Acquiring new clients is not always the best way to grow. There are situations where you have a much easier path right in front of your eyes. It's right in front of you. And you... nothing. Because it's been in front of your eyes for so long that you can't see it anymore.
Let's face it. When was the last time you talked to your VIP clients about common interests and how to achieve them? When was the last time you truly sought a win-win collaboration? When did you not just crawl in front of a client saying you needed an order to meet a quarter? Or when was the last time you didn't send unilaterally demanding emails that - quite unsurprisingly - no one responded to?
What will change from next year? The economy, it seems, is not going to take off, orders will be as plentiful and companies will be fighting for them like flies on a cow's...
How about trying to reason with those who need you like you need them? With VIP clients? And that's what the next solo episode of Ignition is all about. What else am I discussing?
🔸 What does your ideal supplier look like?
🔸 Why should cooperation be mutually beneficial?
🔸 What to understand for a good relationship strategy?
🔸 How to write a good KAM plan?
🔸 What should a KAM plan contain?
HOW TO WORK WITH VIP CLIENTS AND KEEP THEM FOR YEARS (INTERVIEW TRANSCRIPT)
Martin Hurych
Hello. I'm Martin Hurych and this is another Ignition, today again in a solo episode. Before I tell you what I'd like to talk about today, I have one request. If you like what I'm doing, if you're listening to Zazheh or reading my blogs, then run over to my website right now, www.martinhurych.com/newsletter, and sign up for my newsletter there, which comes out every Tuesday. I've got over 1,100 owners and CEOs of engineering, technology and manufacturing companies on there already, and you're definitely not to be missed.
How to plan a year with VIP clients?
Today I would like to reflect on a topic that I think deserves attention not only at the end of the year. That topic is how to plan for the year with your VIP clients. Some say with key accounts, some say with VIP clients, within this podcast it's going to be one and the same thing.
What does your ideal supplier look like?
Before I get into that, I would like to ask you to do one thing right now, try to think about what your ideal supplier looks like, either in your business or personal life. Now honestly ask yourself if the way you want your supplier to treat you is the way you treat your customers.
We need each other
I have a few points on how to improve our relationship with our VIP clients and how to focus on what they want from us and not what we want from them. Unfortunately, that's the overwhelming attitude of companies that I see when I walk among clients. In order to have excellent relationships with our customers, our VIP clients, it's good to remember that just because they buy from you means they need you. In most industries, what we offer has a bunch of alternatives and those who buy from us have their reasons for buying from us and those are definitely good to figure out. It's also good to remember that a lot of our buyers don't want change, they only want change if for some reason we let them down or don't deliver the value they come to us for. I've said several times on the podcast here that humans are more or less lazy animals and any change is unwanted for us and if we can, we stick with w h a t we're comfortable with, including suppliers. That said, our customers are also by definition interested in a long-term relationship, nobody wants to jump back and forth.
But in a long-term relationship, they are looking for something other than just a supplier, they are definitely looking for what we might call a strategic partner in the workplace. But that means that you should delve as deeply as possible into their business, you should understand their business as deeply as possible, certainly deeper than the level of some numbers that we produce together. You are certainly expected to be proactive, not just wait and meet the demands of your VIP client. You are certainly expected to be proactive, to suggest new collaborations, new product suggestions and so on. That proactivity should be directed towards one single goal, and ironically not towards meeting your budgets.
Cooperation should be mutually beneficial
This cooperation should be mutually prosperous, but this does not mean that we will grovel before our customers or that we will kowtow to them, I am talking about mutually beneficial cooperation. If it is to be that, it must be mutually beneficial. Quite often I see that the moment we plan,
how we will cooperate with our VIP clients, we often do not tell them about it at all and plan the whole cooperation so that it is beneficial for us. We don't really look at the other side and then we're surprised that the plan we have planned in a very one-sided way doesn't work out. If this is to be a mutually beneficial collaboration, then we need to think about what goals my VIP client wants to achieve and help them achieve them, both on a corporate and individual level.
Subjectively perceived value
In a previous solo episode here, I talked about subjective perceived value. This is exactly it, if there's a perceived value by every single person that works with you, it's good to keep pointing out that value and helping those goals that that one particular person has. This also brings me back to the B2B value pyramid. What I'm describing here so far are the values fromLevels 3 to 5. I'm not primarily talking about price here at all, about specification, because you and the VIP client already worked that out a long time ago, and all of that collaboration happens at the higher levels of the B2B value pyramid. What I've just listed here is the absolute foundation of building a long-term strategic partnership. A strategic partnership means much more interdependence between our companies, mine as a supplier and the client's as a customer. It's a kind of exclusive access to each other's information.
What to understand for a good relationship strategy
Sounds nice, now you may be wondering how to fill it all in to make it happen at all. So as I walk the world, I find that paradoxically, the relatively simple strategy of working with a VIP client is rarely really a strategy, it's usually a very one-sided tactic. If we want to move up a level, we need to understand the customer as much as possible. It may seem like a lot, but in any case, I definitely recommend diving as deeply as possible into the data that the company produces about itself. I'm not just talking about great data applications like Merk, we're also talking about public information like a report, a company's annual report, their strategy, their published mission, vision, goals. A lot of times companies show all this on their website or you can find it on association websites and this data is very little appreciated and read. If you want to go one level higher, try for example to do a client's SWOT analysis, PESTLE analysis, Porter's 5 forces analysis for yourself. Put yourself in your client's shoes and try to understand what they are facing if they don't tell you themselves.
