Key Accounts: Identification and Management

KEY ACCOUNTS
IDENTIFICATION AND MANAGEMENT
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Sales and account management

The differences
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Sales to account management

a shift from short-term sales to managing customer an understanding of the customers whole business focusing on profitability, as well as turnover
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What is Account Management

Account management refers not only to the process of selling (that is turning prospects into customers) but to the entire process of initiating and developing buyer seller relationships over time. The stress is on long term relationships, rather than one time opportunistic transactions.
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Sales to account management

acquiring new skills and utilizing specialists developing a long-term focus moving from individual account responsibility to team working working at different levels in the customer organization
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Sales to account Management

understanding and influencing the complete decision-making structure recognizing the importance of customer care and customer the need for complete business solutions
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Sales and account management

Manage Customer Relationships The traditional sales-team focus is on sales with a recognition of the importance of profit, but, in account management, the responsibility is much broader: Is the company delivering the highest standards of satisfaction?
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Sales and account Management

What can we do to build stronger relationships between our two organizations? How can we improve delivery or product quality in line with the needs of customers?
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New competencies
Understand the Customers Whole Business The sales force must also widen their understanding of the customers business. In a traditional sales environment, their focus would be on the purchasing department and on the immediate requirement for their products. Account management requires a much broader understanding. What is the customers business? What are its requirements?
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Strategic understanding
How is the company doing? What are th e companys success factors? How can we help them to improve their business? What other business opportunities are there apart from current product sales? Who needs to be influenced to realize these business opportunities? This level of business understanding requires a much greater appreciation of business than the basic sales techniques, and again the sales force should not feel they are wasting their time in acquiring this knowledge.
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Account Managers skills

Develop the Right Skills Account managers do not need to have an expert knowledge of all those areas; their role is to understand the implications and appoint appropriate specialists to provide the right balance of account skills. The account manager therefore needs a balance of personal and business skills, including: delegation; interpersonal; consulting; financial control and analysis; project management; people management; initiative and creativity; secondary skills to meet business and customer requirements, such as industry, competitive, and product Moving from Selling to Account Management knowledge
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Improve Account Development The objective of key account development is to achieve continued growth from targeted accounts, avoiding the stop/start process of tactical selling. This is a long-term process which requires continued effort at a number of different stages: presales contract negotiation .implementation .delivery .review. exploitation.
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Account Team
This provides a number of different objectives for the account team Ensure that the customer is presented with a coherent and professional image of your company as a business partner. Secure a long-term business relationship with the customer as the basis for growing business. Penetrate the customers organization and decision-making processes, creating new opportunities that can be exploited to accelerate account growth. Understand and document, on an ongoing basis, the customer organizations strategic business direction and organization.
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Look inside
Provide the companys senior management team with feedback on the long-term growth potential in the customers market sector and on the critical success factors for exploiting it. Ensure that the companys solutions are technically sound and based on a proper understanding of the customers requirements. Reinforce the customers perceptions of the benefits of the companys market focus. Ensure that the companys total resource is delivered in a way that satisfies customer requirements and supports the objectives of the account plan.
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Unlocking Key Accounts

Account selection culture and similar values share of the wallet we can get future importance how strong is(are) our competitor(s) here How does customer view us
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Unlocking key accounts

Account organization Ability to develop teams Seniority required Range of specialists needed Top Down support Internal communications Accountability Change Management
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Unlocking Key accounts

Value Management understand customer needs cultivate value not cost Keep refreshing value proposition in line with customers change of business
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Account Manager recruitment Must generate profits in the long term General Management skills Board level communication skills
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Mentoring Account Manager move from traditional need approach to big picture to encompass the customers future strategy. Seek ways to add value Adapt consultative sales approach
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Unlocking key Accounts

Account planning Sales plan for each account long term goals of the customer and how integrate. Understanding customers organization-mappingdecision making process, influencers, specific business needs that you can address with your products, services and information-build knowledge base on customer
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Plan execution Managing two sets of political scenarios, imperatives and cultures to bring together the customer and supplier organizations
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Monitoring and Measurement Set standards of performance monitoring the way customer is handled periodic review of customer status Sustaining the momentum
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Criteria for key Account

Purchases a significant volume of the category Has a good growth potential We hold a major share of the account or can aspire for a major share. Involves several people (perhaps several different functional areas) in the purchasing process
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Criteria for key Account.

