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