Profiling your target growth accounts

By Rick Johnson -- Industrial Distribution, 8/2/2007

When a customer makes a buying decision, that decision is based on certain assumptions and has specific perceptions and expectations. When the customer places and order, these assumptions or perceptions become reality in the customer’s eyes, and often become the source of costly misunderstanding.
 
Remember that the customer’s perceived value of your company drives their expectations. In addition, your company’s performance value drives your customers’ satisfaction
 
Develop a “book” on the customer and, with proper planning, misunderstandings can be avoided.

Customer profiles are the tendons and the muscles, the core of a Target Growth Account (TGA) strategy. Each element becomes a building block in the strategy’s foundation and an essential component of the sales effectiveness process.

Without good dialogue with your TGA accounts, securing the information necessary to formulate a meaningful plan becomes very difficult.

To ensure maximum benefit from the information you collect, the questions asked and the answers given should be recorded in the narrative. This allows you to understand the subject and can reinforce your ability to understand the individual TGA account.   
 
How to get the information needed
• Analyze internal historical data;
• Do outside research on your customers’ industry;
• Ask the customer directly;
• Ask the customers’ competitors (carefully);
• Talk to your customers’ customers.
 
Your account managers should be able to complete this information in one to three weeks with proper focus and discipline.
 
Customer profile form
The customer profile form records information about the internal workings of your customer. It includes everything from the company’s history and ownership to its day-to-day ordering process.

Your account managers should complete a customer profile form for each target growth account. The following are some ideas and guidelines for the types of information your account managers should look for.
 
General company information
This provides an important snapshot of the TGA prospect. It tells you exactly what kind of company you are dealing with. Areas to explore include: When were they founded? How did they get started? Are they private or public? Is their family involved in the business? Do they have a strategic plan?

Other topics: What are their growth expectations? Are they involved in any mergers or acquisitions? Who are the principals of the company? What are their demographics as it relates to their market and locations? 
 
Product
What kinds of products and services do they sell? Are their products and services seasonal? Do their products and services go through sales lifecycles? If so, how long do they last?
 
Buying process
Do they buy based on forecast, material requirements planning or the empty cabinet methodology? What is their ordering practice? By understanding their process, you can better determine the pain factors and the opportunities to become a hero.
 
Vendor practices
Are they implementing a vendor reduction program or any other type of program that has significant impact on their purchasing practices? What kinds of buyer programs do they have? Are they members of a buying group? Do they pay their bills on time? Are there any special terms required?
 
Special requirements
Determine any and all special requirements such as packaging, receiving certifications or electronic commerce. Include both product and service requirements. How much technical or application support do they need?
 
Critical needs and issues
What components are deemed to be highly critical in the customer’s operation? What about cost reduction, e-business, productivity, service and logistics? Describe major current initiatives that could affect the relationship. Examples could include vendor reduction, process re-engineering, supply chain projects, technology changes and/or acquisitions.

A current customer profile allows you to understand your current position with the TGA candidate. It provides the information that will help you understand the customer’s rules of engagement. Look at all opportunities to prove your value as the supplier of choice. Keep this information current and up-to-date.
 
The more you know about your TGA account, the better prepared you will be to shorten the distance required to meet your objectives. Documenting the customer profile allows you and your sales team to review every factor that could be significant in developing your action plan for each specific TGA customer.

The first thing that should be documented on this form is exactly where exactly you stand as a supplier or potential supplier.
 
When implemented properly, a Target Growth Account strategy can increase the focus of your sales effort on the kinds of specific activities that will lead to sales, margin and market share growth.
 
Dr. Rick Johnson is the founder of CEO Strategist LLC., a firm specializing in leadership and the creation of competitive advantage in wholesale distribution. Contact him at rick@ceostrategist.com or visit www.ceostrategist.com.