Key Account Management

KEY ACCOUNT MANAGEMENT

KEY ACCOUNT MANAGEMENT DEFINITION

KAM involves the systematic analysis, selection and

management of current and potential strategically

important customers in order to achieve a relative

competitive advantage in addition, it includes the

systematic development and maintenance of

infrastructure.

- Zupancic

KEY CUSTOMER DEFINITION

Is the name of customer who takes a key position in the

current and future existence of the company

Customer with at least 50 to 60 percent of actual

revenue/profit contribution or target sales

High value for the company

Extraordinary position as part of customer management

Personal care usually by Key Account Manager

MANAGER OF KEY CUSTOMERS DEFINITION

Key Account Manager handles specific requirements and

interests of key account customers

Care of a customer segment or a single, strategically

significant customer

Is the interface between customer and company. He

represents the company in the front of the customers’

business and vice versa

Provides a clear responsibility and a coordinated customer

contact

TASK AND OBJECTIVES maintaining relationships with key customers

Planning of customer

Intensify business

specific marketing

relations with key

strategies – actions and

customers

Maintain customer

Negotiating and

promotions

contacts and

coordinating partner

communication

for key customers to

impulses

reduce coordination

7

1

2

6

Advantage for

Advantage for

customer

company

3

5

Improve market position

Special customer

4

and competitive

requirements to internal

situation of the

Control functions e.g.

departments/forward to

company

monitor sales targets

contact person

AREAS OF EXPERTIZE importance areas of competence and requirements

Basic skills

Sociocultural skills

Sound knowledge of

Independence

Customer language

office

Creativity

 To share the attitude of customer

Conceptual skills

Experience with CRM

Customer orientation

 To be able to show interest in

 Analytical thinking

solutions

Negotiation skills/deal

different cultural groups

 Structured work

Degree

closing

 Problem solving skills

Excellent communication

Willingness to travel

 Strategic thinking

skills/presentation skills

7

1

Specialized skills

 In-depth knowledge

2

6

 Product knowledge

 Market knowledge

 Business management

skills

 Customer knowledge

3

5

Social skills

Formal competencies

 Enthusiasm/motivation

4

 Negotiation competencies

 Leadership

 Ability to make decisions

 Ability

 Status/position in company

contact/relationship

cultural groups

management

INSTITUTIONAL AND FUNCTIONAL KAM in practice it is often a combination of both forms of organizations

Institutional

Functional

Key Account

Key Account

Management

Management

Independent, separate organizational units,

Other function within company takes over the

responsible for the care of key customers

responsibilities of key account management (for

e.g. managing director, sales manger)

Choice of organizational form depends on

National/Int

Company

Number of

Cross selling

Customer

ernational

size

key accounts

strategy

structure

orientation

The term functional key account management also describes working

methods, internal processes and tools

MOTIVATION - DRIVE

Customer structure/dependencies

Forms of marketing/market participa nts

 Acquisitions, joint ventures, merger change

 New forms of distribution bring forth new provider

structure

seeking to target market riches

 Pareto principle (80 - 20 rule)

 Limited markets only provide a limited number of

 Dependence on few customer

potential customers

Internationalization/complexity

Competitive advantage/different i ation

 Changes in customer and supplier structures

 Greater competitive pressure that leads to greater

 International marketing structures

demand for suppliers

 Globalization of the procurement

 In-depth customer knowledge and stable network

International partnership

of relationships between customer and companies

 Develop differentiation potentials

Cross and up-selling potential

Customer/service marketing

 Cross-sell/up-selling additional business potential

Customer orientation

without complex and costly customer acquisition

 Interface key account manager

 Personalization of services

 Support customers with the business transactions

and increase success

PARETO CURVE 20% customers generate 80% sales

90

80

Turnover

Contribution

70

60

50

40

30

20

20% of the customers generate 80% of sales

10

0

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95

Number of customers in %

CUSTOMER GROUPS display potential key accounts

Development

Selection depends on industry, state

Internationally

customers with

of customer focus, business

aligned

potential

complexity and type of customer

customers

organization

Reference

Fear

customers

customers

Customers with

Rehabilitation

buying center

clients

Image

Major

organizations

Potential

customer

clients

key accounts

Know-how

Market

Strategic

Customers with

customer

leader

customers

complex

(networking)

structures

Key accounts are customers the company cannot afford to lose!

