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Strategic Account Management:Concepts & Implementation for CEOs
and Sr. Executives
K. Krishnan
1/12/2007
Account Management structure
CEO
Director – Business
Development
Director – TechnicalSolution
Director – Finance
Director - HRDirector –
Development
Business Development Structure
Director Business
Development
VP – B DBFSI
VP – BDRetail
VP – BDTelecom
Business Development Structure
Director Business
Development
VP – B DUK
VP – BDGermany
VP – BDFrance
Business Development Structure
VP – BD BFSI
Manager – Strategic Account
Manager – Strategic Account
Manager – Strategic Account
Deutsche BankBarclays Bank
HSBC, SCB, AMEX
ABN AmroLloyds, NatWest
PrudentialLombardAlliance
Content
Session overviewClient needs assessmentAccount action planSession summary
What is strategic account management
A business strategy focused on a small number of important clients viewed as corporate assets with significant long term value
Solution orientation, revenue share maximization at requisite margin level and customer value creation are three most important objectives
Find ways to help both parties make and save money The voice of the customer within your company
Basics of Strategic Account Management (SAM)
Selection of the right account : High revenue Complex solutions Multi locations High growth High margin
Definition of the value proposition Appropriate solutions Value for money Long term orientation
Conducting needs assessment Current scenario Future plans Technology preferences Identifying key influencers
Create account action plan Account strategy Solution strategy Competition assessment Pricing strategy
Basics of Strategic Account Management (SAM)
Basics of Strategic Account Management (SAM)
Present findings to the client Deploy cross functional team Implementation of plans Summarized results for senior leadership for long
term strategic decisions
Help both parties find ways to make and save money
SEM – Key Account Selling
Pre Account Management Selling: One to One contact Supplier presentation focus on their own issues and
concerns Response to customer enquiries is “ Yes” and “No”
based on assumed customer needs and supplier capabilities
Seller seeks volume potential Customer seeks evidence of competence and
competitiveness Customer will judge competitiveness based on price Customer may require trial period The buyer may act as “Goal keeper” and prevent
access to other buyers
SEM – Key Account Selling
Early stage account management: Principal contact is between two people –
buyer and account manager The relationship may be competitive – each
seeking advantage Discussions dominate:
Price Supplier capability
Customer still assessing alternative supplier
SEM – Key Account Selling
Mid stage account management: Principal contacts start to facilitate other
contacts through mutual trust Increased time spent in meeting Increased trust and openness Mishaps can occur crossing set backs This is a lot of work for both buyer and seller
SEM – Key Account Selling
Partnership stage: Information is shared Relationship is based on trust Access to people is facilitated Clear vendor ratings and performance
measures are in place Value is sought through integrated business
practices Value is sought through focus on customer
needs
SEM – Key Account Selling
Strategic stage Joint R&D Transparent costs and margins Focus on innovation (blue ocean thinking) Joint business plans Collaborative approach to customers, new markets and
end users Shared communications Shared training
Help both parties find ways to make and save money
Needs Assessment
What is needs assessment A survey guide that is used to interview and
document client representatives How can it be used
One – on – One with your clients: The questions are asked by the Account Manager with or without presales team member and documents the response given by the customer
How long does this process last: At senior levels the interview should last about 45-
60 minutes, at the middle management level about 2 – 3 hours and at a working level could vary depending on depth to which data collection is involved
Needs Assessment How often is it used:
With all the top accounts, this is an ongoing process and is not time consuming since the additional information is incremental. However, in the case of a new client this could be a lengthy process
How does one deal with the data collected: Proper documentation Summarizing essence of finding Developing strategic solutions Sounding out customers
What are the advantages of this process: Improved understanding of customer needs Improved customer relationships Increased knowledge within our organisation Higher closure rates Better proposals and solutions Increased customer loyalty Well defined voice of a customer
Needs Assessment
How many organizations use a client needs assessment Global – 60% Indian – 20%
Most successful account managers do proper needs assessment and documentation. Though this is not a very “exciting” part of the account management process, it leads to much higher success rate
Needs Assessment – Client interview questions
Strategic: What changes have occurred in your industry
during the last two years How have these changes impacted your
organization What changes are forecasted for your
organisation during the next year What are the top three priorities for your
department in the next year
Needs Assessment – Client interview questions
Operation: How does your current business work Complete supply chain starting from vendor
end to consumer end What are the current processes (capture
workflow with input documentation, action at each step in the process and reports)
Level of automation and technologies used Current problems and gap areas Impact prioritization
Preparation for meeting
Define the clear objectives and goals of the meeting
Do some preparatory work about the industry, client organisation from the web or other published documents
Try to find out about the individuals whom you are meeting
In case it is an existing client, find out about the current status including customer issues, resolutions etc.
Long term decisions
Organizational strategy Planning process Competitive assessment New products and services Deployment strategy
Automatic Red Flags
Missing critical information: This should be identified at the earliest and gaps plugged. Gaps in information can lead to incomplete and incorrect solutions thereby loosing the account
Uncertain about information Un-contacted buyers Buyer is new to position Re-organization at the client company
Perception Is Reality
Response is determined by buyer’s perception of: Immediate business situation How will the proposal change that situation Whether or not that change will make the desired
impact Is the change marginal and is there value for money
Perception of buyer alone is not sufficient. All the people involved in the process of decision making should be
positively impacted
Response Modes
Result
Desired state
Desired state
Reality
Current stateDiscrepancy
Growth Mode
Result
Reality
Discrepancy
Vitals: Perceives discrepancy Receptive to change Change to improve a good situation
Probability of action: Very high
Trigger words: More Better Faster Growth Improved
Clutch Your proposal should be the change agent
Trouble Mode
Result
Discrepancy
Vitals: Perceives discrepancy Receptive to change Change to fix a bad situation
Probability of action: Very high
Trigger: Help – sense of urgency
Clutch Proposal must be the change
that will quickly reduce
or eliminate the discrepancy
Reality
Neutral Mode
Result
Vitals: Perceives no discrepancy Not receptive to change Nothing to fix
Probability of action: Medium / low
Triggers: Don’t rock the boat
Clutch Proposal is a threat unless
another buyer pressures
or you can demonstrate
discrepancy
Reality
Reverse Mode
Vitals: Doing better than anticipated Not receptive to change Nothing to fix
Probability of action: Low
Triggers: Never been better
Clutch Proposal has negative impact
on reality
Reality
Result
Buyer Types
Economic buyer User buyer Technical buyer Coach buyer
Economic buyer
Position: Rubber stamp Role: Gives final approval for buying
Controls money Has veto power
Focus Bottom line impact Organizational impact
Asked for: RoI Impact on organization
User buyer
Position: Tester Role: Judge impact on products / services on his /
her job performance: Will use or supervise use of products / services Link between user buyer’s success and the success of
product and service Focus
Task on hand Asked for:
Performance improvement for self Performance improvement for the department
Technical buyer
Position: Gate keeper Role: Measures quantifiable aspects of products/
services against specification Can’t give final approval Can advise against based on technicalities Criteria used: Price, delivery schedule, logistics, terms
& conditions, regulations, credit etc. Focus
Not win but play Asked for:
Does it meet requirement
Coach buyer
Position: Friend Role: Acts as a guide for sale:
Provide / interpret information about validity of single sales objective, other buyers, long term plans etc.
Focus Your success with this objective
Asked for: How can we ensure that this solution is
accepted