Tim royds

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Key Account Management:Key Account Management:The role of the Sales ManagerThe role of the Sales Manager

Presented by Tim RoydsPresented by Tim RoydsMA (Sales Management), Dip (Sales),MA (Sales Management), Dip (Sales), FInstSMMFInstSMM, FCIM, , FCIM,

BSc (BSc (HonsHons))



Purpose of the session…Purpose of the session…To provoke thought.To provoke thought.

To reinforce current best practice by reviewing whatTo reinforce current best practice by reviewing whatsuccessful Key Account Management focussed successful Key Account Management focussed Organisations do in the real world.Organisations do in the real world.

(Potentially) to provide further ideas about how to (Potentially) to provide further ideas about how to enhance the Key Account Management programmesenhance the Key Account Management programmesin your Organisation.in your Organisation.



What we’ll cover…What we’ll cover…Some backgroundSome background

-- Key Account Management in generalKey Account Management in general-- Some definitionsSome definitions-- Key Account Selling Key Account Selling vv Key Account ManagementKey Account Management

What makes a successful Key Account ManagerWhat makes a successful Key Account ManagerImplementing a Key Account Management Strategy Implementing a Key Account Management Strategy ––the key challenges and how to manage themthe key challenges and how to manage them

Leadership behavioursLeadership behaviours

Case Study: IT Services Ltd.Case Study: IT Services Ltd.



Numbers of UK Marketing & Sales professionalsNumbers of UK Marketing & Sales professionals

140140Other sales Other sales occupationsoccupations

9595Sales managersSales managers

766,000766,000TotalTotal2020OthersOthers1616Direct salespersonsDirect salespersons

3030Round/van Round/van salespersonssalespersons

8080TelesalesTelesales

150150Key account managersKey account managers235235Sales representativesSales representatives

000s000s

545,000545,000TotalTotal

2525OthersOthers4545Public relations professionalsPublic relations professionals

4545Market research managers/ Market research managers/ interviewersinterviewers

9090Advertising professionalsAdvertising professionals

130130Other marketing Other marketing professionalsprofessionals

210210Marketing managersMarketing managers000s000s

MarketingMarketing SalesSales

Source: MSSSB, 2006Source: MSSSB, 2006



Key Account Management: Some key drivers…Key Account Management: Some key drivers…Amount of information (Amount of information (““SuperabundanceSuperabundance””))

MarginsMargins

Integration to increase buying efficienciesIntegration to increase buying efficiencies

Cost of sales peopleCost of sales peopleSize of accounts Size of accounts

…all which has led to a fundamental change in the …all which has led to a fundamental change in the supplier / buyer relationshipsupplier / buyer relationship

Knowledge of buyers (NB CIPS)Knowledge of buyers (NB CIPS)Speed of access to informationSpeed of access to information

Supply chain management driven efficienciesSupply chain management driven efficiencies

Competition (faster, global, more intense)Competition (faster, global, more intense)



Key Account Management: A perspectiveKey Account Management: A perspective

Relatively young discipline…Relatively young discipline…-- FMCG providers recognised importance in FMCG providers recognised importance in 1970’s1970’s

-- Strategic Accounts Management Association Strategic Accounts Management Association founded 1964founded 1964

-- Most work / literature 1995 onwardsMost work / literature 1995 onwardsHigh relevance today…High relevance today…

-- Cost of acquiring new customersCost of acquiring new customers-- Increasing professionalism of BuyersIncreasing professionalism of Buyers-- Expectations of BuyersExpectations of Buyers



Key Account Management: A perspective Key Account Management: A perspective (contd.)(contd.)

“An Organization can sink from from having a poor “An Organization can sink from from having a poor strategy, and also sink if (even with a good strategy) strategy, and also sink if (even with a good strategy) it does not implement strategy effectively”it does not implement strategy effectively”

(Hamlin (Hamlin et alet al, 2001), 2001)

Key Account Management is an expensive option...Key Account Management is an expensive option...

…and it can take a significant amount of time to …and it can take a significant amount of time to recoup the investment.recoup the investment.



