Strategic accounts represent a market of one — in and of themselves — with a wealth of opportunity far beyond what most account teams realize. But how can strategic sellers unlock this door, and step into a world of co-discovery with their most essential customers? Dave Irwin, Founder & CEO of Polaris I/O joins SAMA President & CEO Denise Freier. Together, they discuss how to unlock the hidden pipeline and become relevant in the market.
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Unlocking The Hidden Pipeline With Dave Irwin
DF: One of the most challenging parts of being a strong and strategic account manager is knowing your customer and knowing how to add value. This ranges from discovering all you can about their business to managing the account through the journey of a longtime relationship. I am so pleased to have an expert in this joining us. David Irwin, CEO of Polaris I/O, has a plethora of experience, tools, and processes to address this exact challenge. Welcome, Dave.
DI: Thank you.
DF: As we begin, can you tell us a bit about yourself and your journey into founding Polaris I/O?
DI: Thanks so much, Denise. I’m delighted to be here. It’s great to join you. My journey to Polaris is one that started a long time ago. Having worked in MarTech and AdTech businesses most of my career in a lot of different roles, the common thread is I’ve always been responsible for revenue growth. From that vantage point, I have been in charge of a lot of different revenue portfolios that always included key accounts. I became fascinated a long time ago with what I call this 80/20 rule or phenomenon of key accounts where in every place I’ve ever worked, a few large-scale clients drove the majority of revenue and profit. It was more extreme than that. A lot of times, it’s more of a 90/10 effect.
Even within that 10%, there’s a 90/10 effect. As I studied this phenomenon, I was always curious about the following things. How did these accounts get so big in the first place? What makes them different? Why can’t other accounts become this large under some systematic way of growing them? What is the reason behind the growth? What is this phenomenon going on? How does this happen? What I found out in examining this over a twenty-year period is that most people don’t know or have a simple answer to this. There’s some storied history but it was almost like an outcome that happened as a result of a series of events that wasn’t necessarily by design but in a lot of cases, it’s hard for people to explain why.
I experienced this myself in running teams. I’ve had enough time to have some real outlier teams. In one example, I had a single account team drive five times more growth on one account than an entire sales team drove on over 100 accounts. I realized by observing and watching what is it that makes this phenomenon happen. Why is it that an outlier account team can drive so much growth that way? I realized a lot of it had to do with this deep understanding of the client’s environment, their businesses, and the roles of those organizations. I don’t mean the account but the industry and the entire setting in which they operate.
It dawned on me that expecting all key account teams to be able to operate and perform like that automatically with having that expectation is not realistic and plausible. That’s what drove me to delve into, “How do I scale this performance? How do you make this phenomenon come to life across all the key account teams?” There’s one critical key observation that I hold true to the stats. I use a lot of stats to prove this but key accounts are markets in and of themselves. I call it the economy of key accounts but I’ll point out that the Global 2000 drives 50% of the world’s GDP.
Another interesting fact I find fascinating is that 591 companies in the US drive 70% of the economic output of this country out of 11 million businesses. There is huge growth inside these massive global organizations far beyond what most account teams realize given how many businesses they own, how global they are, and the amount of M&A they do. We’re using PowerPoint, Excel, and email as our tools to manage this growth. It’s a total mismatch. Manual research in our environment doesn’t cut it.
I started thinking about automating what I knew, having been in this job, and what can I do to make this easier and less cumbersome. That’s what led me to build Polaris, which is focused on automation and creating an environment that benefits key account managers and their teams. That is critical and even more acute, given our economic climate and digital and supply chain disruptions. Customer priorities are changing faster than account teams can keep up with them. We need to help instrument better execution capabilities. That has been my journey leading up to this point for a couple of decades.
