Your current customers are in effect your competitions biggest
prospects, therefore without Key Account Management companies are simply
failing to plan for success. Furthermore planning to upsell and cross sell to
existing and different areas of the account will not only provide additional
revenue, but also serve to “tie” you in further. A well-planned,
comprehensive key account management strategy won't just keep your best
customers satisfied -- it will also provide opportunities to exponentially grow
the relationship. Your retention rates and bottom line will both benefit.
So
given the importance of Key Account Management, it is then vital everyone
understands the fundamental principles involved as follows.
SEGREGATE ACCOUNTS.
In most businesses it is simply not practical for every customer to have
a Key Account Plan, we therefore need to decide which customers need to be managed.
Selecting which accounts are to be managed is not simply about choosing the
largest accounts the business has. Often we need to consider which are the
“high growth” accounts, these can often start small but can be tomorrows Key
accounts. Other strategies might include “managing” accounts before they are
even customers. If for example you are in the process of trying to win a major
account you may wish to “act as if” and start the Key Account Management
process early as part of your Business Development plan. Consider also
Strategic Accounts where a particular account has a Strategic value to you,
such as a High Profile account within an industry, or an Innovation Partner. Be
careful also not to have too many Key Accounts that become impossible to manage
because of resource constraints.
UNDERSTAND RELATIONSHIP SELLING
Key Account Management is all about relationships and your team need to
know and understand how to create relationships, build relationships and
sustain relationships. Choosing the right team to
manage your Key Accounts and the relationships therein is vital if you are to
be successful. Think of every touch point your Key Account customer will have
with your organization and then ensure every team member receives appropriate
Key Account Management training. Benchmark your
existing relationships, and be sure to include the relationships with people in
the customer organization that you have no relationship with, poor
relationships and good relationships.
KEY ACCOUNT MANAGEMENT GROUNDWORK
Every plan needs Goals and it is always best to include supplementary
goals in addition to the obvious revenue goals. Good Key Account plans will
include Customer Satisfaction goals, Retention Goals, Longevity Goals, Relationship
Goals, Business Benefit Goals and Shareholder Value Goals for example. In
addition to the Goals consider suitable Key
Performance Indicators and be sure to measure and report your successes.
Key Account Management is not only vital to business growth it is now
often expected by many large corporations. Often starting the process can be
difficult, as regardless of which Key Account Template you choose, you will
more often than not end up with a document that has more gaps than information.
In reality this is a good thing as it forces the Key Account Managers to go out
and ask more questions, which can only be good for the business. In the same
way that you need to plan for the future, so do your customers and they then
will be more than happy to answer any questions and be included in the initial
Key Account planning process.
KAM BLENDS WITH VALED CREATION SELLING
The Value Map is one key tool salespeople can use to determine the customer's
true view of value. Using the Value Map, it is possible to carry out a detailed
analysis of the customer's value position and where the salesperson stands
relative to the customer and the competition. There are two components to
value: price and performance. Some buyers want the highest performance and are
willing to pay for it. Others will accept lower levels of performance in order
to get a lower price. Between these two extremes lies the fair value line, and,
every customer is somewhere on this line.
The important thing is how the buyer defines price and performance. For
some, performance means the latest technology, while for others it is a high
level of service. Similarly, customers define price differently. Some will be
more sensitive to initial price and cash flow issues. Others will focus on the
long-term costs of ownership and the total price over time.
With these different views of value, salespeople can be at a competitive
disadvantage for two reasons: they don't understand how the customer defines
price and performance. To create a competitive value strategy know how
the the customer defines performance .As information is
gathered about the customer, it is essential to know the definition of
performance from the customer's perspective, not your own. Don't assume because
your company is known for the latest technology that the customer values that
highly. What does the customer think is most important to solving their
problem? Is it after-purchase service? Ease of use? Reliability?
Like performance, customers will define price differently. Some customers
need to keep the outlay of capital to a minimum, so initial lower cost and
long-term payments represent a better price. For others, the total cost of
ownership is more important, and they can accept a large initial payment if
that will lower the total cost of the product over its lifetime. Once you
understand the customer's idea of value (price and performance), you can place
the customer on the Value Map, then yourself and your competitors. Where are
you relative to the customer and the competition? Clearly, if you are closer to
the customer on the Value Map than any of the competitors, then you have an
advantage. If you are aligned with the customer on price but to the right on
performance, then you are offering superior performance at the price the customer
wants.
with best compliments
Dr Wilfred Monteiro
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