So what is a ‘Key Account’…?So what is a ‘Key Account’…?

“A customer in a business to business market identified “A customer in a business to business market identified by a selling company as being of strategic importance.” by a selling company as being of strategic importance.”

((MillmanMillman & Wilson, 1995)& Wilson, 1995)

“In order to receive key account status, a customer must “In order to receive key account status, a customer must have high sales potential.” have high sales potential.”

(Jobber & Lancaster, 2000)(Jobber & Lancaster, 2000)

Some key words… “…prestige”Some key words… “…prestige”“…reference value”“…reference value”“…about building loyalty”“…about building loyalty”“…organising resources”“…organising resources”

“You always know a Key Account, because it really hurts “You always know a Key Account, because it really hurts when you lose it!” when you lose it!”

(Anon)(Anon)



So what is ‘Key Account Management’?So what is ‘Key Account Management’?

“..the process of allocating and organising resources to achieve“..the process of allocating and organising resources to achieveoptimal business with a balanced portfolio of identified accountoptimal business with a balanced portfolio of identified accounts s whose business contributes or could contribute significantly or whose business contributes or could contribute significantly or critically to the achievement of corporate objectives, present ocritically to the achievement of corporate objectives, present or r future.”future.”

(Burnett, 1992)(Burnett, 1992)

““Key Account Management is a management approach adopted by Key Account Management is a management approach adopted by selling companies aimed at building a portfolio of loyal key accselling companies aimed at building a portfolio of loyal key accounts ounts by offering them, on a continuing basis, a product / service pacby offering them, on a continuing basis, a product / service package kage tailored to their individual needs.tailored to their individual needs.””

(McDonald (McDonald et alet al., 2000)., 2000)

“Key Account Management is about managing the future”“Key Account Management is about managing the future”((ChevertonCheverton, 2001), 2001)



BasicBasic(Early KAM)(Early KAM)

CoCo--operativeoperative(Mid(Mid--KAM)KAM)

InterdependentInterdependent(Partnership KAM)(Partnership KAM)

IntegratedIntegrated(Synergistic KAM)(Synergistic KAM)

After After Millman Millman & Wilson, 1995& Wilson, 1995andand

McDonald & Woodburn, 1999McDonald & Woodburn, 1999

The Relational Development ModelThe Relational Development Model

CollaborativeCollaborativeTransactionalTransactionalNature of Customer RelationshipNature of Customer RelationshipLe

vel o

f inv

olve

men

t with

cus

tom

erLe

vel o

f inv

olve

men

t with

cus

tom

er

Com

plex

Com

plex

Sim

ple

Sim

ple



Key Account Manager: Key Account Manager: The Essential Skills and QualitiesThe Essential Skills and Qualities

1.1. Intrapreneurial Intrapreneurial abilityability

Business AwarenessBusiness Awareness

Planning & Organisational SkillsPlanning & Organisational Skills

Communication SkillsCommunication Skills

Negotiation SkillsNegotiation Skills

Analytical SkillsAnalytical Skills

Selling SkillsSelling Skills

2.2.

3.3.

4.4.

5.5.

6.6.

7.7.



The Essential Skills and Qualities The Essential Skills and Qualities -- ImplicationsImplications** Selection of Key Account Managers.Selection of Key Account Managers.

** Personal Development Plans for those appointed Personal Development Plans for those appointed to the role.to the role.

** Development of appropriate competencies in Development of appropriate competencies in advance of acquiring the role.advance of acquiring the role.

(for detailed breakdown of Sales competencies see (for detailed breakdown of Sales competencies see www.www.msssbmsssb.org).org)

** Evolving to a KAM focus: “Evolving to a KAM focus: “cut deep, cut clean, cut deep, cut clean, cut quicklycut quickly”.”.

** It is not It is not thethe route for career progression; it’s one route for career progression; it’s one of several.of several.



