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Strategic Account Management Presentation
 

Strategic Account Management Presentation

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How to effectively develop and retain Strategic customers using Strategic Account Management

How to effectively develop and retain Strategic customers using Strategic Account Management

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  • any chance of the presentation rather than PDF?
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  • Very helpful and logical approach
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  • Matthew has done a good job of pulling together other people's ideas and images but he really should give credit to them:
    Slide 1 is a screenshot of my homepage at www.market2win.com
    Slides 11, 13 and 19 are all copied from the work of Professor Malcolm McDonald (e.g. 'Key Account Management, The Definitive Guide' by Woodburn and McDonald)
    I suspect other slides are copied from other work he has come across.
    I strongly urge him to distinguish between other people's work and his own before they (or their legal representatives) say he is infringing their copyright.
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  • very good presentation
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  • good put clear diagrams
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    Strategic Account Management Presentation Strategic Account Management Presentation Presentation Transcript

    • Effective Strategic Account Management Matthew Alleway Customer Stakeholders Strategic Customer Company Account Strategy Strategy Management Internal Resources
    • Introduction: Strategic Account Management (SAM) consequently a Used to ensure SAM is a strategic It provides a growing number of the long term approach means to develop companies have development and distinguishable and nurture made SAM part of retention of from account relationships with their core strategy strategic management major customers for customer customers. partnering
    • Effective Strategic Account Management Model 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the 5 relationship organisation Developing relationships
    • What is Strategic Account Management (SAM) ? 1 What is SAM? 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • What is Strategic Account Management (SAM) ? SAM is a management approach adopted by selling companies aimed at building a portfolio of loyal strategic customers By offering them on a long term basis, a service/product offering tailored for their specific needs it is a progression towards a form of ‘partnership’ or alliance with major customers characterised by joint decision making and problem solving, integrated business processes and collaborative working across buyer- seller boundaries, described as a process of ‘relational development’. 1 2 3 4 5 6 7 8
    • What is Strategic Account Management (SAM) ? SAM is not account management (many organisations frequently think they are doing SAM when it is in fact account management) Account management Strategic account management Mostly managed as business as usual Managed for growth or change Coordinated overview of account Holistic, helicopter, longer term view Opportunity-focused understanding Deep understanding of customers business One year plan Three to five year complete company-owned business plans (not just a personal plan or sales and marketing plan) No investment or very little Likely to require investment in line with strategy Works within normal organisation Flexible, cross boundary sharing Requires account manager Requires strategic account/business manager 1 2 3 4 5 6 7 8
    • Making the business case 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • Reasons to adopt SAM Opportunities Risk management Ability to influence client lifetime value, Customer complexity – retention means especially through solutions understand the customers business and supply chain More precise innovation through co- creation with clients Competitors are doing it, the client expect it and request it in tenders Greater market understanding and adaptiveness Clients want a standard approach especially from complex suppliers Reduced costs and increased value through better resource allocation 1 2 3 4 5 6 7 8
    • Selecting and categorising customers 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting & strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • Selecting and categorising customers The choice of strategic accounts is arguably one of the most important Strategic customers must be aligned to an organisations strategic vision Selection criteria should indentify the customer’s attractiveness in terms of its potential for the organisation Also necessary to have a good process for deselecting strategic customers Optimum number of strategic accounts is 20-30 1 2 3 4 5 6 7 8
    • Strategic account portfolio Supplier’s relative business strength as seen by the customer High Low Star customers: Strategic customers: These are the The most innovative and strategic customer of important projects High the future and are an 1 should be developed Investment for 2 5 with these customers -> growth strategic investment. Strategic 4 Star customers customers 3 attractiveness Key account Status customers: These Streamline are the strategic 6 customers: customers of the past, the Customers who relationship with these 9 negotiate customers is strong, aggressively and Status Streamline 11 however the potential for 10 despite the significant 7 customers customers future growth is low -> level of business the proactive maintenance. profitability of the 8 account needs to be carefully monitored -> Low management for cash. Key customer spend 1 2 3 4 5 6 7 8
    • Stages of the relationship 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • Stages of the relationship Goal Simple, transactional relationship Interdependent relationships Selling company Selling Company Buying company Buying Company Selling Company Selling company Buying company Buying Company Directors Directors Finance Finance Sales &ma rketing Op erations Di rections Purchasing Op erations Service Service Di rections Strategic Fi nance Key Fi nance Key SAM Customer Account Customer Contact Manager Operations Operations Contact Marketing Marketing Sales Sales 1 2 3 4 5 6 7 8
