The Shift to Key Accounts Management

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The Shift to Key Accounts Management

Not every business needs a Key Accounts Management function or team but many more are finding they do. Why? In recent times we are witnessing a distinct shift to Key Accounts Management with five major events fostering the development of key account management as a crucial business function. Market maturity Increasing cost of sale Customer / client negotiating power Pressure [...]

March 22, 2013 in Business Acumen, Key Account Management

Market maturity
Increasing cost of sale
Customer / client negotiating power
Pressure on margins
Increased local, regional and global competition

customers request tailor made solution

In particular, Customer Power has changed the game. We are seeing big customers getting bigger and at the same time they are rationalising their supplier base. Buyers are becoming much more knowledgeable and more sophisticated and are demanding tailor made solutions. This is increasing the cost of serving customers so buyers and sellers are developing new ways of working together.

So, is your business ready for Key Accounts Management?

Many organisations made the move to key accounts management in the hope of capturing a larger slice from larger customers. As a consequence companies geared their operations to deliver on the premise and many were disappointed when key accounts failed to deliver anything more than “big orders”…

You can’t expect to get any meaningful benefits from something that is misaligned!

So, what is Key Accounts Management?

An important point needs to be made here: Key Accounts Management (KAM) is NOT Selling. Confused? Well you’re not alone. Many people think Key Accounts Management is just a fancy way to sell. Which it is not.

If the majority of business a company receives from its existing customers is in the form of a key accounts, then the role of the sales organisation is Customer Development not Traditional Selling!

And Key Accounts Management is not about generating new business either. Still shocked?

Well, Key Accounts Management is all about helping important customers improve the way they do business by providing them with easy, consistent access to the specialist domain expertise, products, services and solutions that the sales organisation has. The consequence of providing this added value and support is reciprocity in the form of first option of more business opportunities, at better margins.

value for money

And this thinking isn’t just coming from the supply side, it is coming from the customer as well. Buyers/customers are looking for better value, more efficiency and complete peace of mind. These demands are shifting professional buyers’ priorities and driving better management of increasingly fragile supply chains. For instance a typical large company spends between 40-70% of its total revenues on third party goods and services. More and more organisations are recognising this fact, and seeing the risks and opportunities on the supply side of business. They are investing far more in better management of the supply side.

That is why Key Accounts Management is good for business.

Key questions you need to answer before starting the Key Accounts Management journey…

How do you define key accounts?
What are the objectives for your key accounts initiative?
How will your key accounts approach differ from your sales approach?
What do you want to achieve from your key accounts initiative?
Do your key accounts managers have an appetite for change?
Can the organisation support a totally new role for business development?

If you need support or advice designing your own sales strategy or want to access key accounts management training please contact us on 03 95330000.

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

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‘No’ to sibling rivalry & ‘Yes’ to Sales and Marketing Partnership

Sales is the life blood of any business – without customers, members, supporters, patrons and the like, organisations cannot exist. Sales & Marketing’s sole focus is to attract and retain viable customers for their organisation. Even though Sales & Marketing share a common and noble purpose, we often find they are working at odds with each other taking sibling rivalry [...]

June 21, 2012 in Key Account Management, Marketing, Sales Culture, Sales Leadership, Sales Strategy, Social Media

Yet life would be wonderful if sales and marketing teams could get along and work together. Unhappily the relationship is often fraught with conflict, turf wars and jealousy. However, it is possible and indeed necessary now, to create a cross-functional partnership that is effective and co-operative and creates meaningful value i.e. revenue, brand equity, loyalty, good will, profit, genuine corporate citizenship, etc., for all parties.

Let’s look at some of the ways we can build viable bridges and partnerships between sales and marketing:

Learn together

Sales and marketing departments are always expected to work together and collaborate yet they are treated as two separate functions. By bringing them together and educating / training them in the same things -i.e. sales processes, sales strategy, marketing concepts and strategies-, giving them a common language and ensuring each area understands the mechanics, goals and objectives they want to achieve we can begin to find common ground, a shared vocabulary and shared goals. People from both areas benefit from learning new skills and acquiring new knowledge and exploring new applications which in turn facilitates communication as well as aligning thinking, values and shared purpose.

find the common ground

Commit to a Common Understanding and Common Ground

Marketing deal with groups and sales deal with individuals. If sales and marketing work as two separate entities with different vocabularies, different goals and different projects, there’s always going to be natural barriers. Instead involve marketing in developing sales account plans and sales creating marketing plans. While this won’t fix everything it becomes an important influence in the process of creating an effective marketing and sales partnership.

