This article is intended to help everyone gain a better understanding of National Accounts Programs, including the motivation for creating one and the steps toward a successful process. While it is not intended to definitively answer every question regarding national accounts, it serves as a set of guiding principles for those in the company who are responsible for the success of the program. It is written for salespeople, branch managers and national account representatives, not the company's executive management team. However, keep in mind that executive management needs to be committed to the program and would benefit by understanding the process and concepts.
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.
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.
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 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:
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:
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:
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
National Account Manager
Local Account Manager
Step 2: “The Tiger Team"
A tiger team is a select group of top-level employees, selected by executive management, who are committed to the objective of refining the development of the national accounts program. This team consists of the following personnel:
The tiger team should be split into two groups:
Group 1: Director of National Accounts
Several national account representatives
Group 2: Regional manager
Several local account representatives
With a two-day retreat as the setting, each group will separately establish the following during the first day: (This is a brainstorming session designed to cover any and all ideas. )
On the second day, the groups will merge and compare notes to establish a united refinement plan to go forward. This documented plan will be submitted to executive management for approval. Upon approval, it is highly recommended that the intent and objectives of the program be properly communicated to all employees. (E-mail firstname.lastname@example.org to get a sample national accounts program communication message. ) Then, a six-month audit should be conducted to follow-up on progress and action items. This should ensure the program is progressing and that objectives are met. (E-mail email@example.com if you would like a suggested listing of qualification procedures. )
Step 3: Communication
Establish communication processes and trust-building techniques for existing and prospective national accounts. Tips include:
Track the Process on the Web
It greatly enhances the communication process if national accounts programs are tracked on the web. As Akarin Weatherford, Chief Technology Officer of CEO Strategist LLC points out, this creates great opportunities to increase effectiveness within the organization:
Because of the distributed nature of national and local accounts, the best way to manage this process is through a web-based application. This means the following:
The motivation and process for developing a national account program have now been outlined. As you go forward, remember these elements that will be critical to the program's success:
Dr. Rick Johnson (firstname.lastname@example.org) is the founder of CEO Strategist LLC. an experienced based firm specializing in leadership for wholesale distribution. CEO Strategist LLC. works in an advisory capacity with company executives in board representation, executive coaching, team coaching and education and training to make the changes necessary to create or maintain competitive advantage. You can contact them by calling 352-750-0868, or visit http://www.ceostrategist.com for more information.
Rick received an MBA from Keller Graduate School in Chicago, Illinois and a Bachelor's degree in Operations Management from Capital University, Columbus Ohio. Rick recently completed his dissertation on Strategic Leadership and received his Ph. D. He’s also a published book author with four titles to his credit: “The Toolkit for Improved Business Performance, ” the NWFA & NAFCD “Roadmap”, Lone Wolf-Lead Wolf—The Evolution of Sales” and a fiction novel called “Shattered Innocence. ” Rick’s next book due to be published in November is titled; Lone Wolf – Lead Wolf, The Evolution of Leadership