Mike Cameron has previously outlined how key account planning can assist businesses with sales of products and/or service solutions. He now discusses the importance of identifying buyers’ strengths and weaknesses, and explains the concept of ‘stop signs’ in the evaluation process.
The previous two articles about Key Account Plans laid the foundation for understanding the importance of:
• A good sales strategy – namely, to set yourself up in the right position, that is, to be in the right place, with the right people, at the right time, with the right solution so that you can make the right tactical presentation to achieve your
sales objective.
• Creating a framework through Key Account Plans (KAP) that fosters a win-win situation and manages every sales objective as a joint venture.
The process of creating and managing a KAP has seven steps which can be clearly identified in Figure 1:
• Step 1. Decide what you are selling, ie understand your sales objective.
• Step 2. Test your position and identify buyers, ie understand your customer base and your customer’s organisational chart, and identify buyers.
• Step 3. Rate and evaluate your buyers, ie their roles and influence, and interest in your sales objective.
• Step 4. Identify strengths, weaknesses, opportunities and threats (SWOT analysis), eg review alternative positions.
• Step 5. Create an action plan, ie draft and implement SMART action steps.
• Step 6. Close the deal, ie ensure that paperwork and your process is “painless”.
• Step 7. Monitor and seek feedback, ie monitor delivery, check that delivery meets (or exceeds) the promise, seek feedback from your customer’s buyers, review future business opportunities (Business Review and Development – or BRAD – meeting) and nurture the relationship.
In the previous article in this series, we reviewed, in some detail, the first three steps in the procedure. In this article, we will begin a thorough review of Step 4 – since it is a key function in the process of creating a Key Account Plan.
STEP 4 – SWOT ANALYSIS AND STOP SIGNS
A. IDENTIFY ALL YOUR BUYERS.
(i) Degree of influence (rated as high, medium or low)
It is important for you to appreciate
the degree of influence that each of the buyers can and/or will exert on your sales objective, eg:
• If your advocate or one of the other buyers refers to one of their technicians’ expertise or an outside consultant’s knowledge and expertise, then you should pay them more attention and your selling strategy should reflect that “outside” influence.
• Your economic decision maker may be the critical person in the decision process but in some cases he/she may have delegated the responsibility for the decision process to someone else so that they become the “rubber stamp”.
Note: Although an economic decision maker may delegate responsibility from time to time it can always be taken back at a moment’s notice – so beware!
There are five degrees of influence (critical factors):
1. Organisational impact. Where/how does your proposal assist or support your customer? If your proposal is a critical part of your customer’s strategic growth and/or future well-being then it is highly likely that the CFO, or even the CEO, will be a key member of the decision-making team due to the proposal’s potential impact on the organisation.
2. Level of expertise. Which of the buyers is most knowledgeable about the key aspects of your proposal/solution? Who do the buyers turn to for advice?
3. Location. Where are your buyers located? Is he/she within the same office as the organisation’s other buyers? Note: If one buyer is in London and the other four are in Melbourne, guess which buyer will have the least influence?
4. Personal Priority. Which buyer personally will be affected positively by your solution? The higher priority, on a personal sale, that your sales objective has for a buyer then the greater likelihood that he/she will try to exert a significant degree of influence on the outcome of the purchasing decision.
5. Politics. Internal politics is probablythe most common and single most irritating factor.
Note: Reporting structures may change; some of your buyers may move on; new people may be brought into the decision-making process and technical expertise or evaluation may be sought from outside the organisation.
(ii) Buyer response modes. This critical element is all about knowing buyer attitudes – how the buyers perceive your proposal. It is important for you to appreciate that they won’t buy if they don’t see an issue, a problem, a solution or a benefit. You need to identify their current receptivity to change, especially the change to their business that your proposal represents.
Buyer response modes are determined by:
• The buyer’s perception of their current business situation.
• The buyer’s perception of how your proposal/solution is likely to impact upon their current business situation.
• The buyer’s perception of whether or not your proposal/change will close the gap or discrepancy between what is seen as their current reality and the future result(s) that they wish to achieve.
Regardless of the quality of your proposal/solution, a buyer will not be receptive to change unless he/she recognises the gap between where they are now and where they want to be (frequently called a “discrepancy”).
There are four potential response modes:
1. Growth. The buyer does perceive this to be an essential discrepancy and feels that the gap between current reality and the desired results can be closed only if the quantity can be increased, quality improved, or both. If your offer shows how they can do more or better then it will resonate with this type of buyer.
The risk when dealing with a buyer in growth mode is that they are keen to say ‘Yes’ to any proposal that offers an immediate solution to the discrepancy that they have identified – though not necessarily yours. It is critical that your proposal is seen as the change that will reduce or eliminate the discrepancy and in the timeliest, cost effective and/or beneficial manner.
It is a mistake to believe that the buyer is necessarily talking about the company’s desire for growth. Frequently, it is about their personal reaction to your proposal. They want more, better, faster and improved product or service.