Share Gain & Pain

Therefore one of the best ways for marketing to understand what it is like in the field is to allow them to experience it. When marketing people get in front of customers and experience the challenges and opportunitiessales peopleface everyday they have a better understanding of how the business needs to connect and interact with its client base and market place on real terms. As a result marketing teams are able to create more effective, real, marketing programs.

audit closed loop by sales and marketing

Create a Marketing-Sales Supply Chain

Get sales and marketing to create a map of the marketing and sales process, from marketing profiling a market segment through to sales closing deals and service feedback loop.

Close the Loop

Make sure there is a feedback process from sales to marketing. We cannot tell you how many times we hear how sales didn’t know this or that or marketing would have done something different if sales had only kept them informed. The best organisations are those that use sales as a resource to determine what is working and what isn’t. Sales should be encouraged to provide comprehensive, constructive feedback so that marketing can make adjustments for the future.

Here are some more related articles you might be interested in:

Why selling is now a team sport

From mass marketing to markets of one

Move over mass marketing here comes sales strategy

Leadership, sales and a clear message

Who is your brochure written for?
Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

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New Kid on the Block: Customer Experience Management

May 3, 2012 in CRM, Customer Service, Key Account Management, Sales Leadership, Sales Management, Uncategorized

The combination of an increase in the use of technological and social media such as Facebook, LinkedIn, Wayne etc. coupled with the proliferation of data these systems generate – all of which is becoming more easily accessible – may well see the death of Customer Relationship Management Systems (CRMs) as we know it. What’s more, as sales embraces the technology and drives toward the increasingly more important aspect of buyer relationships – i.e. management of the customer total experience – the demise of CRMs may be precipitated.

the shift is not subtle

The shift could see the historically important Customer Relationship Management concept (and along with it, the technology of CRM) now being replaced with a new focus – Customer Experience Management (CEM) – as more and more buyers begin to demand being treated as individuals and as sales organisations commence harnessing a combination of intelligent buyer data and clearly defined roles for their sales, service and marketing teams to fulfill that expectation.

And the shift is not all that subtle!

Seen by management as a boon and the ability to get a single view of customers; used by administration and accounting to track customer purchasing and payments, and viewed by the majority of salespeople as an organisational policing tool that is little more than over-inflated list / prospect manager, that takes too much time and delivers too little value, CRMs have seen their fair share of ups and downs. But all of that is coming to an end. The increasingly sophisticated demands of customers is forcing discerning sales leaders to re-think their customer relationship management protocols.

Originally technology lead, CRMs have never really been user friendly. Millions of dollars have been invested and re-invested in trying to make the protocol deliver on its promise – i.e. that single view that not only helps organisations develop effective strategies, but also improves sales performance. But if that were true why would companies like IBM move their 67 000 seat CRM (as they announced less than a week ago)?

What is forcing the change? The seismic changes taking place in the sales arena – i.e. the continued fragmentation of buyer segments; the demands of increasingly sophisticated and better informed buyers, with less to spend and greater needs; and the fact that buyers now have ample choice – has made understanding the expectations of buyers and their total experiences with their present supply chain an imperative. Add to this the complexity that today sales has to be driven by its own unique strategy, rather than a panel beaten marketing plan, and understanding the total experience of buyers s self-evident.

In the era of Customer Experience Management, sales leaders and their sales people will now be looking for a new kind of ROI – Return on Input If systems and protocols can’t correlate customer data and provide predictive trends and intelligent ways to reduce the cost of sale, drive sales strategy and improve sales effectiveness, no system or protocol will survive.

The demands don’t end with sales leadership.

With increasing pressure on them to perform, sales people too are making a shift and demanding that CRM provides different support. Savvy sales people realise that in order to sell effectively – whether their sale is product or solutions based, they have to have a better grasp of industry, market and customer knowledge. They expect to access – as easily as possible, and now days usually from a mobile device – the important information that will help them identify opportunities to discuss solutions with their customers.

make key account management easier

With an increase in the need for channel and key account management, as another driving force, coupled with the more strategic approach to selling that is seeing a ground swell in Australia – particularly as we compete so heavily with the Asian bloc – knowledge exchange has become one of the all important differentiators, along with ease and speed of access.

With the advent of Customer Experience Knowledge we are likely to see business intelligence systems (BI) drive Customer Expectation Management, not data collection. Sales leaders will shift from looking for data to demanding a contiguous streaming of information and IT people will have to change their focus to data interpretation and application.

Apply the knowledge that sales leaders can derive from understanding their customers’ total experience to sales strategies is going to help organisations regain some control of their future. Failure to harness this powerful concept and tool may well result in companies seeing margins eroded, unnecessarily!

