KEY ACCOUNT MANAGEMENT STRATEGIES
KEY ACCOUNT MANAGEMENT STRATEGIES
[YOUR BUSINESS NAME]
Based on a market survey recently conducted on behalf of [YOUR BUSINESS NAME], it was assessed that its major accounts would seriously commit to an annual joint account plan, on which the business relationship between the client and [YOUR BUSINESS NAME] can be based.
In considering the headings in this document, it may be appropriate to highlight the single most important factor for the establishment of a major account planning
process, as assessed during the recently concluded market survey.
It was assessed that, in order to minimise the effect of severe price competition leading to the erosion of profitability, the direction of sales effort should be better positioned at the twenty percent of clients who are contributing eighty percent of revenue. An assumption is made that this same 80/20 rule applies to profit as well.
The principle behind changing a customer’s thought processes from being price orientated to value orientated is in simple terms, to change the customer into a client.
Based on a document from a book called “Consultative Selling” by Mack Hanan, the concept is promoted, that while a customer buys on price, a client buys on value. The client however, will then request an improved business relationship or partnership with the supplier. This has been referred to as “The Sustainable Client Relationship System”.
In order to assist the management team in their final formulation of key account management strategies, “The Sustainable Client Relationship System” is outlined for their evaluation, and should be the basis of their final strategy.
12 IMMUTABLE LAWS OF RELATIONSHIP BASED SELLING
1. “Understand my needs and issues”
Get things done – respond to my needs. Produce results fast because I have more needs.
2. “Communicate with me in simple terms”
Speak to me in value creation terms. Let me know you clearly understand the issues.
3. “Don’t surprise me/Level with me”
Tell me the truth. Criticise if you need to, but let me know what’s working as well.
4. “Work with me”
Become a part of my team. Show me you’re interested in what I’m doing. Ask questions.
5. “Give me the best you’ve got”
Give superior value. Your higher service makes your price extremely reasonable.
6. “Be 100% professional”
Be a real professional in everything you do.
7. “Keep me informed”
Continuously share some of your experience and expertise with my people and me.
8. “Lead and own the process”
Get out in front of my problems. Roll up your sleeves and get your hands dirty in my business. Compromise with me once in a while but don’t give in on what you know is vital.
9. “Worry for me”
Think hard about my problems. Let me know what you think even without being asked. Give me immediate access to you when I am worried – be available. Put my needs first – never mind anyone else.
10. “Be creative/Inspire me”
Apply yourself in a way that transcends normal boundaries. Offer me options. Show a strong desire to achieve our objectives. Don’t leave a single stone unturned in looking for solutions.
11. “Be faithful”
Keep our business confidential. Make your relationship with me personal and continuous – don’t pass me along to others.
12. “Treat me like a person, not just a client”
Treat me like an equal – deal with me one-to-one. Don’t talk down to me. Throw in a few “little extras” every now and then. Advise me on closely related matters even if you’re not being paid for them.
12 IMMUTABLE LAWS OF RELATIONSHIP BASED SELLING (cont.)
What “The 12 Immutable Laws of Relationship Based Selling” amounts to is an expression of a customer’s concern for an investment in a system, of the need for visibility of commitment, and of the dependency that must be placed on the seller’s expertise.
A consultant must be sensitive to the buyers needs to receive these rights, and also to demonstrate that they will diligently adhere to them.
In simple terms, what this leads to is the need for a system selling process. As far a [YOUR BUSINESS NAME] is concerned, this system is suggested in the format of a key account management plan.
To enable the management of [YOUR BUSINESS NAME] to use a catch phrase for this new format, the word ‘APACHE’ is suggested. It stand for –
A C C O U N T
P E N E T R A T I O N
C L I E N T
H I G H L E V E L S O F
E N T R Y
The following strategy on which key account management document can be formulated, has been designed with the concept of APACHE in mind.
Once all of the appropriate client information has been gathered, the account manager will effectively penetrate and control the decision-making process affecting the client’s dealings with [YOUR BUSINESS NAME].
It is respected that in many instances, this process has already been activated, and success has already been achieved by the [YOUR BUSINESS NAME] sales team. It is our belief however, that the formalising of this key account management plan will provide greater and more profitable sales.
KEY ACCOUNT MANAGEMENT – HOW, WHEN AND WHY
The objectives of any key account management strategy, must be to provide an improved partnership relationship between [YOUR BUSINESS NAME] and its key accounts.
This presentation has not tackled the format on which key accounts must be assessed; however, it is recommended that the management of [YOUR BUSINESS NAME] develop a simple checklist which should be based around the following criteria:
1. Dollar trading value.
2. Strategic importance regardless of trading value.
3. Opportunity for reduction of opposition activity.
4. Risk of market penetration by competitors.
It is our belief that the management of [YOUR BUSINESS NAME] will add to and develop this checklist which in itself, needs to be flexible and constantly reappraised as market conditions vary.
The object of this key account management document, is to suggest a simple format on which a personalised [YOUR BUSINESS NAME] key account management document and strategy can be developed.
GUIDELINES FOR KEY ACCOUNT MANAGEMENT PLANS
The key account management plan refers to a single client as part of an account manager’s portfolio, and must be developed to obtain the following objectives:
1. To provide background data about a major account, and where appropriate, highlighting business trends and issues that will allow the account manager to effectively penetrate and control the decision making process for [YOUR BUSINESS NAME].