DF: It’s so true what you said that looking at these key accounts is a market. We oftentimes call it a Market of One but you have to do all the things around that Market of One to make it happen. Yet, one of my perspectives from learning from our members is that companies don’t focus on knowing their customers well enough, discovery as we call it, and getting into what are those top priority requirements for that particular customer. There’s no defined repeatable process at least that we found out there. It requires a lot of hours to do it right. I would love to hear more about your experience here and some ways that teams can move through that process.
DI: Account management, sales, and marketing are conflated with each other. Sales and marketing have always been focused on a buyer journey of known demand. This is something I talk about a lot but it’s the highly instrumented area of a business that’s looking for intent to purchase and creating leads to acquiring new customers. Many people and teams are involved in this all to help sales develop sales-driven pipelines. This approach is carried over and applied to key account management, which has a fundamentally different buyer journey.
Coming back to the sales and marketing side, there’s a lot of talk about these repeat purchases or this known demand side of the business going online, digital, more routine, and smaller deal sizes. Everybody has got that problem on the one side but when it comes to key accounts, there is a fundamentally different buyer journey that I call a buyer journey of co-creation. This buyer journey is one where there’s a whole hidden pipeline of customer problems, initiatives, needs, strategies, and objectives that are out there. It is expressed constantly by these large global enterprises.
The problem is the way the companies are mostly instrumented coming from that buyer journey of known demand and sales-driven pipeline. It’s about products, product statements, features, and functions being pitched to customers. We know that doesn’t work. Even over the last few years, it’s held very consistent. In this research we have done and participated in, only 11% of sales conversations are considered valuable by executive buyers.The way companies are mostly instrumented today is really about products, product statements, features, and functions being pitched to customers. We all know it doesn’t work. Click To Tweet
When it comes to key account management and cross-selling, upselling, or expand-selling, commercial teams are able to embrace problem-solving with curiosity and empathy and investigating the key needs of these buyers. Also, understanding not just the requirements from a technical side within that particular solution but requirements in the context of the long-term and that company being able to have a solution that’s going to perform over time in the context of the industry challenges. Changes that affect them are also part of the requirements.
Co-creating the solutions with customers is key. I like to call this customer-driven pipeline an invisible pipeline because most companies that we work with can’t see it. They don’t have the tools to see it, therefore, they can’t take action against it. The customer-driven pipeline of problems and needs and mapping capabilities to solve and address those needs with the right value propositions is something that is a pathway forward. There are a lot of needs and problems out there.
In summary, working backward from the customer, understanding their needs, translating that into requirements you can help them address, lending and co-creating with them collaboratively, and doing this over and over again through an iterative approach where the team is constantly engaging and iterating with the customer works. I’ve seen it work. Clients respond extremely positively when they believe that a company with authenticity sincerely wants to address their problems with what they need. That’s how you build repeatable growth where you don’t want to deal with other vendors. They will come back to the well over and over again.
We have seen that a lot of times where the repeat purchases on large-scale key account growth opportunities are high. The close rates are very high when a company has a strong relationship established as a strategic partner and vendor to a key account. That’s a pathway forward that I would recommend. How do you enable that though? A lot of people embrace this and know this. We know that some teams are great at it and that those relationships get established but how do you make that repeatable systematically? What Polaris strives to do is help on the execution side of that.
DF: It makes sense but first of all, that is not a lot of relevant conversations that people are having. That is a challenge for us all. I love the thought and the term the invisible pipeline. I’m trying to figure out what that might be but with so much chaos and disruption going on, I have to believe this is a nearly impossible task. Our members are feeling overwhelmed, not being able to do all that is needed. What are some of the challenges you’re seeing out there around this?
DI: The current state is pretty remarkable in terms of how common it is across organizations that have four common and primary challenges. I’ll start with the first one, Information Overload. This isn’t so a new concept but this results from too many sources of information and too much information overall. When you’re dealing with a global key account and that’s who you’re servicing, think about the amount of financial information, investor presentations, SEC filings, conference calls, announcements, press releases, news, interviews, competitive news, events like mergers and acquisitions, industry news, and legislation and then imagine all of that across all the subsidiaries on a global basis.
