National Account Planning - Is it Worth It

Size Does Matter

The natural assumption may be to associate national accounts planning with large international enterprises. However, critical mass alone does not guarantee success. The fact of the matter is that the larger the company, the more challenging it becomes to develop national account program planning and the less likely it can act quickly on those plans. Size does matter, but size often slows reaction time.

A national accounts plan does not have to be a "dynamic document' in a constant state of flux. The success of a national accounts program ultimately rests on the shoulders of the field sales representatives, the branch managers and the corporate national accounts team. Therefore, a National Accounts planning document should be viewed as a set of guiding principles rather than a definitive answer to all questions. It should be written for salespeople, not the Company Executive Management team. Success of the National Accounts program still depends on the hard work and coming together of all Company employees involved in the National Accounts process.

This planning document evolves around three basic fundamentals of success in any National Accounts Program:

1. Knowledge - about the internal workings of the national accounts program and company process.

2. Understanding - of the business environment in which the company operates and the resulting clarified objectives of the national accounts program.

3. Awareness - the big picture of market and customer demand and direction.

Knowledge

First, this planning document is intended to provide a basic outline of the objectives of the National Accounts program, the process involved, the rules of engagement and direction on receiving help and support when necessary.

Second, it addresses the activity measurement and open communication (both up and down the chain of command) which are absolutely critical for success. Support from the information management system within the company can provide the fundamental elements that underlie the success of the National Accounts program. A weak information system could leave dangerous voids or even misrepresent the true picture of the National Accounts program.

Understanding

Understanding brings the field view (external view) closer to corporate headquarters. This is the primary reason a survey should be conducted. It is essential to explore how things are really being done, how the program is perceived and, most importantly, input from the field with recommendations for improvement is essential.

Understanding actual needs of the national account is also critical to the success of the program. "Understanding" involves answering the following questions:

- What do these accounts really value?

- What motivates our suppliers?

- Do these accounts view our company as partners?

- What do we know about their business?

- Are we truly the primary source?

Awareness

Recognizing the volatility of your environment is a valuable piece of the puzzle. The company may need to catch up to the pace of change within the industry to maintain competitive advantage.

While the knowledge aspect of the National Accounts program is heavily weighted toward internal perspectives, awareness needs to be weighted toward your external environment. You must be aware of market technologies and other external forces shaping the industry and driving behavior of the national accounts customers. You must monitor events and trends using an anticipating perspective in relationship to our competition. You need to ask these questions:

- How is the industry different today regarding what is expected from a national accounts program?

- What will be considered by 2008 and beyond?

- Which of our competition are driving changes in serving national accounts?

- What technologies offer the most potential, both as products and tools?

- What actions are our competitors taking to gain advantage?

- How will our suppliers react to our strategy?

Corporate 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 objective of the national accounts program can be outlined as follows:

• Develop a national presence in the market place

• Enhance the company image supporting our credibility

• Develop impressive client references

• Support growth with preferred vendors

• Synergistic with our corporate mission statement

• Rebalance the shift of power and profitability in the national account program

One of the core problems facing National Accounts program is the need to overlay a centralized sales function on an established decentralized sales force. In the past, processes and systems may not have enabled customers, prospects and even your own field sales representatives to make informed favorable decisions.

National accounts by definition have significant size and buying power providing 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.

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 is mandatory. 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."

There are four basic broad categories of added value that create competitive advantage:

1. Technology that is core to your customers' business results and beyond their internal capabilities.

2. Processes that streamline your customers' productivity, improve quality, take transaction costs out of the supply chain and provide measurable savings (unrelated to price).

3. Administrative and technical support that can reduce your customers' internal costs enough to affect bottom line operating costs.

4. Sales and marketing support that can increase your customers' top line.

A national accounts program should refocus efforts on all four of these issues.

The National Accounts program should be a support function for local branch businesses. It should be the intent of the National Accounts program to support corporate objectives by developing a national accounts presence as it strategically makes sense to do so, while at all times representing your company with the highest degree of professionalism. A National Accounts team must work closely with Branch Managers and Account Managers to create opportunities by exploiting your competitive advantage where possible, and defend your local business through national account programs where necessary. Profitability is always a primary concern and it is wise to analyze every opportunity and circumstance to ensure that the company's overall best interest is always at the forefront. The National Accounts team must recognize that timely and accurate communication is crucial to your collective success. To that end communication to keep all parties apprised of activities is essential to respond as quickly as possible to all pricing and policy issues. A documented National Accounts program guide is one of the first steps to creating an environment in which everyone can work together toward common objectives.

A National Accounts program involves many participants. It is not something you do to get customers. It is something you do with major national chains. The most successful National Accounts programs have included executive and corporate input in combination with branch and local input. Most importantly, however, is the input of the customers themselves in the planning, implementation and measurement stage.

In a National Accounts program, "the plan is the sale" and "the sale is the plan." What is presented and sold to the national accounts are not only the results but the process used to accomplish those results. Products, services, results, measurement and follow up are individual elements in the National Accounts program that guide and direct the process of the transactions and the relationship.

National Accounts planning must be a team project. This program and the transactions it encompasses have to become the product of the company and each individual national account as well as each cooperating group including the Local Account Managers, Branch Managers and the National Accounts Team. Involvement of the Executive Staff is also contributing to success in many cases.

Lastly, it is extremely important to the success of the National Accounts program that measurement and accountability are built into the process. The results measured become benchmarks established in the plan. A National Accounts program without measurement and accountability is deficient. Of course, two primary measurements are profitability and success in selling non-contract products. Other milestones may include geographic penetration, growth and product replacement.

A National Accounts program can be an exciting profitable endeavor. However, it is a program that requires clarity, planning, and definitive responsibilities. It is not a corporate initiative. Establish a "Tiger Team" involving different functional areas including filed sales and your chance of success will be greatly improved.