Key Account Management

47,696 views

Published on

Key Account Management

Published in: Business

Key Account Management

  1. 1. Key Account Management<br />Aristoteles Kabarganos,<br />Managing Partner<br />Ariston Group Performance Consulting<br />www.aristongroup.de<br />
  2. 2. What is Key Account Management?<br /><ul><li>Key account management is a strategic activity
  3. 3. KAM is fashionable but also difficult
  4. 4. KAM can develop beyond partnership to more synergies
  5. 5. There are mismatches between suppliers and customers
  6. 6. KAM does reduce costs and improve quality
  7. 7. A key account manager needs a comprehensive skill-set
  8. 8. KAM needs a customer-focused organisation</li></li></ul><li>Account Management is one part of Sales Excellence<br />Know your <br />markets<br />Developing and managing customers<br />Plan for <br />sales success<br />Finance <br />for sales<br />Sales<br />support<br />Customer<br /> Management<br />Management and team leadership for sales<br />Sales cycle<br />Creating<br /> opportunities<br />Effective <br />communications<br />
  9. 9. Why do companies implement KAM?<br /><ul><li>Win-loose
  10. 10. Loose-win
  11. 11. Win-win</li></ul>Goal: win-win-win<br />Integrated<br />Interdependent<br />Strategic intent of seller<br />Cooperative<br />Basic<br />Exploratory<br />Strategic intent of buyer<br />Firm<br />Partners<br />End-<br />Users<br />
  12. 12. The Buyers’ View of Sellers (78%)<br />Unreliable<br />Devious<br />Opinionated<br />Arrogant<br />Poor Listeners<br />Big Talkers<br />The enemy<br />Untrustworthy<br />Pushy<br />Aggressive<br />Manipulative<br />Only 18% saw the salesperson in positive terms<br />Source: Negotiation Resource International ‘Buyer Behaviors’ 2001<br />(2000 purchasers over 2 years)<br />
  13. 13. What is important to customers?<br />22%<br />39%<br />21%<br />18%<br />Source: The Chally Group 2006<br />
  14. 14. What do customers want?<br />Substantiated value<br />Total Solutions, not products and services<br />Outsource everything except their own core competencies<br />Source: The Chally Group 2006<br />
  15. 15. Some KAM skills from the customers point of view <br />59%<br />24%<br />21%<br />19%<br />10%<br />9%<br />6%<br />Source: The Chally Group 2006<br />
  16. 16. Creating closer relationships with supply and demand chain partners (1)<br />DIRECTORS<br />DIRECTORS<br />From<br />Marketing<br />Marketing<br />Operations<br />Operations<br />Information<br />Systems<br />Information<br />Systems<br />Sales<br />Purchasing<br />Supplier<br />Customer<br />Adopted from Professor Malcolm McDonald, Cranfield School of Management<br />
  17. 17. <ul><li> Transactional: emphasis on efficiency
  18. 18. Driven by price, success measured by price
  19. 19. Probably multi-sourcing
  20. 20. Easy to exit
  21. 21. Single point of contact
  22. 22. Business relationship only
  23. 23. Very little information sharing
  24. 24. Reactive rather than proactive
  25. 25. Probably low common interest
  26. 26. Organization suits selling company
  27. 27. Reward structure of KAMgrsparamount
  28. 28. Small chance of growing business
  29. 29. Can be stable state or trial stage</li></ul>From basic key account management <br />
  30. 30. Key-Account<br />Co-ordination<br />Supplier<br />Development<br />Supplier<br />Customer<br />Creating closer relationships with supply and demand chain partners (2)<br />Directors<br />selling company<br />Directors<br />buying company<br />To<br />Marketing<br />Marketing<br />Operations<br />Operations<br />Information<br />Systems<br />Information<br />Systems<br />Adopted from Professor Malcolm McDonald, Cranfield School of Management<br />
  31. 31. <ul><li> Both acknowledge importance to each other
  32. 32. Principal or sole supplier
  33. 33. Exit more difficult
  34. 34. Larger number of multi-functional contacts
  35. 35. Developing social relationships
  36. 36. High volume of dialogue
  37. 37. Streamlined processes
  38. 38. High level of information exchange, some sensitive
  39. 39. Better understanding of customer
  40. 40. Development of trust
  41. 41. Pro-active rather than reactive
  42. 42. Prepared to invest in relationship
  43. 43. Wider range of joint and innovative activity
  44. 44. Joint strategic planning, focus on the future
  45. 45. Opportunity to grow business</li></ul>To interdependent key account management <br />
  46. 46. And from traditional key account categorization<br />A<br />Top 15 (in volume/revenue generated)<br />B<br />Next 30<br />C<br />Next 55 <br />
  47. 47. to a more relevant key account categorization ….<br />Degree of<br />collaboration<br />KAM relationship stage<br />Needs of parties to<br />KAM relationship<br />High: collaborative<br />Realisation of fullest potential<br />of both organisations<br />Integrated<br />Confidence in relationship, stable<br />& highly evaluated by both sides<br />Interdependent<br />Reduction of risk,<br />ability to forecast<br />Cooperative<br />Operational, efficient<br />transactions<br />Basic<br />Low: transactional<br />
  48. 48. … and ultimately to a customer portfolio view<br />Supplier’s business strength with customer<br />High Low<br />High<br />Strategic:<br />invest<br />Future stars: selectively invest<br />Customer<br />attractiveness<br />Volume: <br />manage for cash<br />Bread & butter: maintain<br />Low<br />Key customer<br />
  49. 49. Key account strategies<br />Interdependent KAM<br />Integrated KAM<br />Exploratory KAM Investin tailoring product<br />Basic KAM Invest inbuilding relationships<br />Cooperative KAM Invest inimproving processes <br />Invest in Jointinformationsystems andfocus teams<br />High<br />Customer<br />Attractiveness<br />Invest indevolvedrelationships<br />Maintenance &Consistency<br />Basic KAM<br />Co-operative KAM<br />Vigilanceandmotivation<br />Low<br />Integrated KAM<br />Co-operative KAM<br />Stage of KAM relationship<br />Adapted from: “Key Account Management”, Cranfield University School of Management, 1996<br />
  50. 50. Developing strategic plans for strategic customers: the process<br />Understand the customer’s external environment<br />Understand the customer’s internal capabilities & resources<br />Work out the customer’s strategies and its critical success factors for us<br />Understand our internal capabilities & resources<br />Work out our objectives & strategies, plus key actions<br />Agree a process to produce a strategic customer plan <br />
  51. 51. The contents of a KAM strategic plan (T+3)<br />Purpose statement<br />Financial summary<br />KA overview<br />Client’s CSF analysis summary<br />Applications portfolio summary<br />Assumptions<br />Objectives and strategies<br />Budget<br />
  52. 52. An example of a key account plan<br />
  53. 53. Another example of a key account plan<br />

×