The ability of humans to mine that information for opportunities, synthesize it, prioritize it by hand, and then coordinate plays against it in some coordinated way sounds pretty overwhelming. That is the information overload problem that exists. What we see is account teams are doing this manually. They’re looking up research online. They’re attending investor calls. They’re trying to find this information through Google searches, looking up reports, and reading magazines and news feeds but there is no automation around it whatsoever. That’s the first problem.
That leads to the second problem, which we talked about, which is Irrelevant Sales Conversation. If you don’t have the information that’s critical and that you need to know and the situational context of problems that people are dealing with, then it’s very difficult to be relevant. It’s almost a matter of luck of being at the right time at the right place because it’s a moving target. People’s situation in a business is changing. It leads to poor pipelines and irrelevant opportunities that are captured in the CRM but are something the customer never was connecting themselves to because things had changed.If you don't have the information that's critical that you need to know and the situational context of problems that people are dealing with, then it's very difficult to be relevant. Click To Tweet
Information overload and irrelevant sales conversations go together. If you think of the cost of irrelevancy, it’s high because there are a lot of meetings happening. If those aren’t relevant meetings and if only 10% of those meetings are relevant, there’s a huge cost associated with all of that time spent that’s not leading to real results and a real pipeline that can be mined. The next problem we see is Fragmentation.
Companies are extremely siloed. They have many people involved in these accounts from different departments. No one is taught or educated on how to be a team. I don’t think account teams have exposure to training about how to be a team in the first place. They’re assigned to a team and then you’re on a team.
Some teams have great chemistry and some teams may not have great chemistry but they all have to deal with the fragmentation of being members of different departments with different goals and objectives. That leads to a myriad of problems when it comes to the lack of centralized access to information. People are working with different facts. There are artifacts all over the place. They’re spread across people’s emails and hard drives. Fragmentation becomes a real issue. It’s reflected in most people’s situations. If a critical person leaves a key account, then he says, “Somebody has to go through thousands of emails looking for a common thread to different deals.” Why do they have to do that? It’s because there’s no centralized place where all the fragmentation has been resolved.
Finally, it’s being Digitally Disconnected. We live in a digital world from a consumer perspective. We all shop on Amazon. We all are able to interface digitally on devices yet our key account relationships are very much done through email. They’re managed through phone calls. I like to say Zoom is not a digital engagement strategy. It facilitates an online meeting but there needs to be a digital experience brought to key account teams that is more modernized, more contemporary, and in line with the experiences people have as consumers. Those four things, information overload, irrelevant sales conversations, fragmentation, and being digitally disconnected are four real challenges that companies need to address.
DF: You have convinced me that this is very hard. I agree these challenges exist. You have probably described life for many of our strategic account managers out there. We get it. It’s not easy. If a company decides to dig in and try to help its salespeople and account managers do this, how do they do it? What’s the payoff? What are the outcomes they might be able to expect to receive if they invest?
DI: If you can address these things, there’s a big payoff. I would like to talk about it in the context of first business results and then people results. From a business results perspective, I mentioned this invisible pipeline. It’s one big benefit of solving this problem and tapping into this customer-driven pipeline of continuously expressed needs, objectives, priorities, changes, new challenges, product launches, and new territories they’re going into.
These enterprises are so big. They have so many of these things going on. One massive immediate benefit is a big pipeline increase. This is very common but we see key accounts often have 4 or 5 prospect opportunities in the pipeline on top of the existing business that they have. There might be a handful of growth opportunities. This invisible pipeline or this customer-driven pipeline has hundreds of opportunities that are out there, spanning subsidiaries and global regions of all shapes and sizes.