Challenges particularly relevant to Key Account Challenges particularly relevant to Key Account Management:Management:

** Role Ambiguity and Role ClarityRole Ambiguity and Role Clarity

** Role Conflict and AuthorityRole Conflict and Authority

** Reward SystemsReward Systems

** Performance ManagementPerformance Management

** Appropriate Leadership BehavioursAppropriate Leadership Behaviours



Role Clarity Role Clarity , Role Ambiguity , Role Ambiguity , , Role Conflict Role Conflict ……

** Define KAM process and allocateDefine KAM process and allocateresponsibilitiesresponsibilities

** Provide the Key Account Manager with Provide the Key Account Manager with appropriate authority and autonomyappropriate authority and autonomy

** Align budgetary controls to the Key AccountsAlign budgetary controls to the Key Accounts

** Develop a KAM planning templateDevelop a KAM planning template



Reward and Recognition Systems that complement a Key Reward and Recognition Systems that complement a Key Account Management Strategy…Account Management Strategy…

** ““What gets measured gets doneWhat gets measured gets done” ” –– are you are you measuring short term sales or long term inputs?measuring short term sales or long term inputs?

** What reward systems are in place?What reward systems are in place?

** To what degree is teamwork recognised both To what degree is teamwork recognised both formally and informally?formally and informally?

** Measurement of customer satisfaction Measurement of customer satisfaction



Appropriate Leadership Behaviours…Appropriate Leadership Behaviours…** Transformational LeadershipTransformational Leadership

-- Foster a team approach Foster a team approach –– not ‘command and control’not ‘command and control’-- Communication & demonstration of ‘best practice’Communication & demonstration of ‘best practice’

** Direct intervention with the Key AccountDirect intervention with the Key Account-- Communicate / reinforce KAM strategy and focus’Communicate / reinforce KAM strategy and focus’-- Support implementation of the Key Account Action Support implementation of the Key Account Action PlanPlan

** Winning the support of colleagues internallyWinning the support of colleagues internally-- Subtle monitoring of Key Account Manager behavioursSubtle monitoring of Key Account Manager behaviours

-- Develop and implement strategies and tactics in orderDevelop and implement strategies and tactics in orderto win support of internal management teamsto win support of internal management teams



Case Study: IT Services Ltd.Case Study: IT Services Ltd.** Background…Background…

-- Global OrganisationGlobal Organisation

-- Observed teamObserved team

-- New UK MD brought in to accelerate sales growthNew UK MD brought in to accelerate sales growth-- …who in turn brought in a new UK Sales & Marketing …who in turn brought in a new UK Sales & Marketing DirectorDirector

** Investigation…Investigation…

-- Increasingly competitive operating environmentIncreasingly competitive operating environment

-- Identified skills & competencies requiredIdentified skills & competencies requiredo Board level operatorso Board level operatorso internal influencerso internal influencerso high ability to achieve emotional buyo high ability to achieve emotional buy--inin

Key issue: people fit the Organisation Key issue: people fit the Organisation -- not thenot theother way aroundother way around



-- intensive training programme in place (“Group intensive training programme in place (“Group University”)University”)

Case Study: IT Services Ltd. Case Study: IT Services Ltd. (contd.)(contd.)** Reassigned people to appropriate rolesReassigned people to appropriate roles

-- wrong seat but not the wrong buswrong seat but not the wrong bus

-- Gained the ‘buy in’ of allGained the ‘buy in’ of all

-- some did not fit new Organisation at allsome did not fit new Organisation at all

** Internal ‘Internal ‘roadshow’roadshow’

-- demonstrated full support of Senior demonstrated full support of Senior ManagmentManagment

** External ‘External ‘roadshow’roadshow’-- ‘Sold’ concept to Key Accounts‘Sold’ concept to Key Accounts-- Key Account Manager leads account Key Account Manager leads account –– does not sell!does not sell!



