Want Sustainable, Profitable Customer Relationships? Practice Great Account Management!

Do you define success by the length of your client list? Are you content with low margins per account? Does high customer turn over make your day? I didnt think so.

Despite the obvious undesirability of these account characteristics, you may still suffer from one or all of them. So the question becomes, how to create profitable customer relationships that then become long-term customers? One answer is through superior, account management.

Building sustainable, profitable customer relationships is the result of customer intimacy. Customer intimacy happens when there is two-way interaction and a deep level of mutual trust between your company and your customer. Developing this trust takes time. Earning your position as the trusted advisor with a customer is the outcome of effective account management and most importantly it is the outcome of adding value to your customer above and beyond the inherent value of your product or service.

Strategic Account Management

Account management is strategic not tactical. Youre not managing the details as much as you are managing the structure, direction and outcomes of the relationship. The goals of Strategic Account Management are to:

 Add maximum value to clients based on their value perceptions
 Allow for the greatest opportunities for knowledge transfer
 Build close contact with decision makers throughout the customer organization
 Create opportunities for mutual learning and feedback
 Increase revenue and profit margins by doing all of the above!

When these goals have been realized, you will have developed a sustainable and more profitable customer relationship. You will realize the benefits of increased profitability, longer-term relationships, protection against competitors; and you will gain knowledge that will help you improve not only your business but also that of your customers.

Adding Value Through Knowledge Transfer

We have all been told time and time again that we live in a knowledge-based economy. Knowledge is power! While this is true, we often find it difficult to keep up with the amount of information and knowledge we need to be successful. Your customers also face this knowledge gap and this gap provides a unique opportunity to make knowledge transfer a competitive advantage for vendors savvy enough to capitalize on the opportunity. By freely sharing knowledge with your customers you are enabling them to make better decisions and enhancing their business capabilities. You are positioning your company as their trusted business advisor and solidifying the relationship against competitors. Adding real value also allows you to build a premium-pricing model that will contribute significantly more to your bottom line.

Actually transferring knowledge means that managers must make learning a top priority. Managers must lead the way by becoming life long learners themselves. Compare your budget line items. What percentage of your budget is allocated for education? Is it as high as advertising or marketing or even client entertainment? Here comes the heretical statement: Your education budget should be one of your largest investments!

Notice I said investments not costs. Costs dont return value to the organization, investments do and so does education in a big way. Anyone who interfaces with the customer must be given every opportunity to attend training, seminars and conferences. And not just education in your industry or education related to their role within the company (i.e., sales training for sales staff). How can they transfer valuable knowledge to their customers if they dont know and understand their customers industry? If your product or service is sold into the banking industry, for instance, your account managers should be attending the ABA and BAI conferences. Account managers should also understand how to manage and grow a business if they are to build credibility with their customers senior management. How many business and industry journals come to the office? Im guessing not many but if do you subscribe to the appropriate journals, Im willing to bet theres only one copy for the whole office. Its time to get everyone his or her own subscription!

Act Now!

Start building deeper and more profitable customer relationships by taking some important these initial steps to building strategic account managers who can become trusted advisors to your customers. Try these:

 Increase your education budget
 Subscribe to the appropriate periodicals and journals get a subscription for each person
 Identify your key customer industries and research the top conference, seminars in those industries
 Create opportunities to share information among your staff and in staff meetings
 Assign account managers to attend appropriate seminars and conferences
 Deliver strategic account management training for all your sales reps (be sure its customized to your needs and not off-the-shelf)
 Identify your best trusted advisor candidates and assign them your highest potential growth customers
 Develop a strategic account plan for each of the high growth customers
 As management, demonstrate the behaviors you want in your staff Walk the Talk!

Through strategic account management and knowledge-sharing, you will begin to build the right relationships with your customers. You will at the same time realize the benefits of increased profitability, longer-term relationships, a nd protection against competitors. Last but not least, you will gain a level of knowledge that will enable you to improve not only your business but also the businesses of your customers.

Shelley F. Hall is Principal of Catalytic Management Consulting, specializing in business performance and growth consulting. Catalytic's mission is to enhance its clients' profitability by delivering customer-focused solutions for increasing revenue and improving operational efficiencies. Carmela Blog29263
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