Transcript Key Account Management

Key Account Management
McDonald and Rogers (2000)
Changing world of Personal Selling
• Transaction focused
• Hard Sell techniques to close the sale (see
Yr. 1 notes)
• DMU theory considers the way decisions
are made inside the organisations
– Users, Influencers, Deciders, Approvers,
Buyers, Gatekeepers (Webster and Wind 1972)
• RM shifts emphasis to long-term retention,
growing business together
• Globalisation
– fewer, larger customers
– opportunities for growing together
• Mature Markets
– intense competition
– price led ‘re-commoditisation’
– importance of retaining and developing existing
business
• resulting in Customer Power
– demanding sophisticated, bespoke solutions
Key Accounts
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Identified as part of Strategic Planning
80/20
not just the biggest but the best potential
using BCG/GE/McKinsey matrices
– market growth/ market share
– market attractiveness/company strengths
• Identify target segments
• Select compatible partners
• Analyse their strategic plans to understand
how you can/do add value to their activities
Stages in KAM
• Pre– prospecting, bidding for business
• Early
– one of many suppliers (price-led)
– contact only through sales - buyer depts
Sales
Buyers
Stages in KAM
• Mid– preferred supplier (over 50% share)
– regular interaction between staff in many depts
but account manager still the main contact
– some degree of trust and commitment
– but alternatives and exit strategies still
considered
‘Gone are the days of the expense account lunch,
instead the KAM executive will organise skittles,
tennis or golf tournaments to strengthen the
web of transactions between the two
companies’
Partnership KAM
• 100% share, commitment for 3-5yrs
• Open-book sharing of information, expertise,
testing of innovation, joint marketing campaigns
• Full alignment of all departments
Account
Manager
Steering,
coordinating
role
Main
Contact
Synergistic KAM
• You can’t see the join
• teams from each organisation work together
on projects
• long-term decisions made jointly
More likely to be found
– in complex products which are tailor-made
– Where quality is vital (safety, legal, competitive
advantage reasons)
– stable industrial markets (not fashion-led)
Why things go wrong
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Change of key personnel
Breach of trust
Failure to deliver expected quality
Cultural mismatch
Changing markets
Financial problems
What makes a good KA Manager?
• Personal
– integrity, resilience, likeability
• Knowledge
– product, market, financial, legal, cultural
• Thinking skills
– creative, flexible, strategic, lateral
• Managerial
– listen, persuade, lead,
– credibility, admin.
Selling is less than 10% of the job
• Social skills
– gain networks within the buying company
– organise events for the two staffs to meet & mix
– build formal or informal multi-disciplinary
teams to improve service
• but never forget it is about making money