Key Account Management

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Key Account Management

• Rob Menko, RSM

2

• KEY ACCOUNT MANAGEMENT

How would you define a Key Account? What are the
objectives of a Key Account Strategy? How does a
Key Account Approach differ from a traditional
Sales Approach? What are the most important
issues inKey Account Management?
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• THE ROLE OF THE SALES ORGANISATION

If most of the orders which the company receives
are repeat orders from existing customers then
the role of the sales organisation is customer
development rather than traditional selling.
4

• STAGES OF CUSTOMER RELATIONSHIPS

Early
Many interfaces between the companies
conducted via KAM and KAC Focus is transactional
Key Account Manager (KAM)
Key Account Contact (KAC)
Adapted from Steven Perry
5

• STAGES OF CUSTOMER RELATIONSHIPS

Partnership
Supplier
Account

• Many interfaces between
• the two companies alongside
• KAM and KAC
• Focus is to identify
• opportunities
• Joint RD
• Sensitive information is
• shared

Key Account Manager (KAM)
Key Account Contact (KAC)
Adapted from Steven Perry
6

• STAGES OF CUSTOMER RELATIONSHIPS

Synergistic Key Account Management
Supplier
Account
Well established relationships independent of KAM
and KAC whose roles become more "orchestrating"
and facilitating Business processes
become integrated Multiple teams are formed
Key Account Manager (KAM)
Key Account Contact (KAC)
Adapted from Steven Perry
7

• Global Accounts
• Regional Accounts
• National Accounts

The principles are the same, The complexity is
different
8

• THE ACCOUNT PORTFOLIO MATRIX

The Competitive Position of Supplier
Strong Average
Weak
High Medium Low
Develop
Maintain selectively
Develop / Defend
Attractiveness of the Key Account to the Supplier
Defend / maintain
Maintain minimally
Develop
Defend / selectively
Maintain minimally
Withdraw

• Accounts targeted for key account management
  must be mutually beneficial for both the supplier
  and customer

Source Fiocca 1982
9

• DEVELOPMENT OF GLOBAL KEY ACCOUNT MANAGEMENT

Future Importance
Global Partners Key Global Accounts Key
Regional Accounts Key National
Accounts Development National Accounts Target
National Accounts
Number of Accounts
The principles are the same The complexity is
different
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• THE BEHAVIOURAL TRIANGLE OF PURCHASING

Supplier Relations
Critical Performance Factors
Value Chain Management
Suppliers as Partners
Strategic Relational Quantum Leap Commercial T
ransactional
Total cost of acquisition Purchasing Value
Preferred Suppliers
System costs Savings
Approved Suppliers
Quality, Price Delivery
Available Suppliers
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• What is a key Account?

• Is a consistent high revenue producer.
• Is offering opportunities to increase sales.
• Is looking for a loyal business partner/adviser
• Is a strategically important industry or market
  opinion leader.

12

• Why a Key Account is different

• Your competitors are constantly trying to win
  them from you.
• Multiple decision makers and many staff influence
  the buying decision.
• An anti-sponsor may exist in the key account
  -someone who may subtly try to sabotage your
  sales efforts or relationship.
• It is especially important to understand your Key
  Account'sbusiness.
• Strong relationships need to be developed across
  numerouslevels between your two companies.

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• THE KEY ACCOUNT MANAGER

The role of the Key Account Manager from your
company's perspective.

• Understands all aspects of the Key Account's
  business.
• Proactively develops more business with the
  customer
• Establishes strong relationships with the
  decision makersin the customer's organisation
• Builds a wide awareness of your firm's
  capabilities throughoutthe Key Account
• Handle the Key Account in a professional manner
  on a day-todaybasis
• Develops a true business partnership with the Key
  Account.

