The global pandemic created unforeseen market disruptions and changes in B2B buyer behavior, including an increase in conservative customer decision making and a shift in strategic relationships between suppliers and customers. In fact, 41% of key B2B customers in a recent Gartner study reported that the economic implications of Covid-19 have significantly impacted their spending with strategic suppliers, with only 18% indicating a spending increase of more than 10% since January 2020.
As Chief Sales Officers (CSO) identify opportunities for growth to achieve their 2021 goals, they are placing an increased importance on their most strategic customers and those who still have much room to run. The same survey found that 53% of those key customers purchased less than half of their supplier’s total offerings.
To engage the most important and strategic customers and better position their organization for growth, CSOs need to consider the following four actions:
1. Renew Focus On The Key Account Value Proposition
Informing strategic customers of their importance by conveying the key account value proposition is often overlooked. Not to be confused with the organization’s value proposition, the key account value proposition provides a compelling message about the unique benefits of partnering at a more strategic level that customers are likely to receive in return on investment (ROI). Ninety-three percent of those surveyed who increased spending with their suppliers since January 2020 were aware of the benefits available to their organization for being a highly valued account.
2. Pursue Future Growth Through Collaborative Partnerships
As much as suppliers rely on key customers for ongoing growth, suppliers often emphasize short-term gain to the detriment of long-term growth potential once the relationship is established. In fact, future growth potential and potential to spend more with the supplier are the two top reasons why suppliers initially choose to enter key account partnerships in the first place.
However, once in a strategic partnership, only 40% of respondents said that their supplier puts more focus on potential growth, while 60% said that their supplier puts equal or greater focus on past ROI.
Transforming joint planning/review sessions into more forward-looking collaborative partnership engagements with active customer participation will ensure sales organizations continue leveraging strategic customer potential.
3. Guide Customers Through Digital Touchpoints
Sixty-four percent of respondents said that since the start of the Covid-19 pandemic, they were more willing to interact with their supplier through digital or virtual channels without human support. Further, 40% said they would prefer most or all their post-pandemic interactions to remain virtual. Unfortunately, less than half (48%) agreed that their suppliers provided clear guidance about the best touchpoints to use.
As customers’ engagement preferences continue to evolve, CSOs and their sales organizations must view digital as a complementary channel that can enhance key customer relationships while providing better guidance to customers about how to use all available touchpoints effectively.
4. Reinforce The Growth-Focused Role Of Key Account Manager
Only 46% of respondents said their relationship with their supplier would be significantly worse if the supplier did not communicate with the key account manager. This is not surprising, as 41% indicated that the key account manager is a tactical-focused coordinator of day-to-day activities, compared with only 7% who indicated that the key account manager is a business-growth-focused advisor to their organization.
CSOs need to ensure that key account managers are consistently engaged in improving key customers’ businesses and providing proactive guidance to help customers identify and pursue their own goals. Alleviating service-oriented and administrative burden will enable key account managers to dedicate more time and effort toward activities that improve the customer’s business outcomes. This allows them to be viewed as growth-focused advisors and ultimately improve key account retention and growth.
When CSOs prioritize these four actions, their organization is better positioned to engage key account managers in strategic partnerships, which helps improve their customers’ business outcomes. This is critical to retaining and growing these important customers who help a sales organization achieve its goals.
Robert Blaisdell is a Sr. Director Analyst in the Gartner Sales Research and Advisory, covering all aspects of sales with a primary responsibility for account management and growth focusing on account planning and management, along with key account management.