2. Trouble. The buyer can also see a discrepancy or a gap. That person has a problem or deviation or discrepancy from where they prefer to be, where they are or where they are heading; they want a proposal that will help them move their organisation back to where they believe it needs to be. In simple terms, if the proposal helps that buyer eliminate or mitigate their problem, they are likely to be strongly supportive.
Nothing gets the attention of a buyer more than when she/he is in trouble mode. They are looking for ways to avoid a loss, improve their situation, reverse the trend or prevent a potential crisis. This buyer wants to rectify issues within their business process/procedures and get back to normal. Usually, they are not interested in the cheapest bid; they are looking for someone who can provide the solution – and as
quickly as possible. Obviously, customers in trouble mode will take precedence over all else, including growth mode.
Don’t confuse trouble for growth when the buyer makes a statement like: “I need more right now.”
3. Satisfaction. The buyer does not perceive a discrepancy or gap between their current reality and the outcome that he/she have planned to achieve – this buyer believes that they are “on track” and is clearly satisfied with the status quo so they see no reason to change. In simple terms, “no problem, no growth need, no sale”.
The first two response modes were easy to understand but the last two are not. The buyer who sees no gap or discrepancy between the results they require and what your proposal offers is in satisfaction mode.
The buyer in this mode requires a “stop sign” in their view, there is no discrepancy or gap for your proposal to close, and therefore there is no receptivity to change. This buyer is wary of any kind of change and, in order for your proposal to be of any potential interest, she/he must move into trouble or growth mode. However, another buyer, who is supportive of your proposal and has identified the benefits that your solution offers, may be able to move the person in satisfied mode to a different mode. Over time, you may be able to demonstrate that there is a gap or discrepancy through offering a demonstration, referrals or additional supportive information.
4. Optimism. The buyer perceives reality as being far better than any hoped for results. These buyers are also unreceptive to a proposal that brings about change. However, changing business conditions can move this type of buyer from overconfident to trouble mode extremely quickly, so always be ready to capitalise on such shifts.
The same principle as point 3 above applies to overconfident buyers. This is the most difficult of buyers to sell to. Usually, buyers in this mode can’t be swayed. They don’t realise that things are too good to be true. This person will require a “stop sign”.
Each buyer falls into one of the above four modes regarding the problem you are solving. None of them will support the buying decision if they don’t wish to either avoid a loss or gain a benefit. You need to answer the question: “Does your customer’s plan to achieve a particular outcome match the expected results based on their current performance?”
If “Yes”, then this customer is unlikely to be a good candidate for your sale objective, regardless of the selling effort and time that you are prepared to commit to this prospect; they are satisfied (Mode 3). It doesn’t matter whether they really are on track or not, just that they believe that they are.
If there is a real problem ahead but they don’t perceive it, then this customer is optimistic (Mode 4) and it is highly likely that they are not going to buy your product or service. A lot of sales time can be wasted in this category.
The customers and buyers in which to invest your time and effort are in growth (Mode 1). They see an opportunity and know they are on track to achieve it. Customers and buyers in trouble (Mode 2) should also be on your list of priorities since they don’t see themselves maintaining their current performance or achieving their planned results.
Trouble mode prospects have the better potential to offer you success since your product, service or solution may have the ability to address a fear they have of losing what they have currently versus growth mode prospects where you are offering a solution that will potentially meet their desire for a gain. “Fear” tends to be a better motivator than “greed”.
People buy when, and only when, they perceive a gap or discrepancy between reality and their desired results. Remember, it is as important, if not more important than determining what to sell, that you know all about when to call on a prospect or customer.
B. KEY ACCOUNT PRIORITISATION
The basic principle of managing and prioritising your key accounts is to match the time and effort invested in any given account to its potential revenue (or, ideally, margin contribution). However, that potential is actually the product of two things: (i) how attractive a given account is (in terms of size, product mix, etc), and (ii) how achievable it is for your company and sales team to win the business. Ideally, you want to focus on customers and prospects who offer opportunities that are both highly attractive and highly achievable. With this in mind, the following list of questions offers you the opportunity to assess the attractiveness and achievability of your potential prospects and existing customers, eg:
a. Attractiveness:
• Does this prospect have a need for something that we can offer?
• Is this opportunity with an existing customer (lower cost of sale)?
• Is this a significant opportunity in terms of value or potential repeat business?
• Does this opportunity offer a good margin potential?
• Will this prospect or existing customer look at factors beyond price?
• Will this opportunity meet our company’s strategic objective in any other way?
b. Achievability:
• Is there already an existing supplier/vendor with a strong relationship?
• Does the prospect have an important or urgent need (fear of loss or wish to gain a benefit)?
• Which stage of the buying cycle are they in (generally, the earlier the better)?
• Is the prospect or customer seeking advice?
• Is the prospect or customer prepared to invest in the buying process?
• Does our proposal/solution better meet the prospect’s needs and buying decision criteria than that being offered by our competition?
• Is the prospect likely to perceive any insurmountable risks associated with our proposal/solution?
• Do we have any significant advocates or adversaries within the prospect’s organisation?
Traditional qualification criteria tends to focus on the potential size and profitability of a new account, whereas the additional factors listed above tend to be more value-based.
