Bart Logghe - Philips Sales Management Forum - September 21 2007 - Athens Strategic Account Management in practice Common mistakes and critical success

Bart Logghe - PhilipsSales Management Forum - September 21 2007 - Athens

Strategic Account Management in practiceCommon mistakes and critical success factors

2CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens

Many of Philips businesses face similar customer challenges

Identifying, selecting and growing our business with the right accounts will determine success or failure!

– Increased concentration of sales with fewer customers – The top accounts are getting bigger and bigger– The power balance favours the customers– Increasing pressure on prices and margins– Increasing cost to serve– Organisations & systems are often structured per country or

product and not per account– The profitability per customer is unknown


SAM is all about resource management

• Making choices how to utilize time, resources and money

• Which customers to invest in?


Strategic intention customer

Str

ate

gic

inte

nti

on P

hili

ps

transaction

cooperation

partnership

integrationWASTE

RISK

Strategic AccountManagement

The development of Strategic Account relations


Today Philips is structured in two dimensions

Europe Middle East & Africa

North America

Latin America

Asia Pacific

Regions (Aligned by geography)

Lighting

Consumer Electronics

DAP

Medical Systems

PD’s (Aligned by products)


We have many Multi-PD, Multi-Region Customers

’


Philips becomes a “THIRD DIMENSION ORGANISATION”

Europe Middle East & Africa

North America

Latin America

Asia Pacific

Retail

Hospitals

Hotels

Aligned by:

• Key Account Customers

• Industry Segments

• Customer Groups

• Channels

Regions (Aligned by geography)

Lighting


DAP

Medical Systems

PD’s (Aligned by products)

Wholesale

Others

Auto-motive

Telecom

“Third Dimension Organisation”


Philips 10-Step SAM Approach

1. Strategic Account Selection2. Strategic Account Plan3. M&S Competencies framework (incl. job description)4. Strategic Account Manager selection process5. Management Development, training, coaching6. Account +market information system7. Contact Network8. Contact Report9. Internal Review10. External Review

Plan

People

Info

Review

Remarks:Ø Step 1, 3, 4, 5 and 6 should be covered at the BU/BG level Ø Step 2, 7, 8, 9 and 10 should be covered per Strategic Account


We have segmented our retail accounts according to global, international and local reach

Partnership

Performance

Wal-MartCarrefour

Tesco Costco

Metro

DSGBest Buy

AholdCasas Bahia

KESA

Auchan

Target

Home Depot

EDA

Casino

Circuit City

Euronics

Sears

Expert

Regional Key Account

Management

Global Key Account Management

N

D

EB

D

E

M

GLocal Key Account Management

High

High

Low

Low

EP

Amazon.com


Sales Top 20 retailers

02000400060008000

1000012000140001600018000

2004 2005 2006 2007 2008 2009

Top 20 accounts Philips B2C Business Linear (Top 20 accounts)

The importance of Philips top 20 accounts continues to rise

32%

43%

Source: Management Ventures Inc/Philips Market Intelligence


Philips is showing continuous and profitable growth with its top global and international accounts

Results: 2006 YTD December – per PD

International Key Accounts

Global Key Accounts


Domestic Appliances and Personal Care

Lighting

Total Global key Accounts

Sales YTD 06 Sales YTD 05


Domestic Appliances and PersonalCare

Lighting

Total International Key Accounts

Sales YTD 06 Sales YTD 05

+15%

+28%

+16%

+9%

+9%

-2%

+15%

+10%


US CE recognized as Vendor of the year at SAM’s USA – 2005 and 2006

Carrefour Best supplier of Masse de Marge – Spain- DAP-2006

One Philips Award –Gold and employee vote for One Philips Wal*Mart Approach- 2006

Through which we have received significant recognition

Best Buy Bravo Award (CE)- 2005Comet Awards (CE UK) - 2005Carrefour – Best Supplier 2007 (CE)

Wal*Mart – One Billion Dollar Supplier 2006


We are investing heavily in state-of-the-art key account management and sales competencies

• More that 1,750 Philips employees trained in 2006 in the field of key account management/sales and category management

• Joint training programs on category management with key retailers focusing on end user – and shopper insights

• Master classes on Driving International Key Account Management and Alignment with business management executed for executive management in all regions

• Succession plans and management development programs in place for GKAM’s and IKAM’s


In benchmarking ourselves against leading FMCG companies we show clear areas of strength

Companies interviewedCoca-Cola Heineken

Johnson & Johnson

Sara Lee Unilever

Diageo Nestlé

Philips is clearly leading in people competency management and account profitability measurement, but can improve multifunctional key

account management/customer centric organisation.


Common Mistake # 1Strategic Account Management is regarded as part of the Sales Function


Common Mistake # 2Strategic Account Managers have no P&L responsibility


Common Mistake # 3Strategic Account Management is not discussed in the Board room


Common Mistake # 4Strategic Account Management equals Relationship Management


Critical Success factor # 1Strategic Account Managers need focus and dedication


Critical Success factor # 2Strategic Account Plans focus on strategic alignment

How to align the customer’sstrategy with our strategy?

Strategy comes beforeaction planning!


Critical Success factor # 3A comprehensive SAM Program is required


Critical Success factor # 4Communication is integrated in the key account management system

Documents

Bart Logghe - Philips Sales Management Forum - September 21 2007 - Athens Strategic Account Management in practice Common mistakes and critical success