This article is the first in a three-part series on managing and maximizing global accounts. Read the other two installments: “How DHL Built a Global Accounts Infrastructure”and “To Grow Global Accounts, Be an Innovation Machine.”
Sometimes, opportunity drops in your lap: your multinational customer wants to consolidate its business with you. Currently, you supply parts to the customer’s factories in Taiwan, Brazil, and Indonesia. You have separate contracts, prices, and delivery schedules for each. But your customer has asked for a single agreement that would span all three countries, and dozens of others in which it does business. Sounds great, doesn’t it?
Maybe — until you delve into the particulars. You’ll need to assign someone in your company to serve as a single point of contact. You’ll need to standardize your data and IT systems to meet reporting and accounting requirements for a multitude of countries. And you’ll need to get your own people on board, including product line managers whose P&L will be affected by the new arrangement.
As these kinds of dilemmas show, there’s a chasm between an international sales organization and a truly global one. Companies as large as Xerox and as small as CTC Analytics, a privately-owned Swiss maker of laboratory equipment, have struggled to hoist a global flag. Here, from a series of exclusive interviews with Chazen Global Insights, four firms — all participants in the Global Account Manager Certification program, cosponsored by Columbia Business School and the University of St. Gallen — offer wisdom on building global accounts organizations that work.
Choose the right accounts
For CTC, putting a global account structure in place was a pragmatic decision. The company makes high-end sample prep and automation equipment for gas and liquid chromatography, a process that tests chemical compounds. Typical uses include testing for purity and quality and identifying components in food, water, and pharmaceutical products. CTC’s clients are primarily instrument manufacturers that serve the life science, pharmaceutical, chemical, environmental, and food and flavor industries.
Several years ago, CTC realized that just five customers accounted for three-quarters of its revenue. “We realized we had to work much more closely with these global accounts,” says Thomas Läubli, the company’s global head of sales and marketing. “We decided to put together a support and sales structure that would enable us to offer training, support, and knowledge transfer to all our global accounts in important regions.”
So, three years ago, the firm committed manpower and money to the effort, and let its customers know that it had project development teams, including software engineers and R&D personnel, at their disposal. CTC also established local offices in Asia and the United States. The feedback from the global accounts was overwhelmingly positive, Läubli reports. “All of a sudden, they got much more attention,” he says. “They have a voice in our company.” These changes contributed significantly to the company’s double-digit growth in 2010. In fact, Läubli says, revenue from global customers increased twice as much as that from other channels.
Narrow your focus
On the other end of the size scale is Xerox, a $21.6 billion company with operations in 160 countries. The company launched its global accounts structure in 1988 and, since then, has reduced the number of accounts under its global umbrella from 100 to 25 to maintain a clear focus. Today, four criteria determine if a customer qualifies as a global account:
- The customer must have operations in more than two geographic regions, with a substantial part of its business outside its home market.
- Projected growth is expected to at least keep pace with its industry.
- The customer demonstrates an appetite for working with Xerox and an interest in Xerox’s offerings.
- The company’s culture, size, and scale suggest that there is potential for significant return on the incremental investment applied by Xerox.
The criteria work both ways. “We’re not going to be considered one of the client’s premier providers — which is our objective — unless we are adding value,” notes V. Dale Sedgwick, client managing director in global account operations. ”We make sure we know how the client measures what they do and how we can contribute to those objectives.”
In our next issue: how to structure your global accounts department