Buys for a number of geographically dispersed units such as different locations of a store manufacturing units. Expects special attention and services such as logistical support, inventory management, price discounts, customized applications, on going information and reports about product usage Because of these characteristics requires a long term cooperative relationship between the buyer and seller as a means to effective profitable exchange
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Suppliers needs
Account selection criteria. Analyze human factors that affect selling and buying process in these situations. Understand the dynamics of the buyer seller relations over time. Diagnose and manage the formidable coordination requirements posed by major accounts
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Impact on sellers organization

Requires long term commitment of resources by supplier. Selling cycles are long. New and effective delivery systems. New formulation of terms and conditions. Development of product applications.
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Key accounts
Give large orders but they are price sensitive and should be capable of in house service and support. Product mix selling across the product line should be possible especially when selling companies cost of goods sold is somewhat equal across the product line. Price elasticity of the buyer may not vary. Systems sales are often more profitable than large order or single product
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Key Account Maintenance costs

Account profitability varies based on long term maintenance costs. It is important to maintain cumulative flow history of relationship. A stream of orders, capacity utilization and type of capacity utilized need to be projected. Changes may take place in account bargaining powers which could change the net price.
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Key Account Maintenance costs

Levels of service and support cost and the changes need to be taken into consideration
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Account Selection
Capacity utilization Price and margins
Account Selection
Order Patterns
Customer Maintenance Costs

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Understanding the roles of buy centre

Initiators-those who perceive the problem Gate keeper-product or problem experts Influencers-have indirect authority/power Deciders-those who can say yes or no Purchasers-those who finally sign agreement Users-those who actually use the product
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Mapping Key accounts - the 3ps

Power of each person in the buy centre Perception-of each person about relevant factors. Priorities: of each person in the buy centre Value stack
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Building relationship-stages
Awareness: each party recognizes the other as exchange partners. Exploration: Partners consider possible obligations, benefits, costs and all feasibility Expansion: continued increase in investments, inter-dependency, benefits, increase in risk taking, financial exposure
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Stagescontinued
Expansion. (continued) allocation of resources, trial purchases, may take place, possible special introductory terms, future expansion, product plans, still fragile relationships. Commitment: Implicit or explicit pledge of continuity, Long term multiyear contracts
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Stages. (continued)
Dissolution Many forces can strain the continuity of relationship between-like increased cost of transaction; decreased obstacles associated with altering sources of supply or account situations.
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Coordination issues
Key account managers and sales people remain boundary persons aligning the marketing/sales strategy of the selling organization with the procurement strategy of the buying organization. Coordination of various factors Geographical: different sales people selling the same product line call on different locations of an important account.
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Sales Coordination
Across product coordination: different sales people (perhaps different sales forces) sell different product lines call on the same major account, eg., Same vendor markets the capital equipment and supply items. Organizational: One or more senior Sales people responsible for marketing various vendors efforts at an assigned account
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KAM role/skill variations

EXPLORATORY KAM Role: Identify prospective customers Skills: technical knowledge, Scouting ability using data bases and data mining. Communication skills BASIC KAM Role: identify opportunities for account penetration. Skills: Product knowledge selling and negotiating skills.
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KAM roles/skills (continued)

COOPERTIVE KAM; Role: facilitate formation of net work. Skills: Management skills especially interpersonal skills. INTERDEPENDENT KAM: Role: supervise relationship interactions and collaborations. Skills: full range marketing, financial skills
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KAM role/skills (continued)

INTEGRATED KAM: Role: Coordinate focus teams. Skills: full range of business skills plus general management capabity.
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KEY ACCOUNTS

IDENTIFICATION AND MANAGEMENT

Sales and account management

Sales to account management

What is Account Management

Sales to account management

Sales to account Management

Sales and account management

Sales and account Management

Account Managers skills

Unlocking Key Accounts

Unlocking key accounts

Unlocking Key accounts

Unlocking key accounts

Unlocking Key Accounts

Unlocking key Accounts

Unlocking key accounts

Unlocking Key Accounts

Criteria for key Account

Criteria for key Account.

Impact on sellers organization

Key Account Maintenance costs

Key Account Maintenance costs

Customer Maintenance Costs

Understanding the roles of buy centre

Mapping Key accounts - the 3ps

KAM role/skill variations

KAM roles/skills (continued)

KAM role/skills (continued)

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