Every company wants strong, long-term, profitable relationships with their top customers. Needless to say, there is fierce competition for customers like that. Companies in those battles risk becoming commodity vendors with thin profit margins.
So how do you successfully compete and win the hearts and wallets of these highly desirable customers? One of the many well-known account management methodologies in the market today, Large Account Management Process (LAMP) from Miller Heiman, uses a concept called the Buy-Sell Hierarchy to illustrate and escalate your relationship within an account.
Can you classify your customer relationships into these five categories?
1. Deliver commodity that meets specifications
In this category, you are a reliable low cost vendor. The hard part is maintaining the cost advantage and keeping the customer relationship secure over time.
2. Deliver “good” products and/or services
Your products and services have unique capabilities. But in a highly competitive environment, you may not be able to hold onto these “bells and whistles” differentiations.
3. Provide “good” services and support
You provide services and support that are unique or specific to the customer’s needs.
4. Contribute to business issues
You understand your customer’s business problems and objectives, and are viewed as a trusted advisor. Because of this relationship, customers are willing to pay a premium for your solution. You sell higher up organizationally and within the value chain.
5. Contribute to organizational issues
You are now at the highest level in the Buy-Sell Hierarchy and even help customers with organizational issues. 
As you move up the hierarchy, your competitive advantage deepens and widens. You face fewer competitors and less pressure on pricing. But as you would expect, there is an increase in expense, resources and time to establish and maintain those relationships. The real trick is to make it easier and more cost effective to build those relationships - smaller steps so to speak.
Example
I worked with one insurance client who sold in a highly competitive market and was trying build level-4 executive relationships with their institutional providers (hospitals, clinics, etc.). As the diagram below shows, many people from the insurer worked with many people from the providers. This was a broad and deep relationship.
The problem for the insurance company was providing coordinated and consistent communications. Senior-level meetings with the provider were often undermined when my client lacked information about normal operational issues. The providers were not impressed. So the insurance executives asked for thorough briefings before their visits. Although this worked, it proved to be time consuming and disruptive for the insurance company.
The insurance company decided to streamline this process and took the following steps:
• Centralized most information in a CRM system while protecting sensitive data and separating the provider database from the CRM
• The CRM included a common calendar, call reports, financial data, and partner program information
• The provider management team took responsibility for coordinating efforts and ensuring proper coverage
Summa helped the client to:
• Build a data model that reflected the complex relationships among the various entities
• Develop a way to prioritize call management
• Provide executives with accurate account summaries
This effort freed up the executives to focus on more important things such as business and organizational issues. As Miller Heiman points out, level-4 is where you establish a strategic relationship focused more on the customer’s business issues and less on price and competition, leading to more profitable relationships if you can effectively manage the costs. For my client, it was an investment in maintaining an important customer relationship.
How can you improve your customer relationships in smaller, less costly steps? These tips can help.
1. Know where you stand on the Buy-Sell Hierarchy
Large accounts will likely have multiple relationships with your company. Purchasing may see you as a commodity vendor or a product/service provider but the line-of-business manager may see you in a more strategic capacity. Each of these relationships needs to be serviced appropriately for a successful overall account relationship.
2. Make access to relevant content easy for customers
You can provide content to self-directed customers in a variety of ways ranging from shared folders to sophisticated content management systems. Consider developing automated customer journeys in a marketing automation application. Your customers or partners can find what they need (self-selecting appropriate information) without your involvement. Furthermore, data about their journeys can go into their customer or partner profile to provide additional account insight.
3. Unburden your account manager
Tools for communication (internally and externally), electronic collaboration, shared resources such as CRM or CPQ, among other applications can free up time for an account manager to spend on customer facing high value activities instead of meetings and reviews. Consider using automation tools to more easily disseminate internal information.
4. Prioritize your key accounts
Account managers as well as companies have a limited amount of time and need to prioritize their customers. Consider a rating system (e.g., A, B, C, D) that ensures the right frequency of communications for high priority accounts while ensuring that lower rated accounts are not ignored.
5. Educate your account team
Collaboration products, such as Salesforce’s Chatter, allow you to share critical information about accounts that is context appropriate (e.g., associates with a Selling Opportunity) with minimal effort.
Higher level relationships often have much larger paybacks. Because of costs (people, time and money), companies have to be selective about the companies they target for these relationships. But with the use of marketing automation and CRM, as well as the growth in self-directed customers, the investment per account can be lowered. As you grow your account base, know where you stand in the Buy-Sell Hierarchy, and invest accordingly.
