Given trade concentration increasing, and major customers undergoing fundamental change at all levels (think CEO rotation, possible sell-off of Sainsbury’s and Asda, for a start), all at a time of unprecedented financial pressure on supplier-retailer relationships, it is possible that the NAM role may be in danger of being sidelined…
Whilst strong functional experts have emerged within the supplier-customer relationship, their dialogue with the retailer is essentially one-on-one and ‘function-specific’. This can be a benefit when NAM-Buyer relationships break down, in that the overall business relationship can continue to operate on a functional basis. However, as these one-on-one links become stronger, the risk of distortion and imbalance increases, as do the chances of important issues becoming ‘orphans’ when things go wrong…
It is perhaps worth remembering that the NAM role has been designed to be multilevel and multifunctional, coordinating all aspects of the supplier-retailer relationship, managing a business unit subset of the supplier organisation, like a brand manager manages a brand. This business unit management role extends to ‘educating’ functional team members on the priorities and working parameters in dealing with the account. Because the NAM has no line authority over in-house experts, all such guidance has to be transmitted by persuasive means, a core skill in national account management.
Because of the increasing involvement of many different stakeholders, all operating to function-based agendae, there is a growing need for a single coordinating influencer, driving a sound customer strategy via high level interpersonal relationships, a pre-requisite of good account management. In addition, a functional expert takes a total company view of their functional output, such as logistics for all customers, finance for all customers, etc. However, the NAM is the only person who thinks of all functions as they relate to a single customer.
The role is further complicated by the fact that the NAM needs to understand the retail version of colleagues’ functional roles in order to liaise effectively with the customer and facilitate collaborative behaviour. For this reason, getting to know and fully understand in-house functional needs will make it easier to appreciate how that function translates into retail, another aid to optimising the relationship.
In other words, in the NAM role, both companies have the potential benefit of one brain totally dedicated to optimising the supplier-retailer relationship, 24/7…albeit with total responsibility, and little designated authority. Obviously, a NAM has to win sufficient status and authority via quality thinking, and strategy implementation, all by persuasion of the stakeholders.
When it comes to needs-based persuasion, it soon becomes obvious that the NAM is the only ‘seller’ in the mix, in that all other roles are ‘buyers’ of ideas. Therefore, the NAM has to understand the potential functional contribution to customer profitability and work back to the job needs of each colleague. This then provides a basis for helping the functional colleague to contribute optimally to the supplier-customer relationship. In other words, NAMs help their colleagues to meet their functional needs via the customer.
Given that the functional language-in-common is finance, and all corporate objectives are ultimately financial, it seems logical that the NAM role can be ‘rescued’ and restored to centre-stage by their ability to place all aspects of the supplier-retailer relationship in a financial context. This means evolving a customer strategy that is a sub-set of the overall supplier trade strategy in terms of Sales, Profit and ideally, Return on Capital Employed, all captured in the Account P&L.
In practice, the NAM has to understand the financial objectives of the retailer and supplier, and the financial drivers in each stakeholder job-function, at all levels, within the current market chaos… A NAM then needs to be able to calculate the cost of each element of the relationship, and be able to demonstrate its value in terms of positive impact on the customer’s P&L.
This insight, coupled with a grounding in needs-based persuasion, allows the NAM to optimise the contribution of each stakeholder to joint profitability, in effect becoming more valuable by being able to add value.
Negotiation then becomes a give and take process based upon a fair-share exchange of reciprocal value between supplier and retailer, all coordinated and even led by the NAM, ‘a pivotal leader of the cross-functional relationship with major customers…’