The amount of pipeline is a big payoff because it’s one of those common things where it gives you more things to work on with the customer to drive growth. The second business value is the quality of the pipeline. When you have a pipeline that’s relevant to buyers’ needs, it’s automatically going to be more valuable in that sense but you also get into things like the deal size of these pipelines. We like to talk a lot about outcomes and desired outcomes of these key accounts but key accounts operate at many different levels of outcomes. If you’re at the most senior level, the C-Suite is looking for outcomes that are in the $1 billion impact area. They’re looking for entirely new business launches, products, and things that make massive differences in their overall business strategy.
Merger and acquisition decisions fall into this. As you move down in the waterfall throughout the organization, you have people trying to do business process optimization across regions. You’ve got different aggregate purchase outcomes that are trying to be achieved all the way down to point purchases but it is all over the board. When you understand the scale and scope of this bigger pipeline, you can begin to pick your spots with precision.
Do you want to drive bigger expansion? Are you trying to yield bigger deal sizes? Are you trying to get more penetrated into a particular area of the organization? These are things you can begin to see and control. The quality of the pipeline manifests itself in a lot of different ways because it’s not only bigger but there are different types and varieties of opportunities in there.
Another business benefit is what I call a moat strategy, which is once you are in as a strategic partner and you can easily work in a more frictionless way at least from the perspective of the key account, it’s easier for them to do business with you. They’re going to come back to you more frequently in a commercial exchange because it’s easier. That helps with retention. It prevents competitive influence. It is a very powerful mechanism and business benefit because it’s going to lock you into more areas, diversify the portfolio of revenue that you have, and keep competitors out because you’re easier to work with. They don’t have to educate another entity with regard to what they need to do.
All of this drives revenue more efficiently. If you add up all those things and you have a better-quality pipeline, there’s an old adage, “It’s ten times less expensive to keep a customer than acquire a new one.” It’s also ten times more likely to win a deal on an existing account than to have to win a deal on a new prospect. Those go hand in hand. That’s what leads to the fifth benefit. It’s more efficient. You’re going to be more efficient at having a team be very adept at mining these large-scale key accounts for growth where they know where to go, how the executive buyers make buying decisions, and how they do that at different outcome levels within the organization. They can rinse and repeat that constantly. That’s an efficient growth model.
DF: It sounds very much like a great benefit if a company could invest and help its SAMs. What about the SAMs themselves? Are they able to do this? Can they gain efficiencies? What benefits do they see?
DI: It’s another key part of the benefit. Gartner came out with a survey. This was for salespeople but salespeople are embedded in account teams where 90% say they’re burned out and 50% are looking to leave. To the extent that carries over into account teams and client success managers, it is a problem. Why is that? They’re feeling overwhelmed. There’s a ton of pressure. There have been layoffs. Nobody talks about the people that remain. They talk about the people that are left but what about the people that remain? They have to do twice as much. They haven’t been upgraded or modernized with new tools, help, or support. How is that going to resolve itself?
When you begin to solve this problem, you are going to have a pretty big impact on the people. I like to talk about a threefold productivity gain but these productivity gains go to the happiness of the people working. First of all, people are tapped out on time. If you can improve through automation the available time to do the job, which is to drive growth in concert with key account executives, that’s number one. The second is this knowledge issue. Being relevant is fun. When you’re not relevant, it’s not fun. When you are in sync with key accounts and the key account executives and have a good rhythm going with them, it’s very inspiring to the people involved.
The other is collaboration. These key account teams have to work together because they’re not just responsible for growth opportunities but they’re also responsible for delivery and managing expectations in the long-term. They have both sides of this equation going. When you can make collaboration easier, you can solve time, knowledge, and collaboration. You’re going to be driving more relevant sales conversations, team collaboration, and opportunity creation. That’s going to be inspiring to the people involved on the teams themselves.
They’re going to be more effective. They’re going to be sharing greater ideas. They’re going to be innovating. They’re going to be having a much better relationship with the key account executives that they work with and for because they’re going to be relevant to solving the issues that those companies have. The business benefits and the people benefits are significant and meaningful. Now is the time for companies to address that because we’re in a time when there’s so much change, disruption, anxiety, and burnout. There’s a huge pickup if you can tap into that invisible pipeline and the productivity gains and drive growth with a different mindset that is better connected to key account needs.
