During these bad economic times, the company I work for has seen many of its customers delaying or flat canceling orders. Our largest customer, however, is an exception to that rule. Although they are not buying quite as much as they were in the glory years, their business has been steady and been one of the few bright spots for us. And who do we owe thanks for delivering this customer to us? Our largest competitor, who was designed in on the previous generation tool and elected to make this customer a “house account”, and not have their local distributor (who we happen to share) participate.
It turns out that one of the best industrial automation salesman in North America happened to call on this account, and suffice to say, we was upset with said supplier for telling him to back off. He knew that the customer wasn’t happy with them, and offered to help them on the next generation project. He was given a not so polite, “we have it covered, your services are not required”. And that is where we came in.
As I mentioned in an early post, top salesman are a greedy bunch, and he wasn’t going to just walk away from a multi-million opportunity, so he brought my company in. Through the force of his will, we was able to get us added to the bid list. Since the customer already had 10 bidders, this was not an easy task. He further used all of his skills and customer contacts to guide us through the sales process. Because we came in so late, because we were orders of magnitude smaller than the other bidders, because this was a high visibility project at a very large customer, we could not make any mistakes and win. And win we did. I don’t want to sell short our efforts, we did a great job winning this project, but the fact is that without his help, we would not have even received a seat at the table. And if his other supplier had not cut him completely out of the loop, he wouldn’t have stuck his neck out so far for us.
Which brings we back to the original topic; house accounts. Most manufacturers have house accounts, and in some cases, they are necessary. I would say, however, that in the field of automation, house accounts are a mistake more often than not. House accounts make sense in large enterprise sales, where multiple teams of the supplier are interfacing with multiple teams of the customer on a daily basis. It is very rare that this happens in automation sales. At the beginning of a project, the engineering teams may be in constant contact, and when the project is mature, the purchasing and sales teams may be in contact, but that is about it. That does not constitute an enterprise sale. A customer buying 7 figures of product from you doesn’t constitute an enterprise sale either.
Automation comp0nent suppliers are just that; component suppliers. We may make a very important component, a component that would be very inconvenient or maybe even impossible to replace, but a component none the less. Our management teams are not typically working with our customers management teams on global strategy. As such, when you rely on visits every 3 months to gather customer intelligence and “build the relationship”, you run the risk of not being in quite the driver seat you thought when a new project comes along. Building a relationship is a constant process, and many time a top distributor salesman is in a better position to do this because of their proximity to the customer. The cost of sales is not zero, and if a supplier is not willing or able to commit the resources to stay in constant contact with an important customer, then you are putting that customer at risk by going it alone.
So you have to ask yourself, are your house accounts really an enterprise relationship or are they just a big customer who has negotiated a big discount? If it is the later, proceed at your own risk. The automation supply chain is littered with house accounts that are house accounts no more…