14

• THE KEY ACCOUNT MANAGER

The role of the Key Account manager
from the Key Account's perspective

• Be the main link into your company for all
  issues
• Understand its business, market needs and
  competitive environment
• Help sell them products/services that achieve
  their business objectives
• Add value to the business relationship with your
  firm, for example, acting as a consultant on
  issues not directly related to your main
  business
• Help exploit market opportunities and, when
  possible, identify new and exciting business
  challenges

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• THE KEY ACCOUNT MANAGER

AUTHORITY
Buying company contacts expect the KAM to be able
to get things done - "nothing less." He/she has
to be a decision maker. "It is infuriating when
the KAM has to go back to base." "We don't want a
postman who has to trot back every time we ask a
question." The KAM has to have enough status to
be able to achieve things for their customer
within their own organisation!
M. McDonald et al
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• THE KEY ACCOUNT MANAGER

Skills and Qualities
Key Skills
Key Qualities

• Planning
• Marketing
• Relationship building
• Problem solving
• Negotiating
• Opportunity creating
• Organisation
• Communication
• Presenting
• Selling

• Focused
• Diplomatic
• Tenacious
• Flexible
• Independent
• Team player
• Opportunity seeker

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• The Roles of the Consultative Sales Person

Strategic Orchestrator
Business Consultant
Long -term ally
Source Learning International
18

• The Role of the Consultative Sales Person

A Strategic Orchestrator is a Sales Person
who co-ordinates all of the information,
resources, and activities needed to support
customer before, during, and after the sale.
Strategic Orchestrator
Competencies

• Knowledge of their own company's structure
• Expertise in building and managing teams
• Ability to co-ordinate delivery and service
  totheir customers
• Efficiency
• Flexibility

Source Learning International
19

• The Roles of the Consultative Sales Person

Business Consultant A Sales Person who fosters
customer confidence and strengthens selling
relationships by demonstrating -General Business
Knowledge -A comprehensive understanding of the
customer's business challenges -An ability to
develop and help implement effective solutions
and recommendations
Business Consultant
Competencies

• Knowledge beyond products and services
• Communication Skills Beyond persuasion
• Attitude Beyond positive thinking

Source Learning International
20

• The Roles of the Consultative Sales Person

Long-term Ally A Sales Person who demonstrate
commitment- and is able to contribute to the
customer's short and long term success throughout
the entire Customer Relationship Process
Competencies

• Build interpersonal trust
• Deliver on promises
• Inspire respect for their companies

Long-term ally

• Create and sustain a positive image of the sales
  organisation
• Demonstrate concerns for customers' interests
• Identify ways to strengthen the quality of their
  business relationships
• Resolve issues openly and honestly
• Make the customer meet needs with the help of
  his/her organisation

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• THE KEY ACCOUNT AS A BUSINESS PARTNER

The Benefits

• Profit from a mutually beneficial business
  dialogue
• Lock out your competitors
• Be able to focus on long-term planning
• Secure a constant and reliable revenue stream.

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• KEY ACCOUNT DEVELOPMENT

Complex
SYNERGISTIC KAM
PARTNERSHIP KAM
Level of involvement with customers
MID KAM
EARLY KAM
Simple
Nature of customer relationship
PRE KAM
Transactional
Collaborative
M. McDonald et al
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• THE ROLE OF THE KEY ACCOUNT MANAGER

Pre KAM
Early KAM
Mid KAM
Partnership KAM
Synergistic KAM
Uncoupling KAM
KAM must establish high level contacts and fulfil
a consultancy role
Focus teams at all levels. KAM co-ordinates
Selling Company must match a KAM to their Key
Contact
KAM must manage others to deliver services to
the customer
KAM's personal and technical skills will be needed
KAM may manage exit plan
Buying Company will look for product knowledge
and knowledge of their business
KAM must establish integrity
KAM must be perceived to have authority
Key Account team assumes importance
Focus teams are self managing KAM co-ordinates
Change of KAM may retrieve the situation
M. McDonald et al
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• 6 STAGES IN KEY ACCOUNT DEVELOPMENT

Pre KAM
Early KAM
Mid KAM
Partnership KAM
Synergistic KAM
Uncoupling KAM
Product need established
Transactions commence
Selling Company now one of a few "preferred
suppliers"
Selling Company is now in partnership with
buying company
"Quasi integration" Selling and buying companies
together delivers value to the end customer
Relationship disintegrates or products fail to
keep up with market
Buying Company scrutinises price and other terms
KAM/Key Contact relationship strengthens
Operational staff get to know their opposite
numbers
Contacts at all levels
Focus teams at all interfaces between supplier
and customer
KAM's focus is to establish relationship
KAM working to increase volume of business
KAM working to establish distinctive advantage
KAM looks for opportunities for
process integration
KAM is co- ordinating large matrix team
M. McDonald et al
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• THE KEY ACCOUNT AS A BUSINESS PARTNER

