Unlocking Key Accounts

We dare to dream. But so far Publishers Clearing House hasn't rung the doorbell to present Lisa with her millions, and Barney hasn't heard his number called for the PowerBall lotto … yet. Until we get our big poster-size checks, we'll be keeping our fingers crossed. As anyone who sells to key accounts knows, one of those big checks can change your whole outlook. Whether you're a manufacturer or a sales rep, key accounts are the Holy Grail of your business. They are the icing on the cake and the cherry on the sundae. They are also a lot of work, a lot of stress, and a lot of agony when they fall through.

We've heard from a number of reps who told us about key account meltdowns. They write huge orders and handle all the details of a key account, and then, without warning, the manufacturer takes the account "in-house" (a two-word phrase that's the equivalent of a four-letter word to reps). "They can't stand to see me get a decent commission, so they take it in-house and keep my money, even though I've done all the work," is the typical complaint.

In order to be fair, we decided to ask a few manufacturers about in-house accounts. And we heard a very different story. The manufacturers say that they ask a key account rep to handle the account, but their own regional sales manager or key account manager ends up making the appointment, going on the call, making the presentation, and doing the follow-up work. And then the rep gets a big commission check. They say, "Why should we pay them when we're doing all the work?"

Where's Judge Judy when you need her?

As is usually the case, there's probably truth to what both sides are saying. But the issue isn't who's right and who's wrong. The issue is managing expectations. As a rep principal, when you interview for a new line you ask, "Is XYZ (a huge key account in your territory) ours?" If the answer is yes, you might say "Great! We're in there all the time and have a good relationship." And the manufacturer might say, "OK, we'll look forward to seeing the results of your efforts." Very often, that's the end of the conversation. You move on to signing a contract, talking about show fees and samples, and finalizing the deal.

But if XYZ is such a big account, there should be more conversation about it, perhaps a separate meeting to discuss the expectations of both sides, and even a clause in the contract. If the manufacturer has a history with the account, it's their responsibility to tell the rep what buyer(s) they work with, what their design and selling process is like, and how involved they'll be in that process. If they haven't sold to the account, it's incumbent upon the rep to share their experience with the manufacturer. And there should be a buy-in option on both sides.

Here are questions for a rep to ask:

• Is there a representative of your company who wants to be a part of presentations?
• Is there someone in-house to act as liaison for us, to help fill out forms, distribute samples, etc.?
• What are your expectations of us, both in dollars and presentations?
• Who is our direct company contact for information on custom work, discounts, terms, etc.?

If reps know what's expected of them from the very beginning, the chances of disappointing the manufacturer are dramatically reduced.

One manufacturer we spoke with had experienced nothing but hassles with key accounts. Yet instead of pulling the accounts in-house, he tried something more proactive. He put together a form for the rep to fill out. The form asked for expected lead times, projections by product, terms, EDI information, and contact names and numbers. "Getting all of that information on the front end allowed us to have meaningful conversations about growth and strategy," he said. "Everyone knew what was happening, and it made a huge difference."

There are a few basic things that reps and manufacturers need to keep in mind when dealing with key accounts.

Advice to key account reps: Don't keep secrets. Secrets won't make you fireproof. Your relationship with a manufacturer is a partnership. Provide them with copies of all the forms you're filling out. Brainstorm with them on new product ideas. Bring them examples of items that are selling well or themes that are working for your clients, so that they can design merchandise with the client in mind. When manufacturers realize that you are partners, they too will be willing to go the extra mile.

Advice to manufacturers: Be very sure before you decide to bring a key account in-house. There's a lot more to it than saving a commission. Do you have a key account manager or regional sales managers who have the time to take on a big project? Can they drop everything to fill out a form, overnight a sample, or follow-up on problems? Is that the best use of their time? Did you budget for additional trips each year to visit the account?

A good key account rep is the best value a manufacturer has. A good rep has spent time building a relationship with the account. They know their methods, their assistants, their preferences, and their moods. They can drop off a sample, check on a purchase order, or ask a billing question face-to-face.

In the relationship between manufacturers and key account reps, negotiating and selling skills are essential. Acquiring that purchase order means working together to make it happen. Yes, it's a lot of work, but it's worth it — especially when you get that big poster-size check.