“Dare to be….Key Account Management”

As a coach with extensive sales and marketing experience I often get asked about growing sales and improving sales performance. To me the role of B2B selling has two key functions:

  • finding and winning new customers
  • looking after and developing the business opportunities within existing customers

What I want to look at in this newsletter is to address the second of these two functions and focus on the specific role of Key Account Management.

For most businesses 80% of revenue comes from 20% of their customers so it is vitally important that you identify who these top 20% customers are. My first recommendation is for you to VERBALLY ask your sales, marketing, production, accounts and admin teams to identify who they think are your most important customers. I suggest verbally because you want to get at their instinctive understanding of who they think is important not to do some research and come back after detailed analysis………….I think you’ll be surprised at the answers that they give!

After asking your question my experience indicates that there will be a significant mismatch between departments and the reality of those accounts that actually are Key (a key account can be defined by your own criteria but will probably be recognised because of such factors as: is a high revenue/profit generator, offers opportunities for sales growth, is strategically important, is under constant attack from your competitors) This mismatch has potentially serious implications for your business because it probably means that you are not giving the time, resource, commitment, service that key accounts deserve and allocating disproportionate amounts on those that are not.

Having established who your key accounts actually are, you should identify what your client thinks about you. As a suppliers you will want to move up the “ladder” from:

  • Vendor – Transactional relationship between buyer and seller is simple, reactive, competitive product supply, commodity provider status. Price sensitivity is high.

To:

  • Preferred Supplier – a better relationship where you are recognized for adding value and providing solutions but buys competitor products from time to time. Price sensitivity is decreased.  Transactional relationship between buyer and seller is more co-operative.

To:

  • Trusted Advisor/Business Partner – the jack-pot position. Characterised by high levels of involvement, price sensitivity is very low, you are considered an “insider” and you have excellent relationships with the executive team. Transactional relationship between buyer and seller is integrated and collaborative with the level of involvement between the two companies often complex.

To help your company move up this “ladder” you should undertake the following:

  1. Develop a Key Account Action Plan.
  2. Establish a Relationship Management Programme.
  3. Develop a communications programme.
  4. Sell using consultative selling techniques.
  5. Manage the account.

These 5 areas are discussed briefly below:

  1. Develop a Key Account Action Plan

Set account objectives – these should relate to how you are going to help your client’s business improve. I strongly believe that Key Account Management (and selling in general) is based on an approach where the customer is the focal point of all sales activity and that we are not there solely to “sell ‘em something.” Helping our customer solve business problems and aligning our approach to the way they buy, is key.

Develop action plans to achieve the objectives: work with colleagues to develop the tactics. Consider realigning aspect of your offering – Products design, service offering, pricing model, distribution/stock policy etc.

Review the use of internal resources and time allocated to developing the account.

Most importantly focus on what will position your company as market leaders in the eyes of the client and what will help establish you as the “go-to” expert in your market. Being seen as an expert, someone who can be trusted to provide good advice, someone who can be relied upon is key to becoming a trusted advisor.

A trusted advisor never stops looking for ways to become more valuable to their clients. Mainly through questioning skills, but also by orchestrating their own companies’ resources on the client’s behalf, they act like business partners rather than just a salesperson. A business partner is committed to the client’s success every day, in every phase of the client’s operation where the partner can possibly be helpful. A salesperson who becomes that kind of partner forges a bond that is very difficult to break. The client begins to turn a deaf ear to the salesperson’s competitors, not because their products and services and prices aren’t attractive, but because the relationship is too valuable to give up.

Write the plan and communicate it. I highly recommend writing the key actions onto ONE piece of paper, set deliverables and timescales.  Make sure that the one page plan is communicated to other departments who are involved in the deliverables.

  1. Establish a Relationship Management Programme.

The key to successful relationship management is to increase your influence. Consider these ideas:

  • Adopt the philosophy of helping your client improve their business as your daily mantra.
  • Be clear on the Features Advantages and Benefits of your product offering in respect of how it relates to the clients specific needs.
  • Create a organizational chart of the client company
    • Identify people on the chart as decision maker, influencer, neutral or antagonist.
    • Identify people on their chart by their behavioral styles e.g. use DiSC profiling techniques (see previous newsletters)
    • Identify individual’s key motivators. MD’s have different business objectives to sales, who have different objectives to production, who have different objectives to finance……………
  • Consider developing “mirror” relationships between individuals in both companies i.e. MD to MD; Technical to Technical, FD to FD ………………
  1. Develop a communications programme.

Establishing your company as the go-to expert can be reinforced with a concerted effort to build widespread awareness of your company’s products/services.

Consider the following:

  • Offer to write a regular article in the client’s newsletter.
  • Ask to speak at one of the client’s management conferences – get key individuals to present at one of your own conferences.
  • Run workshops and provide training.
  • Sponsor the client or key people within the organization when they undertake some charitable activities.
  • Sponsor more general activities e.g. a social event, dinner, party, printed programme.
  • Provide corporate hospitality.
  • Write articles for the relevant trade magazines that are read by your client.
  • Inform your client about what the market thinks that they do well, what their competitors are doing well.
  • Provide industry benchmarking information
  1. Sell using consultative selling techniques.

As a partner to your client it is important to conduct your sales activities as a consultant and not a vendor.

Ask questions in the following order (for more information on this see the following link http://www.cognisi.co.uk/training-programmes/question-based-solution-selling/ )

  • Facts or current Situation Questions
  • Issue or Problem Questions
  • Consequences or Implication Questions
  • Solution Questions
  1. Manage the account.

Management of Key Accounts requires discipline and focus. Ensure that all agreed actions are followed through and that in addition to your regular meetings you conduct a formal review with the client on a regular basis (at least twice a year). I advocate that for the formal review you email the client with an agenda a few days before the meeting and minute the outcome as you would with say a board meeting.

The benefit of setting an agenda is that it can be structured to enable you to address any issue that you want and to present your company as highly professional and in control of events.

The agenda can consist of any items that you want to discuss but could include the following headings:

  • Introduction – reason for meeting
  • Minutes of the last meeting
  • Review of trading (last yr./last qtr.?)
    • This enables you to go through KPI’s – identify any key issues.
    • This enables you to get a forecast for next period.
    • This enables you to ask question regarding new business and/or lost business.
  • Delivery
  • Quality
  • Payments
  • New product launch
  • Sales incentive
  • Market trends – Customers/industry developments/competitor action
  • Legislation/H&S
  • AOB

Having gone through the agenda issue the minutes within 24 hours.

Record all data regarding the account on using an effective CRM system that is visible to all people dealing with the account.

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