The customer perception stairs.
What level are you at?
LEVEL 4
BUSINESS PARTNER
LEVEL 3
VALUE-ADDER
LEVEL 2
PRODUCT/SERVICE PROVIDER
LEVEL 1
COMMODITY BROKER
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• RELATIONSHIP MANAGEMENT

Increase your influence

• Know the messages you want to communicate.
• Find out who's who in the decision making
  process.
• Understand the "internal politics" in the
  customer's organisation.
• Find your way around the customer's company by
  drawing anorganisational map.
• Initiate mirror relationships (nutritionist
  example)
• "Network" in the account and so become familiar
  with the wholeorganisation.
• Utilise leverage opportunities whenever possible.
• Develop and implement a "contact plan."

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• RELATIONSHIP MAP

CUSTOMER
Quality Control
Senior Mgmt.
Outside Agency
R D
Marketing
Purchasing
Planning
Operation
XXXX
XX
XXX
Inside Sales
OUR COMPANY
X
X
Field Sales
X
XX
Technical Service
X
XX
X
X
X
X
Marketing
Distribution
XXX
X
Operation
Senior Mgmt.
X
X
XXX
XX
X
XXXX
twice per week
once per week
once per month
occasionally
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• RELATIONSHIP MANAGEMENT

Contact Plan

• Know who are the decision makers.
• Learn the "internal politics."
• Define your key messages.
• Develop an organisational map.
• Initiate mirror relationships.
• Identify and action your networking and
  leverageopportunities.

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• THE KEY ACCOUNT DEVELOPMENT PLAN

3 Steps to develop the plan
1. SET KEY ACCOUNT OBJECTIVES 2. DEVELOP
KEY ACCOUNT STRATEGIES AND TACTICS 3.
WRITE THE KEY ACCOUNT PLAN
What do you want to achieve and by when? How
are you going to achieve each objective? Put it
all together in an easy to follow format.
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Account planning

• Account plan marketing plan for one client
• Consequences
• More in-depth treatment of clients business and
  DMU

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• WHAT DO YOU NEED TO KNOW
• about your Key Account?

• Business environment
• Major policies and goals
• Broad strategic aims
• Competitive position
• Strengths and weaknesses
• The account's competitors and their likely moves
• Financial status
• Purchase from other suppliers

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Analysis results

• Last years outcome
• Last years plans

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Customers needs

• List / update customers needs
• Check source
• Their needs or your perception of their needs

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Customer satisfaction

• Look at the result of the customer satisfaction
  survey
• How does this relate to the expressed needs?
• How was your score on these needs?

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DMU analysis

• List persons inside and outside business
• Describe each person
• List specific dos and donts of each person
• Attribute roles to persons
• Attribute influence per person

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PSU analysis

• List persons
• List contacts with DMU persons
• List skills per person

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Action list

• Which member of the PSU
• will take what action
• when
• with what expected results

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Plan

• Follow the planAdapt if necessary, according to
  the above mentioned analysis
• Once a year or once a quarter(General overhaul
  or small maintenance)

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Communication

• Confidential? Yes
• Copy for each PSU member

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Building the plan

• Involve as many sources as possible
• PSU is minimum
• Involve the client
• Show analysis part to client

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• THE KEY ACCOUNT DEVELOPMENT PLAN

Writing the plan
Account Development Plans (ADPS)
A chieve measurable increase in business D evelop
long-term business relationships P rofit from
opportunities S trengthen communication with
customer F ocus efforts to help you and your
customer grow O rganise internal resources C
reate awareness of your products/services within
the account U nderstand customer's business
environment S olicit interest in your customer
among your senior management
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• KAM WORKLOAD

of objectives achieved
70
Profitability achievements
60
Sales achievements
50
40
30
Results of a study made in the US in 1996
by Sengupta et al.
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10
0
9 or fewer accounts
10 or more accounts
43

• KAM COMPENSATION

of objectives achieved
Results of a study made in the US in 1996
by Sengupta et al.
Customer-based Compensation
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• BUILDING AN EFFECTIVE KAM PROGRAMME

• Top Management Commitment
• A service culture
• Team work
• Broad involvement in planning - implementation
  -and follow-up systems
• A climate of open communication
• A compensation system that support the strategy
• Well defined objectives communicated
  internallyand externally
• Careful recruitment
• Give the necessary authority