By definition, accounts that qualify for national account status within the supply chain environment are characterized by several common traits: a centralized, coordinated purchasing organization with multilocation purchasing influences, a complex buying process and a need for customized solutions.
Given the various special requirements, unique demands and extensive demographics encompassing these large, complex accounts, logistics professionals are increasingly introducing national account programs within their organizations to better devote their corporate resources toward serving these valuable customers.
“These programs aim to help customers simplify purchasing, streamline and improve productivity, receive predicable competitive pricing, and deliver supplier reliability,” says John Hagi, director of national accounts for AIT Worldwide Logistics. “Installing a comprehensive national account management approach within a small to midsize business environment requires financial investment, long-term focus and multifunctional capabilities along with realignment of the sales organization.”
Smart Business sat down with Hagi to discuss the risks and benefits associated with implementing, maintaining and managing a successful national account program within a logistics organization.
How is the business relationship enhanced when a customer becomes a national account customer?
As the national account and supplier relationship develops, the extent of information sharing across the organizations advances. Once the relationship moves from that of vendor to partnership, the supplier firm enhances its knowledge of the national account’s business environment, playing a pivotal role in helping to meet the national account’s goals. Customer-centric enhancements often include dedicated customer support, IT synchronization, top account status and executive-level sponsorship.
The supplier will also often be driven by its customer to develop new product offerings. Simultaneously, the national account secures better information on the supplier firm’s competencies and develops technologies to improve its own strategy development. In essence, developing this heightened understanding leads to improved performance and optimization of operations for both organizations.
Critical success factors for a national account program include organizational alignment, senior management commitment, streamlined processes and systems for communications and information management, selecting strategic accounts, account planning and rollout, relationship and program metrics, and the potential to realize the benefits of a mutually profitable strategic account relationship.
How can a national account program benefit the entire logistics organization?
National accounts benefit the entire organization through increased revenue, leveraged purchasing, product and IT development, and overall general synergies across the organization. Furthermore, skill development within the local sales organization is often driven through team selling to national accounts, resulting in a local sales force that sells with skill to both small companies and larger, more diverse organizations.
It’s not unusual for a company to feel bogged down or overwhelmed by the heavy demands of a national account when there are so many other ‘eggs in the basket,’ so to speak. But as with any account, suppliers must maintain a level of internal control as it relates to the service demands of a customer. This becomes even more critical when developing business with national accounts, as the risk of failure increases when venturing into unproven service or market segments. Providers must stay true to their core while also remaining open to venturing into new sectors.
When tackling national account business, how does the sales pitch and cycle have to change?
The ‘sales pitch’ changes dynamically when selling a national account program to a customer. First and foremost, the customer’s purchasing behaviors are different, as the sales take place at many levels and from within multiple departments. The complexity of the sale increases exponentially from a contractual standpoint within the purchasing organization to the end user at the shipping level. This complexity is further compounded by local mores within a national account as well as those of the supplier.
The sales effort must become a well-balanced act between local and national sales. Companies must master the challenges of adapting to this extended sales cycle and degree of supply chain complexity while identifying the individual incremental steps necessary to close the sale and synchronizing collective efforts on the local and national level.
In today’s slowing economy, sales teams must also be ultrafocused on value, not price. Customers are increasingly being faced with challenges affecting their business’s bottom line, and the savvy salesperson identifies opportunities to provide solutions that bring real value to his or her customer without simply taking the ‘do more for less’ approach.
JOHN HAGI is director of national accounts for AIT Worldwide Logistics, Inc., headquartered in Itasca, Ill. Spanning numerous nationwide locations and an ever-increasing network of international partnerships, the global transportation and logistics provider delivers tailored solutions for a wide variety of vertical markets and industries. Reach him at firstname.lastname@example.org or (800) 669-4AIT (4248).