“Relationships matter in this business.”
It’s an old maxim we’ve heard repeated since time immemorial—in reference to, it seems, just about every business under the sun. But at the end of the day, do better relationships actually translate into revenue?
A growing body of research suggests that they do—and the difference is staggering.
A study by sales guru Keith Ferrazzi’s Ferrazzi Greenlight looked at 16 leaders of high-performing strategic account management (SAM) teams, and found that accounts with dedicated SAM teams grow an average of twice as fast as traditionally organized accounts.
Some even reported growth of three and four times that of conventional sales teams. This held true across a variety of companies, from software maker Autodesk to German engineering and electronics conglomerate Siemens, over an extended period of time. Siemens’ strategic accounts experienced nearly three times the companywide growth rate from 2005 to 2010, a phenomenon that translated to defined industries like metals and mining as well as regional markets like Brazil.
How do SAM teams accomplish this impressive growth? The foundation of their success lies in a fundamentally different approach and set of incentives than conventional sales teams.
Sales consultancy RAIN Group identifies key areas where SAM teams differ.
What makes a Strategic Account Management (SAM) team different?
Strategy:
Broad vs. Narrow Focus: Whereas conventional sales teams focus on closing specific sales transactions, SAM teams have a much broader purview focused on creating value through increasing customer satisfaction, value co-creation, and operational and structural alignment with customer needs.
Timeframe:
Long Term vs. Short Term: Conventional sales teams are measured on weekly, monthly, and quarterly sales quotas. SAM teams look to a more distant time horizon, with the aim of growing accounts over a multi-year relationship.
Team:
Individuals vs. Extended: Conventional sales teams are generally made up of single contributors or small teams focused on short-term transactions. SAM teams are extended, fluid groups led by account managers focused on executing a long-term strategy.
Labels: SAM internal language is typically more client-oriented in its wording. What conventional sales teams generally call “needs discovery” becomes “value creation sessions” or “facilitated strategy sessions.” This sets a tone that emphasizes strategic partnership over transactions.
Buyer Perception: Customers are typically wary of sales professionals, because they see them as having a singular focus on the next transaction. However, buyers are often more trusting of SAM teams, and openly pursue a collaborative relationship based on value creation with them.
Long-term Value in AR Factoring:
All of these differences translate into relationships based on partnering with the customer to create long-term value. This is a universal concept that resonates in virtually any industry, but is particularly attuned to products and services with multiple value propositions.
Accounts Receivable Factoring is a prime example of such a service, as it provides access not only to alternative financing, but also to ancillary services like billing and collection, and expertise such as international networks and internal customer credit ratings. Small business owners are often spread thin trying to keep up with the needs of a rapidly growing young business, and AR Factors can function as valuable partners in identifying areas for additional value creation outside of the business’s core functions.
The result is a more complete value chain, as the factor optimizes non-core activities and allows its customer to focus on generating sales. Factors that allocate resources to SAM will consistently generate more revenues than those focused on conventional sales cycles, as they become consultative partners in growing a successful business over the long term, rather than salespeople scrambling to make their quarterly targets.
Does your business use SAM principles? How much do you think relationships impact your business’s sales? Tell us in the comments below.
Michael McAtavey is an associate of Harborcove Financial. He writes articles around business finances and general small business advice to help small business owners improve their cash flow and get the information they need to run their business successfully.
