In these challenging economic times, it is more important than ever to nurture customers whose value is not only immediate, but also long term. A company's most important customers are, in effect, its most important revenue generators. But with times being what they are, your company's key customer today may not be so tomorrow.


Columbia Business School Professor Noel Capon

"The more turbulence in the economy, the more you need to have a system in place to identify which of today's smaller customers may become the bigger customers of tomorrow," says Noel Capon, R.C. Kopf Professor of International Marketing and faculty director of Managing Strategic Accounts. "If you can identify a smaller customer that is poised to grow, you have the opportunity to get in there early and do a first-rate job."

Part of doing a first-rate job is thinking beyond - sometimes far beyond - traditional supplier-customer relationships. One example Professor Capon cites in Managing Strategic Accounts is a packaging company that supplies packaging machinery and the corresponding materials. In the traditional supplier role, the company makes sure their machinery and packaging work well for the customer.

But no longer are they just a supplier. The packaging company has branched out into a new partnership role with its customers: marketing. For example, if they have a customer that is a milk company, not only will they supply the milk packaging machinery and materials, but they will also work on a marketing plan for the milk company.

"In other words," says Professor Capon, "they become a marketing advisor. They don't get paid for that consulting role, but they are working to help make their customer successful. And if they do a good job, it strengthens the business relationship."

A packaging company preparing marketing plans? It may sound like a leap, but the reality is that whatever a company can do to create more value to the customer, the stronger the relationship and the more likely it will continue through difficult economic times.

"Of course, you have to remember your core business," notes Professor Capon, "but if you can bring other value - which may or may not have something to do with your core product - that is very valuable to customers. Consider moving away from being just a supplier, and look for alternative ways to deliver value. Think more broadly about how to make your customers successful."


Here are four key points to remember about strategic account management:

  1. Examine all of your skills and resources as a company. What else can you offer your customers in addition to your core business?

  2. Show value to the customer, but also show value to your company. Demonstrate that the program is really working. "There are all sorts of claims on resources throughout an organization," says Professor Capon, "and yours is just one of them. So you have to show your worth and measure the profit. This type of measurement is difficult, but necessary. If your customer is an asset, and you're investing in that asset, you have to show that the investment is paying off."

  3. Find a competitive advantage. "Competitors tend to get better in terms of product, so you have to find other ways to be more competitive," says Professor Capon, who is also the faculty director of the program Strategic Pricing.

  4. Develop a solid strategic account management plan. Many top companies spend a lot of time on account management, notably IBM, Xerox and Citibank, for example. "These companies focus on the 20 percent of companies that bring in 80 percent of the business," explains Professor Capon. "And they have real measurements not just across products, but across their customers."


 

Professor Noel Capon is the author of several books, including Key Account Management and Planning, Managing Global Accounts and The Marketing Mavens. In addition to Managing Strategic Accounts, he also is the faculty director of Strategic Pricing and Global Account Manager Certification Program.