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Characteristics of the process

Characteristics of the process. Selection of Strategic accounts Process & Resource allocation Competence Advanced Research. Role of the Strategic Account Manager. Traditional Key Account Selling. Role. Issues. Sales person Product seller Interface Relationship? Team player?

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Characteristics of the process

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  1. Characteristics of the process • Selection of Strategic accounts • Process & Resource allocation • Competence • Advanced Research

  2. Role of the Strategic Account Manager Traditional Key Account Selling Role Issues • Sales person • Product seller • Interface • Relationship? • Team player? • Administration • Co-ordinator • Culture • Management • Support • Communication • Systems/Process • Turf wars • Authority • workload/focus • Credibility AM Supplier Customer

  3. Selling Strategic Account ManagerCompetences Importance Ranking 1 = Most Important 10 = Less Important Source: A. Millman & K. Wilson, 2000

  4. Analyst Strategist Coordinator Politician Strategic Account Manager:Competence Profile • POLITICAL • ENTREPRENEUR: • Influence power • Take opportunities The strategic account manager must have the capability to solve problems for the customer and realize entrepreneurial opportunities thru the coordination and application of personal, team and organizational competences, without having the full control over all resources. Source: D-P Gosselin, 2002

  5. Impact of the context on Competences H Key Account Management Strategic Account Management Levels of Organisational complexity Key Account Selling L L P: Political E: Entrepreneurial H Degree of organisational Interdependence and Integration Source: SAMA, K. Wilson, 2000

  6. Characteristics of the process • Selection of Strategic accounts • Process & Resource allocation • Competence • Advanced Research

  7. Market Performance inStrategic Account Management Preliminary Research on Strategic Account Management at Ghent University, Department of Management and Organization (FEB) suggests a high probability that: • The market performance (*) of a supplier with a strategic customer is related to the PLC of the customer. This implies a process of dynamic allocation of resources: different relational behaviours at different times and the willingness to invest in specific and time related customers solutions using all available company competences. • The market performance of a supplier is higher with strategic selected customers if the supplier adjust his offer and performance according to the PLC of the customer’s Decision Units. • Market performance with strategic customers is higher if an explicit and recognized fit exists between the strategies of both the supplier and the customer. Source: D.P. Gosselin, 2000 (*) Growth in % Customer Market Share and % of Company Portfolio sold to the Account

  8. Case The Telecom world

  9. When did it all started ? …

  10. Strong growth • Fast evolution: • Services • Customer requirements • Technology • Regulation Telecom Market • Change in client/ • supplier • relationships • Aggressive • competition Four concurrent trendsshape(d) the Telecom Market ?Today

  11. Main Market Trends - Customer View 2004 Market Drivers Deregulation Internet Boom Demand for Broadband Content Need for differentiated Offer Bundled Services 3G launch Market Inhibitors Infrastructure Legacy Financing shortage Cost of Licenses Critical Size 2000

  12. Customers: before liberalisation

  13. Customers: (soon) after liberalisation

  14. A few trends ... There are now: • more and more (potential) customers in a more competitive environment. • more and more (potential) customers operating on a truly global scale • more and more (potential) Customers who are not tied anymore by national or regional boundaries • And … more and more financial difficulties …

  15. Just an example of leveraging global branding ... Vodafone now sponsor of Manchester United! 6 M fans in the UK 30 M fans in the world ! and … + 100 M Customers !

  16. Changing customer environment One Country One Customer (PTT)

  17. Today: 1 countryMultiple Customers

  18. former Matrix Focus: Product - Geographical Selling products within a country Areas Country Focus Product Focus Business Divisions

  19. Selling products within a country Areas Country Focus Customer Focus Product Focus Solution Focus Business Divisions Customer Refocus : Key Account Management Offering solutions to customers Key Account Management project management

  20. Key Account Management • Dedicated teams assigned to major accounts: • Tier 1 accounts > 100 M Euro/year • Tier 2 accounts > 10 M Euro/year • Tier 3 accounts = Major opportunity, Key account plan existing • Prime interface with customer • Prime focus on customer satisfaction • Represents all of Alcatel in front of customer

  21. Tools

  22. The Key Account Plan • Approval Document • Sales & Order Plan 20xx + 20xy • Customer Perspective & own Positioning

  23. Approval Document • Approval • Sales & Order Plan • Action & Development Plan • Actions and Issues Orders & Sales 20xx • Unbudgeted Opportunities for 20xx • Actions & Issues Orders & Sales 20xy • Unbudgeted Opportunities for 20xy • Customer Satisfaction • Account Team

  24. Orders & Sales Plan • For 20xx and 20xy and … • For each Business Division/Product Line: • Customer Spend • Budget: • Orders/Sales • Own share • YTD: • Orders/Sales (in EUR) • Orders/Sales (in %)

  25. Customer Perspective & Positioning • Customer Perspective • Shareholder structure and business lines • Financial Key Data • Portfolio Analysis (BCG) • Investment Trends • “Customer” Strategy • Customer SWOT • Own Positioning • Own Mission and Main Objectives • Strategy and Tactics • Own SWOT • Competitors Positioning • Investment Volume / Own Share • Main Opportunities • Objectives & strategy per product line • Relationship compared to competitors • Customer / KAM organization map

  26. 20xx Sales in EUR “Customer" Portfolio analysis (BCG) 20% example ? ? High 10% Market Growth Rate Low Trend 0% High Low 10 1.0 0,1 Relative Market share (competitive position) exchange rate: B.C.G. = Boston Consulting Group

  27. “Customer" Financial Key Data example E s t i m a t e Sources: Annual report, ..

