This is a case study from a longer Velocity article, "Total Value Contribution: Speaking the customer's language to drive strategic results" by Joseph Pinzon. Joseph Pinzon is regional vice president for corporate accounts for Konica Minolta Business Solution's southern region and a member of the SAMA Board of Directors. If you'd like to read more about the conversation on price-setting myths, check out the original article Do me a favor: Pause for a second and think about what the word value - the value of your organization, the value of your products and services - means to you. If you're like most strategic account management professionals, your answers include phrases like "what we bring to the customer," "cost savings," "reliability," "efficiency," "industry knowledge" and "innovation."All these answers are important and will resonate at some level within your customer's organization, but did you really articulate your true value? To key stakeholders within a global organization - in other words, the people you have to convince to partner with you and your organization to pay for your products and services - these above-mentioned value statements basically amount to table stakes. The fact is that if you're a business unit leader, the business elements YOU value most are top-line revenue, bottom-line revenue and business-unit growth, as these are the key drivers and fundamental components for measuring job performance.So if you're a SAM and you walk into the office of a BU leader responsible for an area in the oil and gas industry, for example, and you're talking to him about value in terms of your organization and your products, you're not speaking to him in his native language. Why? Because you're not talking about what's important to his organization and his organization's strategic goals, which - in his world - is finding, extracting and selling energy. So when you're talking about improving operational efficiency by X percent, about how innovative and reliable and knowledgeable your organization is, you're not partnering with this BU leader's drivers and initiatives.Here is the key: What we think of as value, unless vetted extremely well against a company's global initiatives, may very well not mean value to your customer. And that's why many SAM organizations' closing ratios are so poor.Konica Minolta Business Solutions is a leader in enterprise content management, technology optimization, and Managed IT and cloud services. Konica Minolta has designed their SAM program around the idea of partnering with customers on the total value contribution (TVC) to their business related to Konica Minolta's product and service solutions. This always means - and I mean always - framing the value proposition in terms of its contribution to their customers' top-line revenue, bottom-line revenue and business-unit growth. Because if they fail to do that, they're going to end up with one of two outcomes: Either the customer flat-out says, "No thank you," or Konica Minolta ends up being funneled into Procurement with minimal perceived value. Neither outcome is acceptable. So how does Konica Minolta help their SAMs get the most out of their interactions with their customers' strategic sourcing departments? Like SAMs everywhere, each of their account managers is required to create a comprehensive account plan for each account, including i intelligence on the customer's strategic drivers and initiatives, key challenges and critical success factors. But most importantly, each of their SAMs is required to get in front of their accounts every 90 days with a highly qualified and quantified proposal that's delivered in the customer's lingua franca, i.e., in terms of Total Value Contribution. In other words, each of their SAMs engages in their strategic accounts with a proposal that demonstrates how Konica Minolta's business solution will grow the customer's top- and bottom-line revenue and contribute to business-unit growth.When you present a BU leader with a proposal that's going to help him grow revenue, grow profits and achieve his strategic goals, you've suddenly propelled yourself out of the leverage pend category and into the magical strategic spend category. The Framework for Customer TypingOne primary differentiating factor among customers is the focus on transactions. Whereas some relations are mainly about closing and carrying out transactions, other go beyond mere transactions. The distinction between transaction-focused relationships and relationships that go beyond a transaction focus can be made both by your company with regard to its customers and by your customers with regard to you as their supplier. The following model reflects the four types of relationships that can exist between a supplier and a customer when looking at the relationship and combining both the supplier and the customer perspectives. Read more on the research on customer types in real world account management.