This will all happen much easier if you have regular contact with the decision makers on the other side. Quite often I see and hear amongst my clients that the person is not listening to them, that they may be their VIP client but they are not responding to them at all. Yet to be responsive to them when the only communication they have with each other is a quarterly email about additional orders so that their VIP client meets their quarterly targets. You really can't build a long-term partnership and strategic partnership like that. It is we need to have regular in-depth conversations with the decision makers about what is going on between us, how the cooperation is going, what they like, what they don't like. It's good to ask what their idea of cooperation and, where appropriate, accommodate these requests or at least clarify them in some way.
Based on that, you can then really start to build a VIP plan or a key account management plan, which I personally recommend including as many people from your company as possible. Formally establish who is looking after your client, who has what responsibilities, who has what duties and you as the owner, senior salesperson, key account manager put yourself in the role of customer success manager for your client. Not only will you understand the counterparty more thoroughly, but the more people you connect directly to your client's organization, the harder it will be to break that collaboration. I've said here before that we're lazy animals and the harder you are to replace, the more ties you have to sever as an exiting client somewhere, the more resistance you'll have among your own staff.
How to write a good KAM plan?
How to achieve this, how to actually write the key account plan? It's exactly the same as when you talk to a standard customer. The first thing you really need to do is deeply identify and understand the needs and opportunities on the other side. It seems like a simple thing, like the first few letters of the alphabet, and it really is. Unfortunately, by being with VIP clients, often for several years, this is what you forget. I often hear that we've been together so long that we know what the other party wants, or we think we do. Don't believe it, the world is evolving fast, the people on the other side are changing, the other side's strategies are changing, so keep checking what is really wanted and what the other side needs to achieve. When you find that out, anchor those goals in a formal document, talk about them and say that you will try to achieve them together, and together you will monitor that progress as well.
Set up how you will communicate with each other. I don't mean technology channels now, but talk about who talks to whom, how often and what they talk about. Really give yourself solid meetings with your VIP clients at the beginning of the year, maybe every 2 months, every quarter. If those meetings are on the calendar right from the beginning of the year, they might as well be pushed back, either way there will at least be a better chance that you will meet. The moment you remember around mid-June that you should talk to a client because it's getting close to the middle of the year, trust me, you won't find anything on the calendar this rushed either. So be sure to make some sort of communication plan as to how much the party is to take from you, what quality, what quantity, when, who is needed to do it, and so on. Just make sure you get the plan approved by the client, it's your mutual plan, it's not your wish list. Unfortunately, I often see that these key account plans are really a wish list of you, your sales director, your salespeople, and the other side doesn't even know about it. If you told someone to take 30% more from you this year just because it' s playing into your budget for next year, they might laugh a lot. Until the other side sees, understands and approves the plan because they understand how it meets their objectives, that piece of paper cannot be considered a key account plan.
What should the KAM plan contain?
In terms of what the key account plan should actually contain, I honestly recommend doing a short summary of the current state of where you both are in your collaboration. This potentially includes those analyses like PESTLE, SWOT, Porter, etc. The next chapter should be a formal definition of the client's priorities and needs, common goals for the next year, and a plan of activities, at least quarter by quarter, on how you will get to those goals and what needs to be done to get there. You should define what actions and who will create what when specifically, how you will measure progress, what KPIs you will have set together, what will be green, yellow, red, what will happen if you don't achieve that plan in each quarter. Are you going to send each other some weekly, monthly, quarterly reports, is the communication going to be only at the level of owners, bosses, sales directors? All of that should be written into the key account plan and confirmed. It's kind of a comprehensive strategy for that one particular accountant. At the moment it may look like we are talking about a 30, 50, 100- page analysis, but it doesn't have to be that way. In a maximally effective and minimal version, it can be a single page of an excel spreadsheet or some PDF. I have worked up such an example myself on the web, so if you want, you can run to the web and download it. I'm going to put it up specifically as a bonus of this episode as well, for you guys who are building key account plans for the first time, it will be richly sufficient. Everything I've said here is included, and yet it's one A4. For me, the most important thing is to talk to the customer in the first place and confirm with each other that what you want to do together in the next year makes sense for both of you.
Summary
That's all. We've reached the end and I hope that the few minutes we've spent on key account plans has given you a clear guide on how to build a few. Don't overdo it, if you're starting out, pick 3 to 5 really critical clients to develop such a plan with. If you have multiple merchants in your firm, it is possible to have a key account plan developed for the top 3 of each merchant, thus covering 100% of the most interesting part of your clientele that supplies the bulk of your turnover. If you're more ambitious, you can pick one or two businesses that you feel have a lot of potential and at the moment shouldn't be on a VIP client yet, but you suspect you can pull it together to get there. Definitely don't write key account plans for the first 20 firms, it usually doesn't make sense and you usually get overwhelmed. The point is to really work with those top VIP clients and the moment you get the hang of the principle, you can keep expanding that portfolio. For me, what we just discussed here has the potential to grow you a lot more than a quick and often messy acquisition. You have to remember that next year, based on the market feedback I'm getting at the moment, may be even tougher than this year, and acquiring new companies will be even more difficult in an open market. If you need to maintain your positions or continue to grow, which I'm crossing my fingers for you, the mutual cooperation, the detailed cooperation with your VIP clients is the part that is very often underestimated a lot and there is hidden potential here. There are hidden nuggets here that I would definitely focus on at the moment.
If you liked what I've presented here in a few minutes, run over to my website, www.martinhurych.com/newsletter, and sign up for my newsletter. More than 1,100 owners and directors of engineering, technology and manufacturing companies are subscribing at this point. Sign up, too, so you don't miss any more of this kind of advice. Dive into the key account plans, download the simple example I give as a bonus to this episode, and I have nothing left to do but cross my fingers and wish you success, thanks.
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