Key Account Management
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The document discusses key account management. It defines key accounts as strategically important customers identified by sellers. Key account management is the integrated process of managing these accounts profitably. The document outlines benefits of key account management for both sellers and customers. It discusses best practices like clearly identifying key account portfolios and having key account plans and managers. The document provides guidance on key aspects of key account management like portfolio analysis, categorization, criteria for defining key accounts, and developing key account strategies and plans.
Key Account Management
- 1. KEY ACCOUNT MANAGEMENT PRESENTATION BY STEVE SOMAN
- 3. DEFINITION OF KEY ACCOUNT MANAGEMENT KEY ACCOUNTS ARE CUSTOMERS IN A BUSINESS TO BUSINESS MARKET IDENTIFIED BY SELLING COMPANIES AS BEING OF STRATEGIC IMPORTANCE TO THEM ..KEY ACCOUNT MANAGEMENT IS AN INTEGRATED PROCESS FOR MANAGING THESE ACCOUNTS PROFITABLY...
- 4. BENEFITS OF KEY ACCOUNT MANAGEMENT TO THE SELLER INCREASED SHARE OF CUSTOMER SPEND FASTER GROWTH IN REVENUES FROM KEY CUSTOMERS COMPARE TO THAT OF NON-KEY CUSTOMERS FASTER DECLINE IN COSTS TO SERVE FOR KEY CUSTOMERS THAN FOR NON-KEY CUSTOMERS LEADING TO IMPROVEMENTS IN PROFIT MARGINS BONDING/IMPROVEMENTS IN RELATIONS WITH KEY CUSTOMERS
- 5. IMPROVEMENT IN SATISFACTION RATINGS WITH KEY CUSTOMERS LOYALTY STRENGTH INCREASED ADVOCACY MORE VALUE FROM CUSTOMISED SERVICES
- 6. BENEFITS TO KEY ACCOUNT/CUSTOMER CUSTOMISATION EXACT FULFILLMENT OF CUSTOMER NEEDS WITH DIFFERENTIATED PRODUCTS OR SERVICES CONSULTANCY COUNSELLING CUSTOMER ON ASPECTS LIKE TOTAL COST OF OWNERSHIP, SUPPLY CHAIN, MARKET OPPORTUNITIES ETC SMOOTH WORKING RELATIONS DEALING PROMPTLY ON COMPLEX RELATIONSHIP ISSUES LIKE SUPPLY CHAIN MANAGEMENT CONSISTENCY HARMONISATION OF PRODUCTS, PRICE, PROCESSES ACROSS MULTIPLE GEOGRAPHIES OR DIVISIONS CONTINUITY & TRUST LONG TERM RELATIONSHIP. SECURE FEELING ON THE PART OF THE CUSTOMER LEADING TO TRUST OPENNESS IN INFORMATION SHARING
- 8. BEST PRACTICE KEY ACCOUNT MANAGEMENT CLEARLY IDENTIFIED PORTFOLIO OF ACCOUNTS GOOD ESTIMATES OF CUSTOMER PROFITABILITY AND CUSTOMER LIFE TIME VALUE FOR KEY ACCOUNTS KEY ACCOUNT PLANS AND TRAINED, EMPOWERED KEY ACCOUNT MANAGERS PORTFOLIO MANAGEMENT OF KEY CUSTOMERS PORTFOLIO
- 9. KEY ACCOUNT PORTFOLIO ANALYSIS AND MANAGEMENT HOW TO SELECT AND MANAGE A PORTFOLIO OF CUSTOMERS
- 10. PORTFOLIO ANALYSIS IT IS SIMPLY A MEANS OF ASSESSING A NUMBER OF ACCOUNTS , FIRST ACCORDING TO THE POTENTIAL OF EACH IN TERMS OF ACHIEVING THE ORGANISATIONS OBJECTIVES AND SECOND ACCORDING TO THE ORGANISATIONS CAPABILITY FOR TAKING ADVANTAGE OF THE OPPORTUNITIES IDENTIFIED. IT USES SEVERAL INDICATORS IN MEASURING THE DIMENSIONS OF ACCOUNT ATTRACTIVENESS ON ONE HAND AND COMPANY CAPABILITIES (RELATIVE TO COMPETITION) ON THE OTHER.
