Growth customers - Identify the hidden gems in your account base
To determine which accounts to manage strategically, companies typically use revenue as their main criteria. On one level this makes sense. Managing accounts strategically requires a large investment in time and resources, so receiving adequate revenue to justify this investment is valid.
However to achieve your company’s strategic objectives, there are many other factors that influence whether an account deserves a greater investment in time and resources.
One type of account that is often overlooked is a high growth account. High growth accounts have the potential to underpin the future success of your company. However you will not identify them based on their current revenue, so you need to study their strategy and their potential.
During their growth phase, high-growth accounts need companies to support them because they are often resource- poor as their growth exceeds their own resources. So high-growth customers rely on their key suppliers to support their growth by helping develop and execute their plans.
These high-growth accounts will be too small to attract the attention of your competitors, and these accounts don’t have the time or resources to regularly go to market. So the opportunity exists to provide real value to them to support their growth, and achieve above average profits for your company.
One common example is companies expanding geographically.
For example, a company who provided store location analysis to the retail sector had a retail account with aggressive growth plans to expand nationally. The supplier had become aware of this through engagement between their CEO’s and publicly available information including AGM presentations and information in the business press.
Based on the company’s recommendations for store location, the first few stores opened performed ahead of expectations and this built high trust and confidence. This high trust and confidence and a good strategic account management plan, resulted in the retail account working exclusively with the store location company for the next three years as they expanded nationally.
After three years, the retail customer was a Top 5 account. Meanwhile the store location company had built a unique insight and understanding of the account creating barriers to entry against competitors. Had they not been aware of the account’s strategy, they would not have made the decision to invest time and energy in the account, and would not have developed the account to become one of their most important.
For both customers and suppliers, a key element of increasing profits is realising the full potential of strategic relationships. High growth accounts have specific needs and you can create significant value for these accounts by working with them to improve productivity, reduce costs and increase revenue.