First, a note to all the loyal readers of this blog, about 30 by now:). I have been abscent for a few weeks, and for that I am sorry. To my surprise, I received some inquiries about future posts. With no further delay, here is part 2.a) of Major accounts management & strategy:
CONGRUENCE MODEL FOR KEY ACCOUNT MANAGEMENT
Effective key account management requires consideration of several complex elements in an overall management process. Consideration must be given to several interconnected building blocks that I term the key account congruence model.
- Organization of Key Accounts
- Human Resources
- Systems and Processes
Successful implementation of this model will be achieved only if senior corporate executives fully understand the issues involved in key account management and are prepared to put in place the organizational, technological, financial, and human resources necessary to manage the firm’s key accounts on a long-run basis.
I have personally witnessed on more than one occasion SMB suffer in acquiring and managing major accounts, because senior management failed to understand their roles in the success of the model.
Today, I will share my thoughts on the strategy, as a key point of the congruence model.
The following four major points are necessary to the success of the congruence model management must make sure are in place. They are what I refer to as KPIs, or key performance indicators, which if measured properly, will form the basis of a successful strategic plan.
- Defining Key Accounts Values:
- Identify target clients and corresponding profits they represent to your organization.
- Develop factual understanding of what the most profitable customers expect and value from company.
- Identify which of these expectations impact their decisions to partner with organization.
- Formulate and quantify how key accounts rate your company’s performance versus its competitors.
2. Designing Key Accounts Experience:
- Thoroughly understand the experiences your best customers currently have with your company.
- Identify the critical touch points which make up the customer’s experience touchline.
- Design new service experiences that will deliver your company’s promise in a way that is consistent, differentiated, and valuable to targeted key accounts.
- Identify specific team members’ behavior required to deliver the key account promise at each point.
- Develop fully integrated and comprehensive change strategy to implement the new relationship and assure success.
3. Equipping People and Delivering Experience:
- Develop internal communication plans to build commitment, understanding, and clarity around the implementation of the new relationship.
- Assure that leaders/managers at all levels understand their roles and champion the key account experiences.
- Prepare all team members with the skills and knowledge required to deliver the key account experience.
- Be proactive in improving people, processes, and services to deliver the key account experience.
4. Sustaining and Enhancing Performance:
- Develop systems to continually collect customer and employee feedback and how it can improve the relationship.
- Implement a balanced set of performance metrics that provide executives on both sides with objectives, timely feedback, and how ENSR measures against its promises.
- Have a reliable, effective training program that continually builds capabilities to deliver customer experience.
Because of the increasing importance of key accounts to your firm’s longterm success, management must make critical resource allocation decisions around KAM. At a fundamental level, it must decide on the level of corporate commitment to key accounts in general, on a vision for the key account program as a whole, and on the types of key account relationships it wishes to develop. More specifically, it must identify specific criteria and selection processes for choosing key accounts, considering both current and potential revenue and profit streams, and other important issues. Both in making critical key account selection decisions and for allocating resources among its key accounts, a variety of portfolio approaches may provide significant managerial guidance.
Potentially useful criteria that can be used in the key account selection process are grouped into two major categories—direct sales revenue and profit, organizational interrelationships.
1. Direct sales revenue and profits
- Current Sales Revenue.
- Current Profits.
- Future Sales Volume and Profit.
- Financial Security.
2. Organizational interrelationships
- Coherence with Firm Strategy.
- Cultural Fit.
- Your company valued by potential customers