- 11. KEY ACCOUNT PRELIMINARY CATEGORISATION Top 15 (in volume/revenue generated) Next 30 Next 55 A B C
- 12. USE GATEWAY CRITERIA TO DEFINE KEY ACCOUNT/ KEY ACCOUNT ATTRACTIVENESS TURNOVER PROFITABILITY POTENTIAL LIFE TIME VALUE GROWTH RATE STRATEGIC IMPORTANCE OTHERS INDUSTRY SPECIFIC
- 13. ALLOCATE WEIGHTS TO EACH OF THE ATTRACTIVENESS CRITERIA FACTORS WEIGHT TURNOVER 15 PROFITABILITY 40 POTENTIAL 30 OTHER 15
- 14. DEFINE THE PARAMETERS FOR SIZE, GROWTH, PROFIT POTENTIAL AND OTHER FACTORS KEY ATTRACTIVENES S FACTOR 10-7 6-4 3-0 X WEIGHT TURNOVER/VALUE >7 MIL 1-7 MIL <1 MIL 15 GROWTH/ POTENTIAL % >20% 5-20% <5% 30 PROFIT POTENTIAL% >25% 10-25% <10% 40 OTHER FACTORS GOOD MEDIUM POOR 15
- 15. DEFINE BUSINESS STRENGTH/POSITION THIS IS A MEASURE OF OUR COMPANYS ACTUAL STRENGTHS IN EACH KEY ACCOUNT. THE FOLLOWING CRITICAL SUCCESS FACTORS WILL USUALLY BE A COMBINATION OF AN ORGANISATIONS RELATIVE STRENGTHS VERSUS COMPETITORS' IN CONNECTION WITH CUSTOMER FACING NEEDS. THEY CAN BE OFTEN SUMMARISED AS PRODUCT REQUIREMENTS PRICE REQUIREMENTS SERVICE REQUIREMENTS PROMOTION REQUIREMENTS
- 16. SCORE CRITICAL SUCCESS FACTORS
- 17. PRODUCE THE PORTFOLIO ANALYSIS
- 18. OUTLINE THE OBJECTIVES AND STRATEGIES FOR EACH KEY ACCOUNT FOR THE NEXT 3 YEARS CATEGORY DESCRIPTION STRATEGIC CUSTOMERS THE RELATIONSHIP HAS DEVELOPED TO THE LEVEL OF PARTNERSHIP. CUSTOMER BUYS NOT ON PRICE BUT ON THE ADDED VALUE DERIVED FROM BEING IN PARTNERSHIP WITH THE SUPPLIER. RANGE OF CONTACTS IS VERY BROAD AND JOINT PLANS FOR THE FUTURE ARE IN PLACE STATUS CUSTOMERS VERY IMPORTANT CUSTOMERS (IN TERMS OF VALUE). PRICE IS LESS IMPORTANT IN THE CUSTOMERS CHOICE OF SUPPLIER. BOTH PARTIES HAVE SOME GOALS IN COMMON AND HAVE MADE SOME FORM OF COMMITMENT TO EACH OTHER. STAR CUSTOMERS PRICE IS STILL A MAJOR FACTOR IN THE DECISION TO BUY, BUT THE SECURITY OF SUPPLY AND SERVICE IS VERY IMPORTANT. STREAMLINE CUSTOMERS THESE CUSTOMERS USUALLY WANT A STANDARD PRODUCT. PRICE IS THE KEY FACTOR IN THEIR DECISION TO BUY. THE RELATIONSHIP IS HELPFUL AND PROFESSIONAL, BUT TRANSACTIONAL.
- 19. KEY ACCOUNT MANAGEMENT STRATEGY DEVELOPMENT
- 20. CONTENTS OF A KEY ACCOUNT PLAN CONTENTS DESCRIPTION RELATIONSHIP OVERVIEW/EXECUTIVE SUMMARY CURRENT PERFORMANCE ANALYSIS CURRENT INITIATIVES WITH KEY ACCOUNT FINANCIAL TARGETS, PLANNING ASSUMPTIONS KEY ACCOUNT OVERVIEW SECTOR ANALYSIS, COMPETETIVE SITUATIONS, MAJOR CHALLENGES, KEY ACCOUNTS SWOT ANALYSIS, IDENTIFY OPPORTUNITIES OBJECTIVES & STRATEGY SET THE QUANTITATIVE OBJECTIVES WITH TIMELINES AND PRIORITISE CUSTOMER ALIGNMENT CUSTOMERS CRITICAL SUCCESS FACTORS, SUPPLIER RELATIVE PERFORMANCE RELATIONSHIP MANAGEMENT CUSTOMERS DECISION MAKING UNIT, CONTACT MAPPING IMPLEMENTATION PLAN DETAILED TACTICS, BUDGET, RISKS AND CONTINGENCIES
- 21. Business Partnership Process 11 22 33 44 55 66 77 88 Market / segment selection criteria Defining and selecting target key accounts Industry driving forces analysis Clients annual report summary and financial analysis Clients internal value chain analysis Clients buying process and information needs analysis Our sales history with the client Competitive analysis Clients objectives analysis 99 For each key account Clients Basic CSF Analysis Process Our objectives, strategies and plan for T + 3
- 23. TEAM EFFORT
- 24. KEY ACCOUNT SELLING A SYSTEMATIC SET OF PROCESSES IN IDENTIFICATION & PROFILING OF KEY CUSTOMERS, DESIGN AND ADAPTATION OF INFORMATION BASED & VALUE ADDED SELLING STRATEGIES, PROFILING OWN MARKET POSITIONING FOR HIGH SUSTAINABILITY OF GROWTH IN SALES.
