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Management Strategies: The Rise of the Account Team
November 27, 2007
By Eric Peters
Ten years ago, there were fewer than 100 co-located supplier account teams in Wal-Mart's home town of Bentonville, Ark. Three years ago, the number was 300. Today, nearly 1,200 suppliers have co-located account teams in the Bentonville area.
What has caused the supplier community to take thousands of people out of the corporate office and relocate them to northwest Arkansas, in addition to other super-store retailing hubs such as Minneapolis, Cincinnati, Atlanta and Charlotte? What is driving this fundamental change in the way we think about selling and servicing the retail community? Three simple words—increased sales opportunities.
For many manufacturers, co-located account teams actually started out with a simple mandate: Get physically close to Wal-Mart to catch any mistakes before they occur. Wal-Mart is known as a demanding retailer that requires efficiency from its suppliers. In doing so, suppliers found that technology alone wasn't enough, so the placement of key staff close to the retailer was added to meet the challenge. Thus the account team phenomenon was born. These account teams could provide the data suppliers needed for Wal-Mart. More importantly, the ability of the account teams to be on site gave the suppliers a much better chance of making their case to the retailer.
Over time, suppliers realized that account teams could be used to do more, including drive sales. By providing top-notch service, suppliers could increase volume and SKU count into the retailer. Today the account team responsibilities have expanded to include improving efficiency of sales and promotions in order to lift sales.
For example, by providing access to retail data, retailers have expected more fact-based discussions with their suppliers. This not only encompasses how to generate net new sales, but also how they can eliminate the conditions that lead to lost sales. The latter includes excess out of stock, wrong pricing, poor forecasting on sales, poorly executed promotions or new product introductions, and a host of other reasons why the consumer did not buy the product. All are avoidable events that, if solved, can provide a direct lift to sales.
So with this new service model gaining traction, it's a good time to examine some of the best practices that can make the account team model successful.
• First, the right people must be found for the account team jobs … and then retained. Turnover is high, experience is low and many of these people see this position as a stepping stone to a more significant opportunity at the corporate office or for greater job responsibility at a competitor's office down the street. In Bentonville, account team members can change jobs easily without changing locations. Suppliers need to create standardized business processes to adjust to the high turnover. Establish education and training programs to accommodate for the lack of experience, and concentrate on the people side of the equation.
• Second, suppliers need to provide account teams with the right analytical tools to help them be successful. Corporate information systems were not built to work on the edge of the enterprise. Retailers are sharing more data than ever before with the expectation that suppliers are using the information in a constructive way to help grow the bottom line.
• Finally, retailers hear about problems every day in the store; they don't want to hear more from their suppliers. Retailers want to hear that a supplier has identified a specific problem that is solvable, that they understand what the root cause of the problem is, that they can show the financial impact of the problem, and that they can make a solid recommendation on how to fix the problem. Retailers want the specifics on stores, SKUs and distribution centers so they can take immediate action. Using the right analytical tools will make sense out of the large amounts of data, making it real—and most importantly, actionable.
Co-located retail account teams are only going to continue to grow at a rapid pace, so be sure to arm them with the tools and processes that lead to success.
Eric Peters is the CEO of TrueDemand Software, based in Los Gatos, Calif.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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