-- ‘Monday huddle’ with cascade through the management ‘Monday huddle’ with cascade through the management team Tuesday and Wednesdayteam Tuesday and Wednesday

Case Study: IT Services Ltd. Case Study: IT Services Ltd. (contd.)(contd.)** New Planning SystemNew Planning System

-- Key Account Manager responsible for maximumKey Account Manager responsible for maximumexploitation of opportunitiesexploitation of opportunities

-- ‘clinics’ during sales meetings‘clinics’ during sales meetings

** New reward systemNew reward system-- balance of both rewarding inputs and revenue balance of both rewarding inputs and revenue (charged with responsibility for P&L of Account)(charged with responsibility for P&L of Account)

“…it’s a model that works, it’s a model that’s “…it’s a model that works, it’s a model that’s sound logically… it’s not rocket science, it’s a sound logically… it’s not rocket science, it’s a

model that stacks up.”model that stacks up.”



Case Study: IT Services Ltd.Case Study: IT Services Ltd.** Timings…Timings…

-- Sales & Marketing Director appointed 1Sales & Marketing Director appointed 1stst MayMay

-- November and December performance ‘above target’November and December performance ‘above target’** Following below target performance…Following below target performance…

-- Restructured 1Restructured 1stst JulyJuly

-- Pipeline increased by 38%Pipeline increased by 38%-- Deal size approximately doubledDeal size approximately doubled



Key Learning Point…Key Learning Point…

When ‘the text books’ say it takes approximately 3 When ‘the text books’ say it takes approximately 3 years to recoup returns from having implemented a years to recoup returns from having implemented a Key Account Management strategy, this could well be Key Account Management strategy, this could well be true true –– ON AVERAGE!ON AVERAGE!

However, when Sales Management utilises the tools However, when Sales Management utilises the tools and approaches we know categorically underpin a and approaches we know categorically underpin a successful Key Account Management focus, then the successful Key Account Management focus, then the amount of profit and the time to achieve these returns amount of profit and the time to achieve these returns can be impressive.can be impressive.



““2121stst Century Sales ManagementCentury Sales Management”…”…A free quarterly eA free quarterly e--zine zine for Sales Managers for Sales Managers –– includes includes news of what’s happening in the Sales Profession + an news of what’s happening in the Sales Profession + an article of interest / relevance to Professional Sales article of interest / relevance to Professional Sales Managers. For more information…Managers. For more information…

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References:References:Burnett, K. (1992), Burnett, K. (1992), Strategic Customer AlliancesStrategic Customer Alliances. London: Pitman.. London: Pitman.

ChevertonCheverton, P. (2001). , P. (2001). Key Account Management (2Key Account Management (2ndnd Edition)Edition). London: . London: Kogan Kogan Page Limited.Page Limited.

Hamlin, B., Keep, J. & Ask, K. (2001). Hamlin, B., Keep, J. & Ask, K. (2001). Organizational Change and Development: A Organizational Change and Development: A Reflective Guide for Managers, Trainers and DevelopersReflective Guide for Managers, Trainers and Developers. Harlow: Pearson . Harlow: Pearson Education Limited.Education Limited.

Jobber, D. & Lancaster, G. (2000). Jobber, D. & Lancaster, G. (2000). Selling and Sales ManagementSelling and Sales Management (5(5thth Edition), Edition), Edinburgh: Pearson Education Limited.Edinburgh: Pearson Education Limited.

McDonald, M., Rogers, B. & Woodburn, D. (2000). McDonald, M., Rogers, B. & Woodburn, D. (2000). Key Customers. How to Key Customers. How to Manage them ProfitablyManage them Profitably. Oxford:. Oxford: ButterworthButterworth Heinemann.Heinemann.

McDonald, M. & Woodburn, D. (1999). McDonald, M. & Woodburn, D. (1999). Key Account Management Key Account Management –– Building on Building on Supplier and Buyer PerspectivesSupplier and Buyer Perspectives. Harlow: Financial Times Prentice Hall.. Harlow: Financial Times Prentice Hall.

MillmanMillman, T. & Wilson, K. (1995). From Key Account Selling to Key Accoun, T. & Wilson, K. (1995). From Key Account Selling to Key Account t Management. Management. Journal of Marketing Practice: Applied Marketing ScienceJournal of Marketing Practice: Applied Marketing Science, 1(1), 9, 1(1), 9--21.21.

Tim royds

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