2. To logically display, and if appropriate, document sales opportunities and competitive threats that allow for the greatest possible protection of
overall corporate revenue, and stimulate new product sales.
3. To establish strategic, but simple guidelines for future account managers to follow.
4. To provide basic account documentation which will guarantee the continuity of the handling of the account, and any other contacts the client may have with [YOUR BUSINESS NAME].
5. To be the basis for an annual submission to the customer of a business review document, which specifies the mutual understanding between [YOUR BUSINESS NAME] and the client, and in particular, reviews the past activity from both a client’s and [YOUR BUSINESS NAME]’s point of view. In addition, this submission will then project a new and improved understanding of a partnership plan between [YOUR BUSINESS NAME] and its client, for the next twelve months.
B. KEY ACCOUNT MANAGEMENT PLAN
Following is a list of basic parameters for your consideration and development, under the following sub headings:
B1. Objectives of the Key Account Management Plan:
This initial objective overview is to ensure that all appropriate information has been considered for the development of a key account management plan, and that specialist strategies have been developed and/or considered for the gaining of client-and industry-related information, on which this key account management plan will be formulated.
B2. Customer Profile:
It is too basic to point out that one needs to know the following information:
Who owns and runs the business
All it’s contact numbers (incl After Hrs), website, email, all social media.
The account number
In addition to the listed parameters, information relating to the personnel in the account, should be documented under the heading ‘Executive Summary’:
The name of the chief executive
Key decision influencers
The company accountant
Sales managers or representative (if appropriate)
Any other important contacts (if appropriate)
B3. Key Account Management Profile:
The account must be qualified under the following guidelines:
Industry/company’s position in the market
The business environment
The account’s competitors
Client philosophy and business objectives
Client operations and locations
Decision-making and purchasing
Trading and payment history with [YOUR BUSINESS NAME]
B4. Sales Opportunities:
The sales opportunities available to [YOUR BUSINESS NAME] should be assessed under the following headings:
1. The importance of the sale to the client
2. The importance of the sale to [YOUR BUSINESS NAME]
3. The anticipated value of the sale
This would then lead to, and become part of the objectives of the key account management plan.
B5. Competitive Activity
In the highly competitive environment that exists in the any industry, it may be important to qualify the potential risks of competitor position and/or activity within each account. A simple evaluation may be devised under the following headings:
1. Which companies do they presently deal with?
2. Which companies have they dealt with in the past?
3. What reasons have been assessed for the gaining or losing of this account by
B6. Sales Strategies and Action Plans:
The sales strategies for any key account management client must be designed to provide [YOUR BUSINESS NAME] and its client with a relationship edge. A simple guideline to be followed is the following:
1. Describe business opportunity
2. Qualify specific sales opportunity
3. Analyse how this can be achieved
4. Develop an action plan to achieve the desired result
B7. Sales Targets:
For any key account management program to be valuable, it must analyse all sales opportunities, and provide some target profile on which the success of the key account management plan and the account manager can be based.
The broad arenas on which this sales targeting process can be based, are the factors of formal product sales, and secondly, the area of improved client relationships on which future sales can be based.
A key account management plan correctly formulated will normally provide fair and realistic sales opportunities. It should be stressed that the responsibility of an account manager is to eventually develop the account, with a view to improving the quality of revenue provided to [YOUR BUSINESS NAME], with an appropriate defence strategy to protect his increased revenue once it is received.
It is also important to stress that the account manager’s responsibility is to regularly analyse sales targets, so as to maximise sales opportunities and adjust the annual sales targets, as projected at the onset of the key account management plan. As an initial basis for the development of sales targets, it is suggested that the present levels of client performance be used as a guide on which future account sales strategies will be based.
B8. Client Agreement:
Should [YOUR BUSINESS NAME] consider the possibility of using a client agreement document, the following parameters may be all that is required to gain client commitment:
1. Provide a short resume of [YOUR BUSINESS NAME]’s account manager, the support staff available from [YOUR BUSINESS NAME], and what their functions are in servicing the major account.
2. A brief overview of the existing relationship between [YOUR BUSINESS NAME] and its major account.
3. An overview of key industry trends and issues that are specific to [YOUR BUSINESS NAME]’s client business objectives, and this is stated from [YOUR BUSINESS NAME]’s point of view.
4. A list of [YOUR BUSINESS NAME]’s requirements of any major account, with regard to communication links, calling strategies, public relations gestures, etc.
5. An understanding of the partnership relationship between [YOUR BUSINESS NAME], and each major client, with reference to future sales opportunities, joint marketing practices, etc.
6. A schedule and date for the regular review of this relationship, which will consider [YOUR BUSINESS NAME] and its clients’ viewpoints.
C. MAJOR ACCOUNT MANAGEMENT TIMING
In certain instances, it may be opportune to consider the extension of the key account management plan to take in a two or three year horizon. If this position can be attained, it will enable [YOUR BUSINESS NAME] to lock in to its major accounts’ organisational plans, and thus build an impenetrable barrier for [YOUR BUSINESS NAME]’s opposition.
The section in this document that refers to Timing, should also consider the simple targeting process of not only achievement to target in terms of volume, but also in terms of timing.
This is of specific significance if the key account management plan has built into it, a pricing structure, related to volume purchase over a given timeframe. Without the significance of a realistic timeframe, the value in the sale will be eroded, and profitability of the account will be seriously questioned.