Remember everybody lives by selling something.

Author: Sue Barrett, www.barrett.com.au

1 Comment »

You don’t have to make Negotiation a part of every sale

February 2, 2009 in Business Acumen, Key Account Management, Negotiation, Sales Relationships, Sales Results, Sales Skills, Sales Tips, Value Proposition & Value Add

I often get requests by sales mangers for negotiation skills training for their sales people when in fact upon further investigation their people usually need consultative selling skills training first. You cannot negotiate effectively if you cannot sell effectively first. Both are processes which need to be learned and applied in the correct order. However over 90% of sales people follow no logical process when selling or negotiating leaving their sales at risk.

So to clear up the confusion between selling and negotiation I thought it might help to examine when you sell and when you negotiate.

It’s important to note that when you are selling, negotiation is not mandatory. You do not have to negotiate at all if the customer’s issue is very serious and outweighs the cost of your solution and they to buy outright

Everybody negotiates all the time, at work, at home, and as a consumer and as a sales person. For some people it seems easy, but others view the process of negotiation as a source of conflict to be resisted and avoided if possible.

Negotiation is a process and a skill that can be developed. Negotiation can be described as a process that involves two or more people dealing with each other with the intention of forming an agreement and a commitment to a course of action. In a sales environment, negotiation often involves a series of communications between two parties to form an agreement about the details of a sales solution.
In many cases, it is possible for a proposal to be generated that satisfies the needs of both parties. However, sometimes one or more parties may have to accept less than they had hoped for when they entered the negotiation process. And finally, in other situations, the fulfillment of one party’s wishes may come entirely at the expense of the other party’s.

Therefore, negotiation is the process of navigating your way through each of these alternatives, ideally aiming to come to an agreement that is complimentary to both parties’ needs.

Possible outcomes
There are five possible outcomes of negotiation:

Compete = Win:Lose
Avoid = Lose:Lose
Accommodate = Lose:Win
Compromise = neutral
Collaborate = Win:Win

In my experience when I negotiate I aim for #5 and get either #5 or #4. I know that I do not want #’s 1-3 to happen. However too often I see sales people end up with #’s 2 or 3. This is no good for anyone and can train clients to expect things they do not deserve like unnecessary discounts.

Rule of thumb for negotiation in sales:

Unless you have the power or authority to change or modify terms, create new product solutions, you cannot negotiate.
Negotiation should never be a substitute for selling. You need to be able to sell well first and foremost.
Negotiation is an effective strategic tool that you use ONLY when you need it.
The earlier you give away concessions in the sales process the less impact they will have.
Be aware of giving sales people the authority to discount. All too often this is a licence to give away your margins too soon and too often. We see this when people ‘cave in’ on price too soon for fear having to deal with potential conflict which usually doesn’t eventuate if the sale is done effectively. However they never let the sale run its course to find out.
Discounting is a negotiation tool that should only be applied as a last resort and should have a trade off in it for your business so can you benefit from the deal as well. This is different from volume pricing which rewards people for buying bulk from you.
If you postpone tough negotiations whenever possible you will miss learning about new things, getting new ideas, new ways of pulling your offer together as well as creating potential conflict down the track.

You sell when you:

Identify clients’ real needs and priorities, create viable solutions that are of value to the client and outweigh the cost of purchase and gain agreement to move forward to close the deal and do the work.
Can’t vary the terms. If you can’t vary terms and negotiate and the client won’t agree to move forward with you on the current plan then it is a ‘no sale’. Move on rather than give it away. Giving it away is not negotiating it is just giving something of value away which costs you.

You negotiate when you:

Both parties can vary the terms
Resources are scarce
Agreement and conflict exit simultaneously

Value versus Cost

To help you avoid unnecessary negotiations when selling first of all find out what people really value and what is most important to them.

If you and your sales people are having trouble doing this then you need to improve your and your sales teams’ ability to have quality business discussions with clients and prospects, in particular, their ability to thoroughly understand their customers priorities and business needs and how your products and service can be crafted into relevant solutions that will address specific requirements and create value for the client.

This would include developing their questioning, creative problem solving, up selling/cross selling and solution selling skills.

