concept for guiding your business to its next level.
Self-promotional statements that are separate from actual customer experiences will disable a branding strategy.
If your decisions are based on your personal perceptions rather than the reality of your target audience, you won’t achieve your goals .