Managing important accounts is a long-term process, it takes time:
We must recognize that we are in the management of large long-term accounts. It takes time to manage an important account and we will only receive a return on our investment on time if we can have a long-term result. In some of the organizations we’ve worked with, this is stressful because the whole culture is about creating a short-term sales result where product and profit are the primary drivers and measures of success. We should not underestimate the challenge that managing accounts important to corporate culture can pose. It emphasizes relationship more than product, profit more than volume, and team more than individual, long-term rather than short-term. At the same time, it is necessary to recognize the short-term practical realities of business life.
One of the best ways to handle this tension is to have someone act as a mentor, conscience, or guide for the account manager and the account team. They do not participate in the daily management of the account, but are invited to view and comment on the main proposals and presentations. Their primary role is to participate in the long-term plan review every few months to ensure that the relationship is as productive as possible and reflects the values of the organization as a whole.
The primary account manager’s role is to be responsible for the overall relationship. They influence everyone involved in the account to ensure a coordinated and synchronized approach. The lead account manager is responsible for writing the account plan, obtaining agreement and commitment from the team, and then monitoring implementation.
Managing important accounts involves relationships, not just a mechanical approach:
Under this heading we should discuss three main aspects of main account management.
o The importance of relationships in the Management of Large Accounts.
o The complexity of the relationships in the management of important accounts.
o Mapping of relationships in the Management of Large Accounts.
Importance:
At Major Account Management it is essential that we manage both people and processes. Of course, we must set the correct price for the product. We need to be excellent in administration. Our customer service and product range must be strong. But “people buy from people” and “we are in a people’s business.” Managing the complex range of relationships within a large account is difficult and demanding, but our ability to manage relationships will determine whether or not we remain successful.
Complexity:
In a reactive sale there is only one relationship: the one between the seller and the buyer. On large accounts, the situation is much more complex. There are often contacts at many levels and in many places. In a main account, we have identified 1000 relationships between the account team of ten people and the people who represent the client. But it is not just a problem of numbers, it is often a problem of politics. Some contacts don’t want us to talk to people from other departments or at different levels. It may also be that the complexity is due to the range of products. Users of one product rarely discuss the specifications of another product. In any complex relationship, some people will like us more than others. This is not to mention interdepartmental tensions. All of these things make important account relationships complex and we must acknowledge their complexity.
Mapping:
If relationships are important and if relationships are complex, then it is essential that we find a way to map, analyze, plan and monitor those relationships. In recent years we have found that a chess game-based approach allows for a very practical way to identify key problems.
If we can answer these questions with confidence and communicate our thinking to the entire account team simply and clearly, we are halfway to success. This approach has provided people across a wide spectrum of organizations with a common language and way of working.
Can only be done with selected clients:
The last word of this definition is selected. Choosing the right key accounts is vital for three main reasons:
o We do not have the resources to treat each client as a key account.
o Not all clients want to be treated as a key account.
o Selection allows us to prioritize our activities according to our overall business objectives.
Many organizations rate their primary accounts simply by the size of sales for the year, but the organizations that we see really making headway in Primary Account Management take other factors into account. They also make sure everyone knows who the main accounts are and why they are important accounts. It is important to be rigorous with the selection criteria you use! You will also need to apply some type of weighting to reflect your priorities. The fact that a primary account does not meet all of your criteria will not disqualify it from being a primary account. You will only need to score higher in other areas to qualify.
Based on this score, organizations can rate their accounts. They can be Premier, 1st and 2nd Division like a soccer league, or Gold, Silver and Bronze like Olympic medals or First Class, Club Class, Economy and Standby like an airline. The analogy of an airline is good because on a flight you can have people waiting who are completely satisfied with the service they are receiving, although they know that there are people who get a “better” service in Club Class. Rating your accounts is not a matter of giving some customers better or worse service. It is about giving all your customers an adequate service. When we select our primary accounts and consistently deliver on what we promise, we are managing our accounts professionally and efficiently.
Bottom line: key account management success factors:
or Successful role development:
o Effective working relationships with other team members.
o A continuous drive to improve the productivity of the account team.
o Management commitment to the role of the account team with opportunities for career progression.
o Reinforcement of the role through authorized career structures, job descriptions and basic training programs.
or Key Skills:
o Understand the financial and legal requirements of the account.
o Understanding of the commercial objectives of the company.
o Understanding of the commercial policies of the company.
o Generate high levels of product awareness.
o Understanding of the client’s business objectives.
o Identify decision makers.
o Understand the customer’s purchasing strategy.
o Evaluate competitive activities.
o Prepare an account development plan.
o Ensure efficient processing of sales orders.
o Generate the right levels of income and profitability.
or Basic skills:
o Delegation
o Interpersonal skills.
o Consulting.
o Financial control and analysis.
o Project management.
o Man management.
o Initiative and creativity.
Secondary skills:
For example, industry knowledge, competitive knowledge, product knowledge, etc.
Success factors in the development of key accounts:
or The stages of a long-term process
o Presale.
o Negotiation of contracts.
o Implementation / Delivery.
o Review.
o Operation.
or Goals for an account team
o Ensure that a consistent and professional image of your company is presented to the client as a business partner.
o Ensure a long-term business relationship with the client as a basis for business growth.
o Penetrate the customer’s organization and decision-making unit by creating new opportunities that can be exploited to accelerate account growth.
o Understand and document, on an ongoing basis, the strategic direction and organization of the business of the client’s organizations.
o Provide the company’s senior management team with feedback on the long-term growth potential in the client’s market sector and on the critical success factors to exploit it.
o Ensure that the company’s solutions are technically sound and based on adequate knowledge of current requirements and reinforce the customer’s perception of the benefits of the company’s market approach.
o Ensuring that the company’s total resource is delivered in a manner that meets customer requirements and supports the objectives of the account plan.
Conclution:
An effective primary account management strategy depends on selecting your primary accounts wisely, creating a robust, consistent, and flexible way of working with primary accounts and other clients, and then implementing the plan in a disciplined, effective, and efficient manner.
One of the successes of the Major Account Management program has been the creation of common models and language that facilitate discussion and planning between units and departments. It has also stimulated our clients’ commitment to planning key long-term relationships. Managing important accounts has many implications for individuals, departments, and the company as a whole. It will always be demanding, but if done right, it will be very rewarding.
Copyright © 2006 Jonathan Farrington. All rights reserved