B2B Sales Orgs’ Top Accounts Cut Spending During The Pandemic
Surprising to no one, the COVID-19 pandemic has shown to have undercut business-to-business spending. A survey by research and advisory firm Gartner found that 41 percent of key customers or accounts indicated that the economic implications of COVID-19 significantly impacted their spending with B2B sales organizations. Gartner’s survey of 618 B2B key customers also found that while some increased spending with B2B sales organizations, only 18 percent spent more than 10 percent since January 2020.
“Chief sales officers [CSOs] have long struggled to ensure their key accounts perform according to expectations—in fact, 53 percent of key customers purchased less than half of their supplier’s total offerings in 2020,” says Robert Blaisdell, senior director analyst in the Gartner Sales practice. “After facing a prolonged period of market disruption and conservative customer decision-making, CSOs are looking for realistic growth revival strategies for 2021 and placing increased importance on their most strategic relationships. As a result, really nailing key account management in 2021 will be a top priority.”
Gartner has issued several recommendations for CSOs drawn from its research. The first is to renew focus on the key account value proposition—a compelling way to communicate the unique benefits that key customers receive in return for investing the time and effort required to partner at a deeper, more strategic level. However, it advises CSOs to not assume customers implicitly know they’re a key customer or understand the value proposition of being one as this assumption results in misaligned internal stakeholders and disjointed customer expectations.
Gartner research shows that 79 percent of key customers who had a clear understanding of the benefits available to them from the relationship provided their supplier with benefits in return—including increased access to senior executives and more visibility into business strategy. A sales organization can reinforce the key account value proposition by embedding it in account plans, internal review sessions and joint planning discussions with customers.
CSOs are also encouraged to pursue growth through collaborative partnerships. Most sales organizations struggle to evolve beyond simply selling to engage in “collaborative partnerships.” In fact, once in a strategic partnership, Gartner’s research shows that only 40 percent of key customers report their supplier puts a clear focus on potential growth. However, leading sales organizations that keep their short-term goals in context and engage in longer-term partnerships focused on customer growth reap significant benefits.
Sixty-nine percent of key customers who said they collaborated with their supplier to determine shared goals of the relationship found the supplier more effective in aligning its strategy with their objectives. Gartner says that CSOs should look to transform joint planning/performance reviews into more forward-looking sessions with active customer participation centered on improving the customer’s business outcomes.
Guiding customers through digital touchpoints can also deliver benefits as in the rapid shift to virtual and digital engagement due to COVID-19, virtual buying is no longer perceived as a short-term trend. As a result, key customer engagements and interactions will evolve, too. Gartner notes that 40 percent of key customers said they would prefer most or all of their post-pandemic interactions with suppliers to remain virtual. However, less than half (48 percent) agreed that their suppliers provided clear guidance on the best virtual touchpoints to use.
Gartner research points toward a new reality in which suppliers need to recognize the value and importance that complimentary virtual/digital touchpoints can bring to their most strategic customers. CSOs are encouraged to equip their organizations to cater to new touchpoint preferences and arm customers with the resources to exploit the new touchpoints effectively.
And finally, Gartner says that CSOs should reinforce the growth-focused role of key account managers. Only seven percent of key customers view their key account manager as a business-growth-focused advisor to their organization. Instead, more than 40 percent say their key account manager is a tactical-focused coordinator of day-to-day activities. In order to improve key account retention and growth, CSOs must ensure that their key account managers are consistently engaged in improving key customers’ business outcomes and providing proactive guidance to help customers identify and pursue their own goals.