Effective negotiation in a sales situation requires people being able to:

Be Assertive
Challenge every assertion
Get the real facts before offering up anything
Uncover real needs and issues
Negotiate late and negotiate little
Manage conflict and not take it personally
Analyse the situation and the demands and weigh them up appropriately
Keep the customers’ needs in mind at all times as well as your own
Aim high
Respond to demands for concession
Develop a proposal with guide-lines and trade-offs (if necessary)
Prevent the customer from ‘fragmenting’ your proposal
Present a total proposal that ‘adds up’ to a win/win solution
Focus on achieving satisfaction for both parties
Don’t make the 1st move
Don’t’ accept the 1st offer
Are willing to walk away
Use all their most effective communication skills (listening, paraphrasing, questioning, problem solving, etc.)
Apply a process
Don’t avoid negotiations
Have a ‘negotiation consciousness’

When do you need to negotiate instead of sell?

When a client demands an arrangement which is different from what you are able to offer
When you are dealing with a tough client who wants to ‘win’
When a client and you disagree on some aspect of the proposal
When the client will not agree to your initial offer (find out why because some people just like to win and want to bargain as part of the process. This is quite common is some cultures as part of the ritual of the sale)
When we are unable to reach agreement, even after many discussions
When you can’t move forward unless you change your approach some way
When you can’t deliver from you current suite of resources or you need to step outside of what you normally do to win the business (take care as this can be very costly)

I hope this helps put some perspective to selling and negotiation. I have found Neil Rackman’s Major Account Sales Strategy book is a good resource on this topic.
Happy selling and success to your sales negotiations.

Contact us to improve your selling and negotiation skills on 03 9532 7677 or You can reach me via http://www.barrett.com.au/AboutUs/ContactUs.html?ONEPAGE=TRUE.

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Account Planning, Management & Development

September 10, 2008 in Key Account Management, Sales Consulting, Sales Planning, Sales Relationships, Sales Strategy, Sales Tips

As markets tighten and market competition increases, it becomes increasingly difficult for companies to achieve product differentiation in their market place. As such, businesses will find it harder and harder to optimise their profits unless they develop effective strategies to achieve differentiation. One way to accomplish this is through the enhancement of customer intimacy.

Account Planning, Management & Development is the process that organisations adopt in order to prioritise their customers in terms of value to the business. In most businesses, the 80/20 rule applies where 80% of current and/or potential revenue comes from 20% of the customer base. However, in recognising the value that these 20% of customers hold, it is important to adopt a strategy that is going to ensure that they are handled in such a way that maximum effort is focused on the activities that will yield the greatest potential for the company in a profitable fashion.

Successful Account Planning, Management & Development ensures that a company recognises the importance of certain customer relationships to the future of their organisation and treats these relationships as an asset to the company.

The process used to categorise customers in terms of potential as well as the process adopted to manage and develop these customers effectively are paramount to the success of any Account Planning, Management and Development strategy.

So what is a Key Account?
Essentially, it is a customer who can help to shape your company’s future. This may not necessarily be your largest customer nor the highest spending customer. In this way, the top 20 revenue, one-size-fits-all approach can be costly and risky.

Once you have completed your customer research, a number of factors should be assessed when deliberating your Account Planning, Management and Development strategy:

Current revenue profitability vs. potential revenue profitability
Complexity of needs
The industry in which they operate and its viability
Financial stability

Although the process of developing and managing Key Accounts more intimately yields greater customer penetration or share of wallet, the costs of maintaining an intimate relationship with clients can also be costly. It is for this reason that the ‘biggest’ clients do not always make the ‘best’ clients. It is a common mistake for organisations to simply segment their customer base into key accounts based on their revenue contribution, consider:

Larger companies often require more attention and expect not to pay for it
Larger companies tend to exert their power and negotiate lower prices, often exploiting suppliers by creating price wars (thus reducing profitability)
Larger companies employ the resources of smaller suppliers, only giving them small orders but getting the lowest prices so they can squeeze on their larger suppliers (again, affecting profitability)

It is often a hard lesson for salespeople to learn that many big companies rarely provide the return on investment proportionate to the amount of effort that’s required. In addition, these customers often compromise the company’s profitability significantly.

Analyse your accounts

So you need to analyse your accounts carefully. When analysing an account, your core focus is to interpret the customer data in such a way that will provide you with an understanding of how you can yield maximum potential from the client.

There are five key areas that need to be researched:
Strategic Information
This is the big picture information it explains why they are in business and where they are headed as an organisation. This information is critical to your basic understanding of the company.
Operational Information
The nuts and bolts of the organisation, the what, the when and the where.
Financial Information
This information is critical in assessing the ongoing viability of the customer.
Competitor Information
Recognise their strengths and minimise them. Recognise their weaknesses and exploit them. Understand what they are doing and know how to combat their activity.
Your Company History
Have a basic understanding of previous dealings with the customer but also know where to find more detailed records if or when required.

I hope this helps you plan and use your selling energy wisely.

Happy selling

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