CUSTOMER GROUPS important key accounts in the focus of key account management

Strategic

customers

Major clients

(networking)

Customer 1

Customer 1

Customer 2

Customer 2

Customer 3

Customer 3

Customer 4

Customer 4

Focus

Customer 5

KAM

Customer 1

Customer 2

Customer 3

Fear customers

Customer 4

MAGIC TRIANGLE

High customer requirement and

rising expectations

Key Account

Management

SALES Vs. CUSTOMER SHARE schematic categorization according to sales and customer categories

Sales/revenue share

Number of customers

Differentiation of KA

(e.g. due to customer ABC

analysis

20

60%

Key accounts

A

100

30%

B

Major accounts

500

10%

C

TEAM AND PARTICIPANTS example of an key account team involved in the KAM organization

 Team players controlling the network

 Communication with departments

Core team

 One message to the customer

30 - 40% of working time for key

customers

Controlling

Logistics/IT

Marketing

Order processing

Product development

Top management

Regional sales representative

Key Account Manager

Business development

Sales support

Internal Partners

Extended team

Technical services

Consistent and complementary

Project related work for

Project manager

appearance of all employees

customers, less contact

Quality management

with customers

The composition of the individual customer specific key account team depends on

business and market

AREAS terms and subdivisions

 Competence

 Global accounts

 Task

 Organization structure

Marketing

Account

organization

management

Key

Key account

Customer

Account

Manager

Sales

channel

 Case management

 Distribution

 Organizational buying behaviour

 Sales channel

 Corporate social responsibility

 Supply chain

BUSINESS CONCEPT all elements at a glance

Key Account Management

Business plan

Vision

Objectives

KA identification

Organization

Human resources

Processes/tools

 Qualitative and

 Organizational form

 Requirements for KAM

 Reporting

quantitative

national/international

 Job description

 Review process

criterion

 Top management

 Career plan

 Key account plan

 Review process

sponsorship

 Compensation plan

 Various areas of co-

operation

 Sales controlling

Definition/concepts

The same understanding of terms throughout the company

KAM AND OTHER DISTRIBUTION customer structure and customer size as an important criterion for sales activities

Key Account Management

Area sales

Wholesale sales

Small

Large

Customer size

(in terms of turnover/sales volume)

FOUR STAGE MODEL from simple customer supplier to customer partner relationships

Partner

Value selling

Stage 4

Strengthen competitive position of

customer

(develop individual customer specific solutions)

Stage 3

Internal problem solving

(improve operating procedures/solve problem s of customers)

Stage 2

Service

(installation, maintenance, training, guarantees)

Product

Stage 1

(focus on features)

FIVE STAGE MODEL from simple customer supplier to customer partner relationships

Decrease

Contribute to the solution of

business problems

Contribute to solving operational

problems

Provide good service and support

Provide good products and/or services

Supply of raw material/commodity products

according to specifications

Increase

KEY ACCOUNT REVIEW criteria, weighting and evaluation

Customer

Place

Selection criterion

Our interests

Customer evaluation

Weighted score

A Score (1-100) Explanation

B Score (1-100) A x B/100

Actual revenue

20

Very well

20

x

Reserve potential

30

Just in: Cx, xxx

70

x

Yield strength

30

Good (19% DB)

20

x

Customer growth

5

Barely measurable growth

0

x

(1.5% p.a.)

Learning partnership

10

Little

20

x

for the future

Relationship quality

5

Very well

40

x

Sum/Rating

100%

xx

Legend: 1 to 20 points: very week, 21 to 40 points: moderate, 41 to 60 points: medium,

61 to 80 points: good, 81 to 100 points: very good

CUSTOMER RANKING representation of the key clients – customer per year

Top customer in year n

Top customer in year n + 1

Name

Turnover

Name

Turnover

1 Customer 1

XXX.xx

1 Customer 1

XXX.xx

2 Customer 2

XXX.xx

2 Customer 2

XXX.xx

3 Customer 3

XXX.xx

3 Customer 3

XXX.xx

4 Customer 4

XXX.xx

4 Customer 4

XXX.xx

5 Customer 5

XXX.xx

5 Customer 5

XXX.xx

HISTORY TRENDS development of KAM since the 1960’s until today

KAM in the U.S. (mainly manufactured goods)

KAM is coming to Europe (mainly food)

Professionalization

Internationalization/globalization

Key supplier management

Partnership management

Social media

networks in the

KAM

1960

1970

1980

1990

20XX

CHANGE IN SALES shift from product orientation to customer orientation

Product orientation

Market dynamics

Customer orientation

Sale of production

Maximization of customer value

Products are at the forefront

Value-added concepts from a customer

perspective

Product ownership

Customer owned

Increase of product sales

Networking vendors/customers

Services

Product ownership

Customized services

Increase of product sales

BUSINESS DEVELOPMENT process of the standard solution for strategic partnership

Strategic

CEO level

partnership

Key account

Executive level

management

Business level

Operating business

Portfolio and standard solutions

Portfolio level

CLASSIC SALES Vs. KAM overview of the different approaches

Traditional sales approach

Key account management

Single key customer are the focus.