Attractiveness, in this context, refers to the potential long-term attractiveness of a prospect, rather than the value of the initial opportunity.
You should actively seek out small opportunities with large prospects and/or existing customers since small “wins” have a habit of growing quickly if you actively service the account, implement customer-focused strategies, meet and/or exceed your initial promise and follow-up at the conclusion of the deal.
C. STOP SIGNS AND TRAFFIC LIGHTS
Stop signs and traffic lights are symbols used to highlight areas that need further attention, eg:
• A stop sign advises you that you need to stop and review your position before moving forward.
• A stop sign should not be seen as a minor annoyance; it is an indication that there is a potential “roadblock” or missing information that could “derail” your sales proposal. It indicates that action is urgently required.
• A stop sign is positive because it assists you to plan your tactical moves whilst identifying the potential for trouble.
Once you have prepared and offered a well considered alternative position you can eliminate the stop sign – while it also offers you a unique opportunity to leverage from strength (ie an area that clearly differentiates you from your competition).
a. Stop signs and strengths.
• Stop signs:
• Critical information is missing.
• Uncertainty about the current information.
• Any buyer who has not been contacted.
• A buyer who is new to their job.
• Reorganisation.
Note: The more stop signs that you can identify, during the pre-meeting evaluation period, the better, eg:
Strengths.
• Areas of differentiation.
• Opportunities that can be used to improve your position (strategy).
• Must be relevant to your current sales objective.
• Diminishes the importance of competitors.
• Diminishes the importance of price.
When compared with the average salesperson, high performers consistently identify a larger number of stop signs within their KAPs as they begin the strategic analysis process and prepare an effective action plan designed to achieve their sales objective. They treat the following as automatic stop signs:
1. Missing information. If you have a
buyer whose role you don’t fully understand, or you can’t identify a key player. Always consider missing information about buyers and their roles as a signal that your sale may be in danger.
2. Uncertainty about information. It is important to reassess buyer roles whenever you become concerned or uncertain about the information that you already have in
your KAP.
Whenever you attempt to fit questionable information into your strategic analysis or action plan, you run the risk of ignoring what you really need to know.
3. Any uncontacted buyer. Any buyer that is missed or ignored is a potential threat. You don’t have to be the individual who makes that contact (in fact that may not be an ideal strategy) but you, as the key account manager, need to ensure that contact is made with all the people who can and will influence the buying decision.
You should select and use the person who is best qualified to meet a particular buyer. In some cases, it may be another person within your organisation; in others, it may even be your advocate from within your client’s organisation.
4. Any buyer who is new to their job. This is an automatic stop sign, especially if you haven’t already made contact with these people. However, they shouldn’t remain as threats since one of your roles as a sales professional is to transform as many new buyers as you can into being supportive about your sales objective.
5. Reorganisation The new buyer is usually easy to spot; however, the more difficult situation to deal with is reorganisation because it may impact upon your sale in ways you have little or no opportunity to influence – hence the need for a stop sign. The job titles associated with your existing contacts and their current job roles and accountabilities may stay the same but in reality they may have changed quite significantly. You should always re-identify all the players in the four buyer modes as soon as possible after any reorganisation within your existing customer’s or prospect’s organisation.
D. LEVERAGE FROM STRENGTHS
When you know where a stop sign is you can work to eliminate that potential issue and identify the challenges that it offers you. The important concept here is to convert stop signs into opportunities for strategic improvement in your tactical plan (the action steps within your KAP).
A strength is not a feature or a benefit (or any aspect of your product, service or solution) since your solution is only an advantage when the customer’s buyers perceive the value that you are bringing to their business. A strength:
• Is an area of differentiation, which enables your existing customer or prospect to identify a difference between the solution you are offering and all their alternative options. They must be able to clearly identify why your difference is worthwhile to him/her or your key feature and benefit statements may prove worthless.
• A strength improves your position. Your ability to identify and articulate a particular strength increases your chances for success in achieving your sales objective. However, by definition, if it doesn’t do that, then it isn’t a strength. Anything that improves your appreciation of the complexities within your prospect’s organisation during the sales process, provided it is an area of dysfunction, can be considered as a strategic strength. In turn, anything that inhibits your understanding should be seen as a stop sign requiring immediate attention.
• A strength is relevant to your current sales objective. When creating action steps within your KAP, it is critical that you focus on one manageable piece of business at a time. Given this cautionary note, your strength must be considered important to your customer’s buyers while supporting your current sales objective.
E. SUMMARY OF STRENGTHS
1. They differentiate your solution and your company from competitors.
2. They are opportunities to improve your position (strategy).
3. They are relevant to the current sales objective within the KAP.
4. They diminish the importance of price competition.
Mike Cameron is an IQA member and the principal of Strategically Yours. Visit strategically.com.au
REFERENCES & FURTHER READING
Cameron M. Key account planning: The profile of an ‘ideal’ customer? Quarry 28(4), April 2020; 36-39.
Cameron M. Developing key accounts for new and existing customers. Quarry 28(7), August 2020; 44-47.