Getting a Square Deal

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Around Square D Co., a Palatine, Ill.-based manufacturer of electrical control products, Chris Curtis is known for his philosophical bent about business and, well, his loquaciousness on the subject.

The VP-marketing gets especially animated when discussing the marketing approach of Square D, a unit of Paris-based Schneider Electric, to "strategic accounts" -- high-profile, massive pieces of business from the likes of DaimlerChrysler and IBM Corp.

Mr. Curtis champions Square D's "relationship management process," or RMP. Essentially a customer relationship management system, RMP stresses creating one-to-one marketing situations in which Square D customers are provided with exactly the products and level of service they want.

The trick, of course, is finding exactly what the customer wants. For Mr. Curtis, this means focusing the sales process not on what the company has to sell, but on what the customer needs.

"It's a blurring of the line between what's a sales process and what's a marketing process," he says. "I like it that way. … The sales guy focuses more on the relationship itself, whereas in marketing, you focus on how I get my business to behave to deliver that value consistently."

While the system provides a framework, Mr. Curtis understands it is the sales staff who must put it into practice.

Scott Chakmak is Square D's director of strategic accounts-DaimlerChrysler. He spends his working days in DaimlerChrysler's Kenosha, Wis., plant, where a banner hangs with the Schneider Electric logo and a phone number where Mr. Chakmak can be reached. "No one should have to search to get a hold of us," he says.

With that sort of proximity to the customer, Square D's sales staff has become well acquainted with DaimlerChrysler's needs. For instance, Mr. Chakmak understood that Square D's team could ease the workload of Chrysler's engineers by helping with the design of a new engine assembly line, prior to Chrysler's acquisition by Daimler.

Mr. Chakmak suggested that his team could oversee the design of the electrical control system of each machine to ensure conformity. The consistency of the design reduced training time and made Chrysler's employees more versatile.

After more than two years, Chrysler finally agreed to Square D's proposal and put its supplier in charge of the project. Using the Internet to communicate with more than 80 other suppliers around the world who contributed to the project, Square D completed the project in 27 months, significantly shorter than the industry standard of 36 months, Mr. Chakmak says.

Since then, the company has overseen similar projects for various DaimlerChrysler plants around the world. "The first project took 2* years to sell," Mr. Chakmak recalls. "It took nine months to sell the next time. Then it was 30 days. Since then, it's basically been a handshake."

The RMP approach isn't used only with strategic accounts. Square D's field service engineers use it with every customer.

Behind the strategy

Ultimately RMP is about choices. If customers don't want or require value-added services, Square D simply sells them the products they need.

The RMP system is designed to "relieve the field sales engineers of jumping through hoops," according to internal Square D sales documents.

But with strategic accounts, such as IBM Corp., jumping through hoops can be worthwhile for Square D, which is now the sole supplier of power supply equipment to Big Blue.

A marquee account such as IBM can deliver profits, but it often can be even more helpful in bringing in smaller customers in the computer industry. Square D's strategic accounts, Mr. Curtis says, "actually deliver value strategically more than in profitability, but [the strategic account approach] is profitable."

Square D has 18 strategic accounts, four of which it added in 1999. Together, these accounts make up 25% of the company's revenue.

Square D must adhere to rigorous standards in handling these accounts. A case in point is IBM, to which Square D and its sister Schneider brand, Modicon, sell about $11 million in electrical control products annually under a three-year pact signed last year.

Under the terms of the pact, IBM receives volume discounting, standardization across plants, prompt shipping, available inventory for essential products, and responsive service. William Schaphorst, Square D's director of strategic accounts-IBM, is responsible for making sure his company is keeping its end of the bargain.

Mr. Schaphorst says handling the IBM account with the RMP system has altered his entire approach to salesmanship. Cut him and he bleeds Big Blue. "I'm in such an IBM world," he says. "Three years ago, I was an industrial salesperson beating my competition. Now I live and breathe IBM."

Mr. Curtis sums up Square D's RMP approach as an evolution of the total quality management movement of the 1980s. Instead of the manufacturing process, RMP puts Square D's relationship with its customers under the microscope. When implementing the RMP system, Mr. Curtis says in a professorial way, "We are basically going to put the customer relationship inside a quality modal."

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