Effective Strategic Account Management
Matthew Alleway
Strategic
Account
Management
Customer
Stakeholders
Company
Strategy...
Introduction: Strategic Account Management (SAM)
SAM is a strategic
approach
distinguishable
from account
management
Used ...
Effective Strategic Account Management Model
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Selecting an...
What is Strategic Account Management (SAM) ?
Effective
SAM
Effective
SAM
What is
SAM?
Making the
business
Case
Selecting a...
SAM is a management approach adopted by selling companies aimed at
building a portfolio of loyal strategic customers
By of...
What is Strategic Account Management (SAM) ?
SAM is not account management (many organisations frequently think they are
d...
Making the business case
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Selecting and
categorising
custo...
Reasons to adopt SAM
1 2 3 4 5 6 7 8
Risk management
Customer complexity – retention means
understand the customers busine...
Selecting and categorising customers
1 2 3 4 5 6 7 8
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Sele...
Selecting and categorising customers
The choice of strategic accounts is arguably one of the most important
Strategic cust...
Strategic account portfolio
1 2 3 4 5 6 7 8
Strategic customers:
The most innovative and
important projects
should be deve...
Stages of the relationship
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Selecting and
categorising
cus...
Stages of the relationship
Buying companySelling company
Directions
Finance
Operations
Sales&marketing
SAM
Key
Customer
Co...
Developing relationships
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Selecting and
categorising
custo...
Developing relationships
Most important attributes are trust and
integrity
The main task is developing effective
business ...
Developing relationships
Tribal
Customer
TribalResources
Matthew
Swindells
Kingsley
Manning
SarahAtkinson
WendyClark
Derek...
Alignment in the organisation
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Selecting and
categorising
...
Alignment in the organisation
Organisation Commitment
Relationships outside of the organisation depend on the quality of r...
Alignment in the organisation
1 2 3 4 5 6 7 8
12 Rev ision ‘The way w e do
things’
11 Full
integr ation
10 Becoming
key cu...
Alignment in the organisation
Knowledge management
Firms with the most effective SAM make information management at the
cu...
Planning for strategic accounts
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Selecting and
categorisin...
Planning for strategic accounts
1 2 3 4 5 6 7 8
Best practice companies adopt a collaborative approach with the customer,
...
Planning for strategic accounts
1 2 3 4 5 6 7 8
6. Implementation plan
Detailed tactics Budget Risks and contingencies
5. ...
Risks and failures
Effective
SAM
Effective
SAM
What is SAM
Making the
business
Case
Selecting and
categorising
customers
S...
Risks and failures
1. Relationships must be reciprocated and appropriate
Common mistake is to assume that the customer wan...
Risks and failures
3. Misreading customer loyalty
if the supplier links their future strategy to the success of its custom...
Benefits Strategic Account Management
1. Strategic Account Management -> Take account management to
next level
2. Customer...
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  1. 1. Effective Strategic Account Management Matthew Alleway Strategic Account Management Customer Stakeholders Company Strategy Internal Resources Customer Strategy
  2. 2. Introduction: Strategic Account Management (SAM) SAM is a strategic approach distinguishable from account management Used to ensure the long term development and retention of strategic customers. It provides a means to develop and nurture relationships with major customers consequently a growing number of companies have made SAM part of their core strategy for customer partnering
  3. 3. Effective Strategic Account Management Model Effective SAM Effective SAM What is SAM Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3
  4. 4. What is Strategic Account Management (SAM) ? Effective SAM Effective SAM What is SAM? Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3 1 2 3 4 5 6 7 8
  5. 5. 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) ?
