Cracking the Impenetrable Account
Edition: February 2002 - Vol 10 Number 02
Author: Dave Kahle
Who doesn't have at least one or two absolutely impenetrable accounts? The ones where, despite everything you do, you just can't get the business? According to Dave Kahle, president of DaCo Corp., Grand Rapids, MI, everyone's got some. When you've got a large territory, you can live with a couple of them. But if your customer base is low, you can't.
Speaking at HIDA 2001, Kahle defined an impenetrable account as one ''that has for a long time consistently resisted your attempts to increase your business.'' Why would an account do that?
If you take the time to think strategically about it, said Kahle, you'll find that an account consistently closes its doors to you for one of a number of reasons, such as:
A difference in philosophy.
Deals that have been made over your head.
The ugly fact that the competition has simply outsold you.
In some cases, the simple fact is that ''who you are is not what the account wants,'' said Kahle. This isn't necessarily because of anything you have or have not done. Perhaps your company is the high-quality, high-cost choice, and the account's philosophy is to always buy from the lowest-cost vendor. Other accounts put everything out to bid, refusing to establish long-standing relationships with any supplier.
Sometimes an account simply doesn't like you. If that's the case, they'll always find a reason why not to buy from you, said Kahle. Other times, they may have a longstanding, significant relationship with your competitor, which can cause them to actually defend him or her against your encroachment. Kahle recalled how, when he was a rep for White & White, a distributor in Michigan, he learned that the materials manager at one impenetrable account was the brother-in-law of Kahle's competitor. ''There was nothing I could do except wait for a divorce in the family,'' he said. It never happened.
Customers have long memories, said Kahle. Your company may have messed up on something long before you came onto the scene, but the account may still hold it against you. On the other hand, the account may have a longstanding relationship with your competitor because years ago, that supplier did him or her a favor. There's almost nothing you can do or say to turn it around. It's difficult to compete against years of transactions and trust.
The Competition Outsells You
Maybe, just maybe, the competitor's sales rep is better than you. Maybe he or she has created the relationships, done a better job understanding their needs, or outserved you, said Kahle. It happens.
What to Do?
So, what's the rep to do with his or her impenetrable account? Walk away? Hardly, said Kahle. In fact, he recommended four ways a rep can make inroads with the most impenetrable accounts:
Go around the competition.
Appeal to become No. 2.
Entice the account.
Find a champion.
Make a straightforward appeal.
Look for an opening.
Do what the competition won't.
Skirt the Competition
Going around the competition with either products, personal relationships or departmental relationships is probably the most effective strategy, said Kahle.
Skirting the competition with products is a viable option for reps who work for distributors with broad product lines. ''I won't go head-to-head with a strong competitor in an impenetrable account,'' said Kahle. Doing so only threatens the competitor, in which case, the account will probably defend him. (Your goal, of course, is to ultimately become so tight with the account that they end up defending you against other challengers.) One strategy, then, is to sell the account something that the competitor cannot or does not sell. Then, when you have built a credible track record with the account, you might become a bit bolder and take on the competitor head-to-head.
Another way to go around your competitor is to build a relationship with someone in the account who doesn't particularly like him. And there's always one. If you can build such a relationship, you have the chance to be a star for that person.
Finally, try skirting your competitor by cultivating a relationship with a department that is not currently served by her. By building a track record and gaining the account's trust, you put yourself in a position to supplant the incumbent should an opportunity present itself.
Vie for No 2 Status
In some cases, an honest, straightforward appeal to the account to be its No. 2 supplier may give you the foot in the door you need, said Kahle. You may ask the account to agree to buy items from you that have been back-ordered by the incumbent. ''You're trying to create a relationship based on an honest analysis,'' said Kahle. ''And you're not threatening the existing relationship.''
Another way to crack an impenetrable account is to entice it with a low-risk but high-value offer. In such a case, the rep lays his or her cards on the table, saying something like this: ''Look, you're happy the way you're doing business, but we think we have some value to bring to you. You don't know us well, and we don't know you. But to overcome that, we'll do this.''
The offer must be something of high value, but something that will cost the customer something, however little. (''Anybody can take something for free,'' said Kahle. ''But if there's no risk, there's no relationship.'') One example of a high-value, low-risk offer: A company providing computer repair services offers a potential customer 75 percent off the next service call if he calls you instead of the well-entrenched competitor. The customer risks little or nothing, and you have a reason to be in the office. The only thing limiting you is your ability to think creatively as well as your employer's willingness to bear the cost of the enticement.
Find a Champion
You can always find someone in the account who doesn't like the incumbent, said Kahle, who recalled how a relationship he cultivated with a central supply supervisor led to the richest contract he ever signed.
The Straightforward Appeal
When all else fails, make a straightforward appeal for a piece of the impenetrable account's business, said Kahle. Ask the account what it would take to get more business, he suggested. At least half of them will tell you. (And most of the time, it's not about price.) More often than not, these exchanges with customers will present you with opportunities you never knew existed, because you never asked the question.
Persistence pays off. ''One of my managers once told me that sometime, somewhere, something will always change,'' said Kahle. ''Your job is to proactively maintain visibility and your presence in that account, and to be ready when that change occurs.'' Be prepared, it may not occur next week, next month or even next year. ''It's a long-term strategy,'' he said.
Look for an Opening
Everyone makes mistakes, even the most outstanding competitor, said Kahle. Your job is to turn that mistake into an opening.
Kahle recalled one hospital account he tried to penetrate back when he was a rep. He knew his company had the best deal on suction tubing around, but the materials manager insisted on defending the incumbent. Later, the incumbent back-ordered the account. Because Kahle had taken the time to cultivate a relationship with someone else there, he was on hand to step into the breach. ''Three years later, that materials manager was protecting me.''
Do What They Won't
Finally, do something that your competitor won't, can't or doesn't even know about, said Kahle. He recalled how, when strategizing how to crack a government account, he personally went to the bid opening to find out what his competitors had bid on the business. Armed with that information, he came back the next time the bid was up and came in lower than his competitors. Bid openings are public, and anyone can attend them, he said. But none of his competitors had thought to do so.
The bottom line, said Kahle, is to have a plan in mind before calling on your impenetrable accounts. Implement it, then reflect on it two months from now. Did it work? If not, why? And what's next? ''Impenetrable accounts have tremendous potential,'' said Kahle. ''They are worth the trouble.''