    • Developing relationships 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • Developing relationships Most important attributes are trust and integrity Senior management The main task is developing effective business relationships with senior customer Middle management decision makers and influencers – Per IBM the most important aspect The stronger the relationship, the less Operations transactions threats will apply – Per IBM key to their success during recession Relationship development can be achieved by mapping the people inside the customer Xerox stated “It is vital to who matter, and deciding with whom you identify one’s friends and want to have a relationship with enemies, the decision- makers and influencers, and the customer’s priorities”. 1 2 3 4 5 6 7 8
    • Developing relationships Tribal Tribal Resources Customer Sa r ah At ki ns o n Ph y l lis Sh e l ton We n d y Cl ar k De r ek Fe l ton Ph i l Co l lins Sw i nd e l ls Ki ng s l ey Ma n n i ng Ma t the w Anti- Sponsor 0 0 Elisabeth Buggins 0 0 Ian Cummings 0 0 3 Peter Spilsbury 4 Paul Taylor 3 2 Peter Blythin Sponsor/ Champion 4 Aamon Kelly 4 5 Steve Allan Relationship Strength on scale 0 to 5 Relationship owner denoted by 1 2 3 4 5 6 7 8
    • Alignment in the organisation 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • Alignment in the organisation Organisation Commitment Relationships outside of the organisation depend on the quality of relationships within it Many of the benefits result from crossing boundaries, whether they are internal or external in the customer organisation Role of the strategic account manager Strategic account manager entails the role of ‘orchestrating’ the firm’s resources Transition to SAM Use metrics to measure the success of the SAM program. SAM is a marathon and not a sprint and firms should plan their SAM implementation around the three important areas of change activity: 1. strategy and planning, 2. organisation and culture, 3. process. 1 2 3 4 5 6 7 8
    • Alignment in the organisation 1 2 R ev isio n ‘Th e way w e d o H igh thin gs ’ 1 1 Fu ll in tegr atio n 1 0 B eco m in g key cu s tom er BEST - cen tric PRA C TIC E SAM 9 Eval uati on Transitioning 8 Ge arin g u p D Change to O PT IM I SIN G 6 R evie w SAM SAM SAM in tro du ctio n 7 R ed efin ing 3 M akin g th e cas e 5 R oll ou t fo r SAM 4 C apa bi lity C 2 U nd e rsta nd in g EM BED D ED b ui ldin g SA M th e sco pe 1 Aw aren e ss B A I N TRO D U C IN G SCOPING SAM SAM 1 2 3 4 5 6 7 8
    • Alignment in the organisation Knowledge management Firms with the most effective SAM make information management at the customer level a core competence Moving to a knowledge management approach has benefits for both the company and the client. For the company, client knowledge is retained and this is where an IT solution for account management is required. For the client they get the extra value of deeper knowledge from the supplier by mixing with like minded experts. 1 2 3 4 5 6 7 8
    • Planning for strategic accounts 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • Planning for strategic accounts Best practice companies adopt a collaborative approach with the customer, developing long term plans ‘for’, and together with, their strategic accounts IBM, ‘3’ Compass all suggested “developing an effective joint account plan with the customer is critical to ensuring relationship lock-in, uncovering new business development opportunities and driving rapid implementation 3M found that that short, sharp account business plans that “live” are best Strategic marketing planning should in turn relate to the corporate strategic plan Organisations that invest resources in detailed analysis of the needs and processes of their strategic accounts perform much better in building long term profitable relationships The underpinnings of it all is really having a deep understanding of the customer, not just the power politics, but what their marketplace is and where it is going, so that you can genuinely add value 1 2 3 4 5 6 7 8
    • Planning for strategic accounts 1. Relationship overviews/Executive summary Current initiatives with the Current performance analysis Financial targets Planning assumptions strategic account 2. Strategic account overview Strategic accounts business environment (sector analysis, competitive situation, major challenges, strategic account SWOT analysis) 3. Objectives and strategy Indentify and prioritise the key Its position on the customer portfolio Top-level strategy opportunities with strategic account matrix 4. Customer alignment Customers critical success factors (CSF) and supplier relative Strategies to manage the relationship performance 5. Relationship management Customers decision-making unit Contact mapping (who talks to whom, state of relationship) 6. Implementation plan Detailed tactics Budget Risks and contingencies 1 2 3 4 5 6 7 8
    • Risks and failures 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
    • Risks and failures 1. Relationships must be reciprocated and appropriate Common mistake is to assume that the customer want to have close, partnered relationships with their suppliers Many companies do not do business on this basis at all; instead their purchasing professionals reduce all supply decisions down to transactions based on trading off quality with price, and flexing market power to obtain the best result. 2. Large customers are not always the best customers Assumption that the biggest revenue earners are the most profitable is false, and that great care must therefore be taken to before committing substantial resources to large companies who demand great service at lower cost. Research has found that often the most profitable customers are often just below those that generate the largest revenue. Important to stay close to strategic customers but reaching out to other customer groups to reduce dependency on a few, and being locked into long term low performance with unattractive customers. 1 2 3 4 5 6 7 8
    • Risks and failures 3. Misreading customer loyalty if the supplier links their future strategy to the success of its customer, it creates a strong dependency and consequently a risk on the customers future success or failure. This is with the added risk of a customer switching to another supplier, which can often be part of the of the customers strategy. Therefore it is important not to be over reliant on one customer and avoid the critical error of believing that customer is a loyal partner. 1 2 3 4 5 6 7 8
    • Benefits Strategic Account Management 1. Strategic Account Management -> Take account management to next level 2. Customers -> Service for life Build long term strategic relationships with customers Retention of strategic customers - more cost effective to retain customers Spot new opportunities and generate new business Increased consultancy provides the hook for increased downstream activities 3. Internal Integration / Consolidation Break down internal boundaries and reduce silos Use as part of a Company standard to manage consultancy client relationships with major customers Effectively manage and focus resources aligned to Company strategy