- 25. IDENTIFYING KEY CUSTOMERS SEGMENTATION MARKET SEGMENTATION IS THE GROUPING OF CUSTOMERS WITH SIMILAR BUYING NEEDS, ATTITUDES & BEHAVIOUR BENEFITS OF SEGMENTATION ENHANCED UNDERSTANDING OF MARKET DYNAMICS, COMPETITOR STRENGTHS & HENCE OPPORTUNITIES FOR COMPETITIVE ADVANTAGE GREATER UNDERSTANDING OF THE CUSTOMERS CRITICAL SUCCESS FACTORS
- 26. PROSPECTING FOR LARGE CUSTOMERS PLAN YOUR APPROACH. CONSIDER WHATS WORKING WELL WITH YOUR EXISTING KEY CUSTOMERS AND FACTOR THAT INTO THE MARKETING PLAN WHAT INDUSTRIES AND SECTORS WILL YOU FOCUS ON WHAT IS THE MINIMUM SIZE OF THE PROSPECT THAT YOU WILL TARGET HOW WILL YOU APPROACH THEM
- 27. PROSPECTING FOR LARGE CUSTOMERS CREATE A PROSPECT TEMPLATE STRATEGIC REQUIREMENT DEFINITION (COULD BE) INDUSTRY TRANSPORT SECTOR FREIGHT & LOGISTICS SIZE OF PROSPECT TOP 20 IN NZ OR PART OF GLOBAL GROUP LOCATION NZ/SI NUMBER OF VEHICLES 500+ PROFITABILITY $2 MILLION/ANNUM POTENTIAL NEEDS OF THE PROSPECT RELATED TO OUR SPECIALISATION
- 28. PROSPECTING FOR LARGE CUSTOMERS CREATE A CONTACT PLAN WHO WOULD WE BE IDEALLY LIKE TO TALK TO IN THE COMPANY WHO DO WE KNOW IN THE COMPANY WHO IN THE COMPANY MIGHT KNOW US CAN WE BE REFERRED TO THE PERSON WE WISH TO SPEAK TO IF WE DONT KNOW ANYONE, HOW WILL WE APPROACH THEM WHAT IS OUR KEY DIFFERENTIATION IN APPROACHING THIS INDUSTRY/SECTOR/COMPANY MAKE CONTACT DEVELOP A PURPOSE & BENEFIT STATEMENT
- 29. SALES CALL PLANNING CONDUCT PRE-CALL RESEARCH PRIMARY BUSINESS, MARKET SEGMENT, THEIR CUSTOMERS, INDUSTRY TRENDS, KEY STRATEGIC INITIATIVES, FINANCIAL STATUS DETERMINE YOUR POSITIONING HOW IS THE COMPANY HANDLING THINGS TODAY WITHOUT YOUR PRODUCT/SERVICE CHALLENGES THEY MAY BE FACING BECAUSE OF HOW THEY ARE CURRENTLY DOING THINGS WHAT GAPS MIGHT EXIST AS TO WHERE THEY ARE TODAY AND WHERE THEY WANT TO BE WHAT ARE THE POTENTIAL BUSINESS IMPLICATIONS DUE TO THE CHALLENGES, PROBLEMS IDENTIFIED IF THIS COMPANY USED US AS THE SUPPLIER, WHAT BUSINESS VALUE WOULD THEY REALISE ? WHAT DIFFERENCE COULD IT MAKE ? PLAN YOUR QUESTIONS DEFINE THE MEETING OUTCOME
- 30. THE FOUR LEVELS OF CUSTOMER SATISFACTION MEET CUSTOMER EXPECTATIONS EXCEED CUSTOMER EXPECTATIONS DELIGHT YOUR CUSTOMERS AMAZE YOUR CUSTOMERS
- 31. SUMMARY
- 33. COMING TOGETHER IS A BEGINNING, KEEPING TOGETHER IS PROGRESS, WORKING TOGETHER IS SUCCESS - HENRY FORD