SUCCESSFUL ENTERPRISE ACCOUNT MANAGEMENT

SUCCESSFUL ENTERPRISE ACCOUNT MANAGEMENT

Although the preponderance of publicly available guidance on how to successfully manage enterprise versus small or mid-sized clients focuses on pre-sales tactics, available information indicates that there two primary distinctions in managing ongoing relationships with larger customers: (1) continually satisfying a broad group of key stakeholders and (2) ensuring that client interactions remain more polished.

1. Satisfying a Broad Group of Stakeholders

  • The importance of satisfying a broad, diverse stakeholder group was selected as a key difference in managing enterprise versus smaller customers based on consistent recognition of this distinction by research organizations (e.g., SRI International, Gartner) and market consultants (e.g., MarketStar, Callbox, Tenfold, Unbound B2B).
  • Whereas small organizations typically have only one or two decision-makers that engage with a particular vendor, large businesses generally have multiple business leaders that are relevant for any supplier contract, per SRI International MarketStar and Tenfold.
  • As evidence of this difference, 96% of buying decisions at small businesses are made by individual business owners, whereas an average of 6 to 10 decision-makers from different departments and/or interests are involved in the supplier decisions at enterprises, according to Gartner and Callbox.
  • Although this initial dichotomy is perhaps most visible during the sales process, SRI International reports that enterprise representatives will still have to “navigate complex organization” structures and “do a lot of…working with others” to maintain these client relationships once a deal is signed.
  • Similarly, MarketStar adds that any vendor relationship with larger enterprises will involve the ongoing engagement with “big infrastructures and tiers of decision-makers from various departments,” which do not generally exist at smaller clients.
  • As such, successfully managing these larger client engagements requires the effective identification and regular engagement of a broad array of leaders, as opposed to developing and maintaining trust with only a handful of client representatives at smaller organizations.
  • Notably, Alpha Senior Director of Enterprise Sales Dan Matheson adds that this distinction translates to even the most basic aspects of communicating with large clients.
  • For example, while Alpha account managers may share a “one-pager” with a single representative at a small startup and consider the entire client informed, the Alpha’s account teams have to consciously distribute all new information to each member of a broad set of carefully chosen leaders to successfully communicate with their larger clients.

2. More Polished Interactions

  • The requirement for a more polished communication approach was also selected as a major difference between successfully managing enterprise versus smaller client accounts based on the consistent guidance of McKinsey, SRI International, Business TutsPlus, MarketStar, Callbox and Unbound B2B.
  • According to MarketStar, enterprise clients are “extremely high touch” when compared with their more “nimble” and quickly moving small business counterparts, and place a higher priority on “customized, sophisticated” communications.
  • This difference first manifests itself during the sales process, when large customers expect a “more polished presentation,” whereas smaller organizations are likely to prefer spontaneous, quickly-evolving discussions.
  • However, as McKinsey notes, larger organizations will continue to approach major ongoing discussions with vendors (e.g., contract renegotiations) with the same level of rigor, preparation and thoughtfulness, and expect the same on behalf of their vendor representatives.
  • Notably, 75% of enterprise clients spend 10 days or more preparing for every major vendor renegotiation and almost half consult at least 2-5 pieces of information during this time.
  • From a professionalism and preparedness perspective, it is therefore important for vendors of larger clients to approach these and other ongoing discussions with the same level of thoughtfulness and polish.
  • Moreover, Business TutsPlus notes that the more expansive decision-maker matrix of enterprise clients further create a need for “super-professional” communication materials from vendors, given that there is a greater need to independently circulate and obtain approval from a wide variety of leaders within these larger organizations.

Enterprise Client Expectations

Enterprise clients expect a “white glove” level of interaction with their vendors, most notably in the form of dedicated, top-tier account teams, clearly defined communication standards and regular attention.

1. Dedicated, Top Talent

  • The assignment of dedicated, top-tier vendor teams to support large client accounts was identified as a core expectation of enterprise clients based on the consistent guidance of a variety of industry researchers (e.g., McKinsey), business outlets (e.g., Forbes, Business TutsPlus) and experienced suppliers of large customers (e.g., TransUnion, Trans American Trucking & Warehouse, Elsey Enterprises, Proposify).
  • Notably, disjointed vendor relationships are the “biggest pain point” of large customers in working with suppliers, according to the latest survey of enterprise clients by McKinsey.
  • In particular, enterprise organizations regularly report vendor issues such as “forgotten follow-ups, multiple points of contact, conflicting messages” and a general lack of coordination across supplier geographies and/or departments, all of which frustrate large clients and lead them to consider other potential vendors.
  • Ultimately, McKinsey, Forbes, Business TutsPlus, TransUnion, Trans American Trucking & Warehouse, Elsey Enterprises, Proposify report that this need for clear, unified and high quality communication translates to an inherent expectation from larger clients for a dedicated account manager, who can lead cross-functional sales teams and other supplier representatives in working with their complex organizations.
  • Some vendors, such as Elsey Enterprises, take this expectation a step further by deploying dedicated “three-point teams” for each enterprise client, that include an account manager as well as two client services team members.
  • In parallel, suppliers such as Trans American Trucking & Warehouse often select their “best people” to represent their company with larger clients, so that these enterprise clients see that they are a “number one priority” and that their vendor is “dedicated to their satisfaction.”
  • Overall, Proposify recommends that the vendors of large clients account for such “extra time in your enterprise quote,” to reflect and accommodate the expectation of enterprise organizations for top-tier, dedicated points of contact within their suppliers.

