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Layoffs, Divesting, Downsizing
Doesn’t Stop The Bleeding In A Downturn
Chapman Group Helps Companies Survive and Thrive
By Focusing on Effectively Managing and
Servicing Accounts
When business takes a hit, most
companies try to stop the bleeding by making
short-term, narrowly focused fixes—downsizing,
layoffs, divestiture, etc.
Dennis J. Chapman believes these
responses, if taken alone, will cause the
companies long-term damage. Chapman is president
and founder of The Chapman Group, a sales and
marketing improvement consulting firm based in
Columbia, MD that serves Fortune 500 and
mid-tier companies.
“It’s a self-fulfilling death
spiral,” Chapman explains. “The more companies
cut, the more they strip themselves of the
resources they need to rebuild. That leaves them
with little opportunity to grow once the economy
begins its inevitable upswing. Their market
share is diluted and their long-term competitive
position and performance is damaged. Ultimately,
as a weaker competitor, they have to cut again,
and then again as sales and profits dwindle,
continuing their downward spiral.”
This situation begs the question,
“Now what?” What other options are there for
companies who’s internal resources are tasked
with achieving higher profits and more sales
while operating at their bare minimum?
Sometimes Businesses Have To Lay
Off Clients, Too
Perhaps the answer is in more
cuts… to your client base. Knowing how to adjust
or refocus sales and account service processes
can mean the difference between profit and loss.
Laying off employees may provide a short term
salve that satisfies Wall Street and
shareholders, but Chapman says laying off
business accounts that drain a company, and
properly servicing and managing those that
remain—effective account relationship servicing
(ARS)—is the path toward future success.
“Some accounts don’t deserve or
want all the attention they get, especially
those that are commodity purchasers – price is
their only consideration,” explains Chapman. “We
call those ‘buyers’. They are very easy to deal
with because they are willing to settle for the
lowest form of service in order to get their
price. Next come the ‘customers’. These are by
far the most expensive types of accounts to
have. They are the ones who want it all: lots of
hand-holding, beck-and-call customer service,
and the absolute lowest price. These are the
accounts that drain a company’s resources for
very little return. The most profitable type of
account is the ‘client’ account – the ones that
expect and are willing to pay for exceptional
service and time from your company. Profit
dollars lie in each account segment if your ARS
model is properly defined and executed.”
Not All Clients are Created
Equal—So They Should Not Be Serviced Equally
Knowing how to turn the customer
into a client or a buyer can make a significant
impact on a company’s bottom line. Recalls Tom
Zaiser, Director of Corporate Accounts for North
America at Hercules Chemical, “We treated
everyone like gold, although many were clearly
not gold, nor did they want to be.” Tom’s
company used The Chapman Group to help them
figure out what types of accounts they had, and
how best to service each type.
“Much too often, businesses are
busy servicing all their accounts equally and
not realizing that their profitability is
shifting dramatically,” Chapman says. “There’s
no need to devote the same amount of resources
to each account in order to keep that account
happy. Each responds differently. Some may
require the red carpet treatment and be willing
to pay for it, requiring a full customer support
team to respond to all their needs. The Internet
and an informative website may suffice for
others.”
Chapman says this method has
worked well for every client that’s implemented
his account servicing model program.
Accounts Should Have a Say in
Whether They Want to Deal With People or
Electrons
As the Internet and voice mail
have taken hold, more and more companies have
“depersonalized” sales and customer service.
While electronic sales and customer service has
greatly improved efficiency, Chapman believes
there now exists an opportunity for accounts to
specify how they would like to be treated—and
for companies that recognize their preferences
to build the appropriate servicing model and
strengthen their profitability plan.
“Right now, most companies make
decisions on how to treat business accounts/
consumers without consulting the accounts,”
Chapman says. “As with first class airfare,
accounts may be willing to pay premiums to
receive more personalized attention and account
support.”
One of the first steps taken
after The Chapman Group came on board as a
consultant at Hercules Chemical was to improve
the way that critical information was shared
between all those serving a client. Hercules
formed cross-functional teams with
representatives from sales, marketing, R&D, and
production. Clients also participated. Corporate
account managers were appointed to head up the
teams, each of which was customized to identify
needs and develop synergies for a specific
client.
“Every company is important to
us,” says Zaiser. “We just treat them
differently now. We use client segmentation to
confirm our selling model and set up solutions.
It allows us to better deliver our products and
technical representation, to avoid
over-servicing and inappropriate pricing. And
the companies are happier with this arrangement
because it is a more realistic and workable
alignment of our mutual strategies.”
Says Chapman, “For the last 100
years, business has focused on selling its goods
and services. For the next 100 years, business
may reorient its focus toward how to
appropriately service its accounts. Those in the
forefront of this trend will have a tremendous
advantage.”
About The Chapman Group and
Dennis J. Chapman
The Chapman Group is a sales and
marketing performance improvement consulting
firm headquartered in Columbia MD. Since 1988,
The Chapman Group has assisted clients of all
sizes across a broad spectrum of industries to
become more efficient, more effective and more
profitable.
Dennis J. Chapman, founder and
president of The Chapman Group has over 20 years
of executive experience in sales, marketing and
business management. Clients of The Chapman
Group include many global Fortune 500 companies
as well as a diverse portfolio of mid-tier
accounts.
The Chapman Group works closely
with their clients in the areas of major account
management, sales process, methodologies and
tools, reviewing and creating compensation
plans, “go to market” plans, market research,
and performance improvement strategies. The
Chapman Group is widely known for its Major
Account Management program, SMARTS™, which
builds and utilizes cross-functional teams to
manage diverse major accounts.
Before establishing The Chapman Group in 1988,
Chapman’s career included sales and management
positions with Xerox, ROLM/IBM and as Vice
President of Sales and Marketing in the
high-tech reseller industry. Chapman is a
graduate of the University of Massachusetts
School of Business, and serves as a panelist in
the Johns Hopkins MBA – Capstone program. He
speaks on sales and sales management processes
to MBA candidates at Loyola College in
Baltimore, MD, and to major corporations across
the country. He has written on the topic of
strategic account management for many years, has
written articles for industry publications, and
speaks nationally to more than 50 sales teams a
year.
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