Sales territories and channels as well as

Distribution structure and their processes

product groups from the basis for

are aligned to these customers

organization and distribution and their

processes

Basics

Short term, revenue oriented successes

Good customer relationships and

(statements) are more important than

recurring business are in the focus

long term customer relationships

Objectives/Justification

Bottom up business. Sales management

Strong focus on top down business

provides key objectives in relation to

Sales management sets sales targets

Focus

individual customer. Sales channels

Sales channel is partially defined

(strategies) are left to the KAM.

PROCESSES relationship management with key customers

Develop and intensify

Identify key customer

business relationship

Relationship

management

with key

customers

Evaluate business

Integrate and determine

relationships

function of KAM

PROCESS representation of the customer handling process

Acquisition phase

Order phase

Analysis phase

Win/lose analysis

Customer analysis

Contact

Quality control

Solution definition

Customer satisfaction survey

Presentation of solution

1

2

3

4

5

6

7

8

9

10

Gate 1

Gate 2 Gate 3 Gate 4 Gate 5 Gate 6 Gate 7

Quotation

Qualification tests

Contract negotiation

Contract negotiation

KEY ACCOUNT PLAN DIMENSIONS strategy tool – document with 8 essential building blocks

8

1

Goals,

Control

terminologies

and concepts

2

7

Identification of

Tools

key customers

Key account

management

6

3

Performance

packages for

Processes

key customers

4

5

Organization

Personnel

and key account

team

KEY ACCOUNT PLAN DIMENSIONS strategy tool – document with 8 essential building blocks

8

1

Control

Goals, terminologies and concepts

Which criteria and

What needs to be achieved with KAM?

indicators will be used for

What terms are used?

the controlling?

2

Identification of key

7

customers

Tools

Who are the key customers?

Which tools will be used?

Key account

Which ones can support the

3

KAM operationally?

management

Performance packages for

key customers

6

Processes

Which special services will only

How is KAM implemented

the key customers receive?

into the processes of the

company?

5

4

Personnel

Organization and key account team

What are the requirements to

How is KAM implemented into the

the key account manager?

organizations?

What are remuneration models?

How will the KA teams be put together?

CUSTOMER ANALYSIS profile and personal characteristics (alternative)

Customer profile

Operating profile

Customer

Name of external or internal

Positioning and brand How customer positions

customer that this account plan

themselves, what their brand

covers

stands for, operating principles

Primary purpose Customer’s mission statement

Core processes

Core processes, activities

or purpose, a short statement

critical for supply of their

of the customer’s overall plan

products and services to target

customers

Products and

Customer’s main products and

services

services

Structure and people Structure and organization of

customer's team, number of

Markets and

Customer’s main markets and

employees

customers

customers

Geographic locations Customers and key decisions

Unique

Unique features of this

locations

capabilities

particular customer’s services

opposed to other providers

Funding, growth and

Funding structure, performance

(USP)

profitability

in terms of revenue, budgets

and contribution

CUSTOMER ANALYSIS important objectives and projects of the customer

Top 1 objective:

Brief description of the objective, specific, measurable and with a clear

timing (SMART – scheme)

Top 2 objective:

Brief description of the objective, specific, measurable and with a clear

timing

Top 3 objective:

Brief description of the objective, specific, measurable and with a clear

timing

CUSTOMER ANALYSIS value chain according to M.Porter

Value

Output

Input

Primary activities

Inbound

Outbound

Customer

Profit

logistics

Production

logistics

service

Marketing and sales

Profitability of the

company’s activities

Company

Human

Technology

Procurement

infrastructure

resources

development

Secondary activities

CUSTOMER ANALYSIS SWOT analysis

Strengths

Weaknesses

Particular strengths

Particular weakness

That your clients excel

That your customer has

 How can I assist to improve this

 How can I support him here and

even more?

possibly turn weaknesses into

strengths?