  28. “Customer”Investment Trends • Reasons for change: ……………..…………….. example 1)

  29. “Customer”Strategy • Mission / Objectives • Customer business priorities • Long term development strategies • Existing versus future lines of business • Reaction to changing environment

  30. “Customer" Customer SWOT Weaknesses (internal) - Burden of high number of employees - Amount of debts restricting investments - Time-to-market (6 months too late) - etc. Strengths (internal) - Excellent network (bandwidth + coverage) - Experienced staff with up-to-date technical know how - International strategic alliances (good access to the most promising markets) + good corporate management fit - etc.. example Opportunities (external) - Threats (external) - Price decline ->shrinking margins, uncertain business planning/pricing policy - Profitability ? - Substitution of.... -

  31. “Customer“ Own company Mission and Main Objectives • Own Mission • To become ... • Market share & sales goal • Get 10% share of the accessible investments of Account in the next 24 months • = 100 Millions EUR / year • Relationship goal • Improve the business relationship from vendor/credible source to solution provider level within the next 24 months • Customer satisfaction goal • Measure customer index and improve the index by more than 30% over the next 3 years example

  32. “Customer" Own company Strategy and Tactics • Own company overall strategy to reach the objectives • in the customer’s home market: • international (when applicable): • Tactics example Sources: Annual report, ..

  33. “Customer" Own company SWOT Weaknesses (internal) Strengths (internal) example See examples in „Customer SWOT“ Opportunities (external) Threats (external)

  34. “Customer”Competitior’s positioning example

  35. “Customer”Investment Volume / Own Share M EURO example Total Invest:xxx Own share : x % Total Invest:xxx Own share : x % Total Invest:xxx Own share : x % Total Invest:xxx Ownl share : x % Product lines Sales

  36. “Customer“Relationship compared to competitors example According to ‘Relationship Assessment Questionnaire’ Partner Trusted Advisor Solution provider Credible source Vendor Own company #5 #4 #3 #2 Competitor #1

  37. Chairman of the Managing Board CEO + KAM Managing Director Cable, Multimedia Managing Director Consumer Information Technology BD director + KAM BD director + KAM CIO + KAM Managing Director Business Customer Managing Director CFO Finances / Personnel Managing Director Network N.N. KAM CFO + KAM CEO + KAM “Customer”Customer / KAM Organization Map 3.Status * Mentor + Supporter = Neutral - Non-supporter x Ennemy 1.Buying role AApproval EEvaluator DMDecision Maker UUser example 2 3 1 4 2.Buying Orientation $ Financial T Technical R Relationship B Business 4.Frequency of contacts No Contact / Brief contact ! Multiple contacts ** Ongoing access

  38. Don’t have to tell you... always listen first to your Customer!

  39. References • Research on Strategic Account management Ghent University: http://studwww.rug.ac.be/~dgosseli • SAMA: Strategic Account Management Association : http://www.nams.org • Research on Sales & Account Management Erasmus University: http://www.erasmusforum.nl/index.html • Sales Research Trust of Dr. Kevin Wilson: http://www.sales-research-trust.org/ • Lewis, J.D. (2000) « Trusted Partners, How Companies build Mutual Trust and Win Together », Free Press: New York • Verbeke, W and Nagy, J. (2000) « Adaptief en Strategisch Accountmanagement », Samsom: Alphen a/d Rijn, Netherlands. • McDonald, M. and Rogers, B. (1998) « Key Account Management », Butterworth Heinemann: Oxford, UK. • Day, G.S. (1999) « The Market Driven Organization », Free Press: New York

  40. Content • Concepts & Definitions • Different types of Account Management • Definition of Strategic Account Management • Strategic Account Management Process • Case Study • Conclusions • Summary

  41. Conclusions (1) • Develop Strategy, based on customer portfolio and not on products. • Select your customers and focus, based on relationship potential. • Think in terms of value for the customer, using all capabilities of the company to solve problems. • Trust = Be immediately available for the customer with the same team. • Use Account Management for the most important customer portfolio who are willing to develop a relationship. Source: D-P Gosselin, 2002

  42. Conclusions (2) • Account managers are not sales people • focus on relationshipbuilding • Solutions/coordination • long term • Entrepreneurship • Limit the number of key customers! Not applicable for everyone: very expensive • Key account management only possible if operations are integrated in the process ! • A key account is a market on its own => Develop a customer business plan to approach and deliver in a consistent way Source: D-P Gosselin, 2002

  43. Conclusions (3) • It takes a lot of commitment to implement a strategic account organization: time, resources, top management focus • Internal communication is key (80% of success) • Selection of strategic accounts: criteria! • CRM is not about Strategic Account Management. A customer database software can not compensate for a bad process or strategy. Source: D-P Gosselin, 2002

  44. Content • Concepts & Definitions • Different types of Account Management • Definition of Strategic Account Management • Strategic Account Management Process • Case Study • Conclusions • Summary

  45. Summary (1) • 5-7 times more easy and cost effective to grow the existing customer base. • Value of a “Strategic Relationship” is worth 15% price increase. • Select customers on “Relationship” potential, strategic fit and your willigness to invest in specific competence leverage • Strategic account management is a different process compared to key account management or key account selling • Its nature is more strategic, interactive, dynamic, proactive and competence driven than a sales or marketing process Courtesy: D-P. Gosselin

  46. Summary (2) • Building a customer focused organisation for competitive advantage in business markets implies to manage a customer base thru strategic account management • The strategic account manager should coordinate the dynamic resource allocation and solution adjustment related to the PLC of the customer: This is a top management function. • Top management should understand their role, the change impact, investments and process implications needed to introduce Strategic account management: It takes time, money, vision and leadership to succeed. Courtesy: D-P. Gosselin

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