Notes from SAMA | Creating Supplier Relevancy – Quantitative Economic Value Analysis
While attending the Strategic Account Management Association (SAMA) Annual Conference in San Diego one of the more important, yet challenging tasks for suppliers remains gaining relevancy at senior levels within their client organizations. One of the perceived reasons for this challenge appears to be that the client’s spend with a specific supplier is a small percentage of the overall client-spend required for the “go-to-market” solution. While this small percentage may be valid, the real conversational metric is the supplier’s economic impact on the total go-to-market solution, not just that small percentage. This is often best understood as the ROI on the “strategic investment” with a supplier; not the spend percent with a strategic supplier.
This change in supplier positioning – in terms of quantitative economic value propositioning rather than spend can be the gateway to creating more relevancy in the “C-suite”. The one key method for supporting supplier relevancy into the conversation between the strategic account and the strategic supplier is setting in motion a ROI methodology within a ROI calculating tool aligned to a specific solution.
The most significant transition to make is to focus on the economic impact – not costs or spend-percentage. There are at least three critical factors to consider when making this transition:
- Take a holistic approach of economic impact analysis of the supplier’s solution for the client
- Factor cost reduction – costs avoidance – revenue improvement
- Collaboration and validation within the economic value propositioning process with the client
- Use documented, validated and acceptable facts and numbers
- Apply the skill set and behavior to support the tools required for making this transition
- Execute accurate training in use of simple tools to document the Economic Value Proposition
Relevancy can be attained by highlighting factual economic impact – this may well be the next horizon of transparent collaboration between strategic account and strategic supplier.
Dennis Chapman, Sr.