Opportunities

Risks

New business opportunities

External threats and risks

For your customers in the market

For the customer (for e.g.

What can I do to make the

competition)

customer take advantage of

 How can I minimize the risks long

these opportunities?

term?

CLASSIC SALES Vs. KAM overview of the different approaches

Traditional sales approach

Key account management

Single key customer are the focus.

Sales territories and channels as well as

Distribution structure and their processes

product groups from the basis for

are aligned to these customers

organization and distribution and their

processes

Basics

Short term, revenue oriented successes

Good customer relationships and

(statements) are more important than

recurring business are in the focus

long term customer relationships

Objectives/Justification

Bottom up business. Sales management

Strong focus on top down business

provides key objectives in relation to

Sales management sets sales targets

Focus

individual customer. Sales channels

Sales channel is partially defined

(strategies) are left to the KAM.

CUSTOMER ANALYSIS key performance indicators

Number of locations

Number of employees

Solvency of the company

12

50

500,000

Investment volume

Production numbers

Annual sales

750,000

50,000

1.2 mn

Further indicators

Further indicators

Further indicators

?

?

?

KEY ACCOUNT PLAN DIMENSIONS decisions processes and market structures of customer as powermap

CEO

Competitor 2

VP Services

Director of

VP Marketing

R & D

VP Purchase

& Parts

Programmes

1

3

Vehicle Project

Chassis

Management

Lead

Competitor 1

purchasing

Vehicle Project

O

Management

Title

Title

Title

Title

Title

O

Automotive

association

Title

Title

O

Quality of the relationship

positive

neutral

poor

unknown

Decision power

high

medium

low

1

2

3

Owner of relationship influence

non-hierarchical

O

OWN COMPANY POSITION portfolio analysis to identify current and potential key accounts

Customer A

Customer C

Customer B

Customer D

Positive

Attitude

Negative

Positive = existing business contact

Negative = no business contact or existing relationship is distributed

KAM area

PERCEPTION OF CUSTOMER

Description of your position from the perspective of the customer?

What do you do for him and how good are you?

How is the size of your market share with the customer ? (share of wallet)

What kind of relationship and cooperation level have you achieved to date

with your customer? What are you aiming for in the future?

What strengths does your customer see in you? What weaknesses could

your customers see in you?

PERCEPTION OF CUSTOMER

Strategic

partnership

Development partner

Key supplier

Preferred supplier

Repeated supplier

Qualified supplier

One time supplier

Opportunistic

KEY PROJECTS profile

Customer

Project name

Probability of project

Project description

Contact (customer)

80%

Volume

2020…

2021…

2023…

Milestone/Gates

Budget

$ XX mn

Most important

1.

competitor

2.

3.

Contact (customer)

Name Project responsible

Name

BD ACCOUNT TEAM matrix organization

Management

Product field 1

Product field 2

Regional distribution 1

Regional distribution 2

Product

Product

Product

Product

Sales region 1 Sales region 2 Sales region 3 Sales region 4

management

marketing

management

marketing

KAM

KAM

KAM

KAM

KAM

Technical guidance

KAM activity

CLASSIC SALES Vs. KAM overview of the different approaches

Traditional sales approach

Key account management

Single key customer are the focus.

Sales territories and channels as well as

Distribution structure and their processes

product groups from the basis for

are aligned to these customers

organization and distribution and their

processes

Basics

Short term, revenue oriented successes

Good customer relationships and

(statements) are more important than

recurring business are in the focus

long term customer relationships

Objectives/Justification

Bottom up business. Sales management

Strong focus on top down business

provides key objectives in relation to

Sales management sets sales targets

Focus

individual customer. Sales channels

Sales channel is partially defined

(strategies) are left to the KAM.

BD KEY ACCOUNT TEAM alternative display

Core team

Name

Position

Name

Name

Contact details

Position

Position

Contact details

Contact details

Extended team

Project related

communication and interaction

Name

Name

Name

Name

Position

Position

Position

Position

Contact details

Contact details

Contact details

Contact details

MARKETING PLANNING

Measures

2020

2021

Tasks

J

F

M A M J

A S

O N D J

F M A M J

J

In-house exhibition A

Exhibition B

Workshop X

Workshop Y

Customer satisfaction

survey

Annual financial

statement

In-house exhibition C

Milestones

Workshop phase concluded

MM-DD/MM-DD

THANK YOU

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