DF: I can see these compelling reasons that are out there for people to make this investment and to dive into how to improve the situation. Are you seeing companies beginning to pivot, change, and address some of these challenges?
DI: It has been interesting in the pre-COVID and post-COVID eras. Our timing at Polaris in bringing our capabilities to the market was post-COVID. There’s a stark distinction. When times are good, people keep doing the same thing over and over again no matter how inefficient it is because it works and they don’t want to make changes when things are working even though it may not be optimal. When I talk about that, I mean commercial efficiency. I’m talking about how much money people spend on sales and marketing to get revenue growth but post-COVID was disruptive.When times are good, people keep doing the same thing over and over and over again, no matter how inefficient it is, because it works, and they don't want to make changes. Click To Tweet
It kept going with the disruption in terms of forcing change. What we have seen is pipelines dry up on that go-to-market side and people starting to lean in on a couple of key things. We need to grow our existing accounts instead by 10%, 20%, 30%, or 40%. We need to focus on retention and ensuring that our key account relationships are stronger. We need to start shifting more of the responsibility for growth to our key account managers.
Historically, Gartner has done a lot of research in this area where there’s an expectation that key accounts are going to grow. We can throw more growth on them but there’s no change in the enabling capabilities to help the teams make that happen. Based on our whole discussion, you can see how complex it would be for our teams to be effective in the first place without modernized tools and capabilities that help them keep up with it all.
There’s a huge untapped well of new growth that is there. Companies are beginning to shift their strategies in assigning. We’re seeing assigning key accounts, bigger growth targets, and less reliance on this concept of acquiring new customers but how are you going to do it? How are you going to enable it? It’s this execution piece that is the key. We’re starting to have companies lean in and start to say, “How do I automate some of this stuff and make that happen? We’re ready to make some changes to drive growth in a different way.”
That’s what we’re seeing in ‘23 at the beginning of this. We hear comments that the growth assignments are starting to set in. You have the big kickoff. How are we going to get this done? There is a sense of high intensity about addressing this in the face of layoffs and reduced teams. It’s a double whammy. It’s a critical time. You don’t want these teams to turn over. You want to empower them to be successful. It’s what I would say to senior executives with large key account teams.
DF: It is that time of year when it’s all coming to play. You see the quotas. You do have some downsizing. It’s now all resting on those key account managers to figure out how they’re going to make it happen. You’ve summarized it well by saying, “You need to change the enabling technology to have some change happen. We’ve got to change something out there.” You’ve outlined that extremely well for us. There’s so much more we could address and we’re running out of time, but could you give some advice to our audiences here? How can they learn more about addressing these challenges or best practices and what that available technology might be?
DI: I appreciate that. On our website, PolarisIO.com, under Resources, we have a lot of information, white papers, and webinars around concepts we call go-to-customer but this is the concept of working backward from customers. We have a white paper on the invisible pipeline and how strategic account teams can be more efficient. We have a lot of different resources out there. I would encourage audiences to read those things, engage with us, and ask to meet with us about seeing some of the execution capabilities we can bring to modernize what teams are currently tasked with and trying to do and make it simpler and easier.
I would reiterate. Our platform and enabling capabilities are for the key account team people. It’s there to make their lives easier and to make it easier to execute, be relevant, and collaborate as a team. Those are the people that we work for. It’s the full account team. This isn’t for individual people on a team. The platform is to support the entire account team’s ability to execute well and do it consistently over time. That’s what I would say.
DF: Thank you so much, Dave, for sharing those insights with us. It has been a real pleasure speaking with you. If you have any questions at all, please feel free to reach out to us at the show or directly to Polaris. We hope that you will take advantage of some of these great insights that Dave shared. Thank you all for joining us. I hope you have a wonderful day.
DI: Thank you.
- Polaris I/O