  6. 6. 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) 1 2 3 4 5 6 7 8 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
  7. 7. Making the business case Effective SAM Effective SAM What is SAM Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3 1 2 3 4 5 6 7 8
  8. 8. Reasons to adopt SAM 1 2 3 4 5 6 7 8 Risk management Customer complexity – retention means understand the customers business and supply chain Competitors are doing it, the client expect it and request it in tenders Clients want a standard approach especially from complex suppliers Opportunities Ability to influence client lifetime value, especially through solutions More precise innovation through co- creation with clients Greater market understanding and adaptiveness Reduced costs and increased value through better resource allocation
  9. 9. Selecting and categorising customers 1 2 3 4 5 6 7 8 Effective SAM Effective SAM What is SAM Making the business Case Selecting & categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3
  10. 10. 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
  11. 11. Strategic account portfolio 1 2 3 4 5 6 7 8 Strategic customers: The most innovative and important projects should be developed with these customers -> strategic investment. Strategic customers: The most innovative and important projects should be developed with these customers -> strategic investment. Star customers: These are the strategic customer of the future and are an Investment for growth Streamline customers: Customers who negotiate aggressively and despite the significant level of business the profitability of the account needs to be carefully monitored -> management for cash. Status customers: These are the strategic customers of the past, the relationship with these customers is strong, however the potential for future growth is low -> proactive maintenance. Strategic customers Star customers Status customers Streamline customers High Low Keyaccount attractiveness Supplier’s relative business strength as seen by the customer Low High Key customer spend 7 6 3 1 9 10 11 5 4 2 8
  12. 12. Stages of the relationship Effective SAM Effective SAM What is SAM Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3 1 2 3 4 5 6 7 8
  13. 13. Stages of the relationship Buying companySelling company Directions Finance Operations Sales&marketing SAM Key Customer Contact Purchasing Operations Finance Directions Selling company Buying company Directors Directors Strategic Account Manager Finance Finance Key Customer Contact Service Service Operations Operations Marketing Sales Marketing Sales Simple, transactional relationship Goal Interdependent relationships 1 2 3 4 5 6 7 8 Selling Company Buying Company Buying CompanySelling Company
  14. 14. Developing relationships Effective SAM Effective SAM What is SAM Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3 1 2 3 4 5 6 7 8
  15. 15. Developing relationships Most important attributes are trust and integrity The main task is developing effective business relationships with senior customer decision makers and influencers – Per IBM the most important aspect The stronger the relationship, the less threats will apply – Per IBM key to their success during recession Relationship development can be achieved by mapping the people inside the customer who matter, and deciding with whom you want to have a relationship with 1 2 3 4 5 6 7 8 Senior management Middle management Operations transactions Xerox stated “It is vital to identify one’s friends and enemies, the decision- makers and influencers, and the customer’s priorities”.
  16. 16. Developing relationships Tribal Customer TribalResources Matthew Swindells Kingsley Manning SarahAtkinson WendyClark DerekFelton PhyllisShelton PhilCollins Elisabeth Buggins 0 0 Ian Cummings 0 0 Peter Spilsbury 0 0 3 Paul Taylor 4 Peter Blythin 3 2 Aamon Kelly 4 SteveAllan 4 5 Relationship Strength on scale 0 to 5 Relationship owner denoted by 1 2 3 4 5 6 7 8 Sponsor/ Champion Anti- Sponsor
  17. 17. Alignment in the organisation Effective SAM Effective SAM What is SAM Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3 1 2 3 4 5 6 7 8
  18. 18. 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
  19. 19. Alignment in the organisation 1 2 3 4 5 6 7 8 12 Rev ision ‘The way w e do things’ 11 Full integr ation 10 Becoming key custom er centric 9 Eval uati on 8 Gearing up 6 Review SAM introduction 7 Redefining 3 M aking the case for SAM 5 Roll out 2 Understa nding the scope 4 Capa bi lity bui lding 1 Aw areness High B INTRODUCING SAM C EM BEDDED SA M D OPT IM ISING SAM BEST- PRA CTICE SAM A SCOPING SAM Transitioning Change to SAM
  20. 20. 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
  21. 21. Planning for strategic accounts Effective SAM Effective SAM What is SAM Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3 1 2 3 4 5 6 7 8
  22. 22. Planning for strategic accounts 1 2 3 4 5 6 7 8 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
  23. 23. Planning for strategic accounts 1 2 3 4 5 6 7 8 6. Implementation plan Detailed tactics Budget Risks and contingencies 5. Relationship management Customers decision-making unit Contact mapping (who talks to whom, state of relationship) 4. Customer alignment Customers critical success factors (CSF) and supplier relative performance Strategies to manage the relationship 3. Objectives and strategy Indentify and prioritise the key opportunities with strategic account Its position on the customer portfolio matrix Top-level strategy 2. Strategic account overview Strategic accounts business environment (sector analysis, competitive situation, major challenges, strategic account SWOT analysis) 1. Relationship overviews/Executive summary Current performance analysis Current initiatives with the strategic account Financial targets Planning assumptions
  24. 24. Risks and failures Effective SAM Effective SAM What is SAM Making the business Case Selecting and categorising customers Stages of the relationship Developing relationships Alignment in the organisation Planning for strategic accounts Risks and failures 1 2 4 5 6 7 8 3 1 2 3 4 5 6 7 8
  25. 25. 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
  26. 26. 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
  27. 27. 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

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