2. Clearly Outlined Communications

  • In conjunction with the expectation for devoted account teams, enterprise clients also require clearly-defined lines of communications with their vendors, per Forbes, McKinsey, TransUnion and Alpha.
  • Overall, McKinsey maintains that larger clients expect a shared communications plan for working with their vendors, including a clear and “consistent cadence” for supplier/buyer meetings (e.g., monthly team calls).
  • TransUnion adds that for many enterprise clients, this expectation translates into the need for formal service level agreements (SLAs) for every contract to clarify and confirm requirements for ongoing support and communications.
  • Notably, TransUnion and Alpha assert that establishing these communication agreements is not as simple as outlining a communication cadence, but equally relies on determining “all relevant parties” for ongoing communications.
  • Unlike a “50-person startup,” larger organizations have more complex structures and processes, and the appropriate points of contact must be “very carefully” selected and engaged by vendors to ensure a successful, long-term relationship.

3. Daily Attention

Growing Enterprise Accounts

Although publicly available recommendations for how to grow existing enterprise accounts is relatively limited, data from McKinsey & Company, RAIN Group and other industry experts consistently highlights that the keys to developing follow-on sales with large clients are (1) providing satisfactory account service/support and (1) deploying value-based selling strategies.

1. Service & Support

  • Providing a satisfactory level of account service and support was identified as a best practice in growing sales with existing enterprise clients based on the recommendation of top-tier researchers (e.g., McKinsey, RAIN Group) as well as supporting survey data from large enterprises.
  • Specifically, an enterprise client’s service and support experience with a vendor is the “most important buying factor” in influencing follow-on sales with a vendor, according to the latest survey data from McKinsey.
  • As highlighted within the following chart, large customers often state that price and product reliability are the biggest influences on their sales decisions, however, in actuality, their ongoing experience working with a vendor is almost “twice as important as price.”

Service & Support

  • Corroborating these findings, the RAIN Group found within its Benchmark Report on High Performance in Strategic Account Management that three of the five most essential areas for “maximizing sales with existing accounts” directly relate to providing satisfactory support and service of client accounts.
  • Specifically, RAIN Group assessed what differentiated the highest performing teams in growing account sales, and determined that the following three factors helped increase revenue and profits with existing accounts by 20% or more:
    • Analyzing and planning to improve relationship strength in more rigorous and scientific ways “
    • Assembling the right account team and making sure eight key roles are played “
    • Establishing an effective account management process and planning tool”
  • Similarly, McKinsey reported that effectively servicing large customer accounts could grow revenue by 5%-10% or more at these customers without eroding margins.
  • According to McKinsey, this is because the complexity of enterprise-scale supply chains, production needs and downstream customers make “finding the right supplier partner” invaluable for large clients.
  • While a 2019 survey by Gartner found that satisfactory service is less clearly correlated with meaningful sales growth across small and mid-sized clients, McKinsey’s related research confirms that strong account management is essential to growing large customer sales.

2. Value Selling

  • Employing a value-based selling strategy was also selected as a best practice in driving follow-on sales with large clients based on the consistent recommendation of this sales approach by McKinsey & Company, RAIN Group and P1Learning.
  • Specifically, McKinsey & Company, RAIN Group and P1Learning assert that vendor sales and account teams are most successful in creating ongoing sales with enterprise clients when they build a “shared understanding of the value of the product or service” that a vendor is providing.
  • According to RAIN Group, building this joint value proposition has three essential components: (1) it must resonate with the client, (2) it must differentiate the product/vendor and (3) both of these factors must be substantiated.

Value Proposition

  • RAIN Group adds that vendor teams can expand this value proposition (and thereby grow client sales) by determining how to provide more client value through existing offerings (i.e., “value connection“) and partnering with the client to create new ways of delivering value (i.e., “value co-creation“).

Value Connection/Co-Creation

  • Ultimately, McKinsey found within its latest survey of enterprise clients that vendors were 25% more likely to be the suppliers of large accounts when they sold their products/services based on value, and that vendors could achieve a 10% increase in account margins through this strategy.
  • This was because an effective, joint understanding of a supplier’s value offering “shifted the discussion” during subsequent sales conversations from price to a larger focus on overall business success.

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