Rethinking Key Account Management:adapting and refining your Sales organization’s response to the new realities

2

Everybody would agree on the strategy,

even more when you know that the

Pareto principle applies here also with

20% of the customers generating

80% of the revenue/profit. However

when looking at our recent CSO

Insights’ study, execution seems

different:

Key Account Management is a

systematic process for managing key

interactions and relationships with

most valuable customers. It focuses

on the creation, implementation,

execution and evaluation of an overall

plan to guide the account team in

developing new relationships at the

C-level, aligning the best resources to

the most profitable opportunities and

delivering what was promised.

Managing the future

Most executives recognize that the real assets of a company

are embedded in the quality of the relationships between

the company and its most important stakeholders, such as

clients or customers, employees and suppliers. Developing

strategic relationships with customers should therefore be

a central issue on the CSO’s agenda moreover in current

context.

51%

More than half of the compa-nies recognize that they needimprovement in selecting keyaccounts

60%

CSO interviewed understandthey lose deals because theircompetitors have established a better relationship with theircustomer

52%

Also recognize their KeyAccount plan need improvment

The consolidation of buying power in

the B2B sector over the last decade

has increased the importance of key

account management across numer-

ous industries:

• It is long evident in the Consumer

Product Goods – witness the

co-location of 500 P&G and over

200 Johnson & Johnson personnel in

Fayetteville, Arkansas; headquarters

for Wal-Mart. This large number of

personnel is taking over the manage-

ment of competitor product cate-

gories and supply chain responsibili-

ties for their customer. There was a

time, when Wal-Mart may have four

sales people from 4 product lines,

calling on the same customer. This

manner of interaction is no longer

acceptable.

• Consider the wholesales fuel (gaso-

line) business. One large, multi-

national energy company use to work

“jobbers” or regional distributors of

fuel must now contend with whole-

salers and grocery chains who take

over a larger share of the retail fuel

market. This requires a new response

from the supplier and the industry

value chain.

• Witness the automotive industry:

- A tier 1 automotive supplier knew

they needed to improve key account

management capabilities when their

OEM customer was more knowledge-

able of their global pricing policy than

their individual account teams; the

supplier was at a significant disad-

vantage when negotiating prices that

were inconsistent by region.

- Or consider one premier tire manu-

facturer that like the fuel supplier

must now learn to sell to the likes of

Costco and major multi-country dis-

tributors in Europe.

• Not to be overlooked, emerging

market multi-nationals are now work-

ing to penetrate mature markets –

moving from undeveloped markets in

Africa, SE Asia, to mature markets in

Europe and the U.S. where they must

compete with already established key

account competitors. In these circum-

stances, it is just not technology and

low cost that wins the deal, but also

the capacity to show product devel-

opment roadmaps and ensure highly

reliable service in a complex environ-

ment where risk tolerance is zero and

where English is the first language.

These examples and the increasing

concentration of buying power in

many industries have increased the

level needed to improve key account

management practices.

3

Why Key Account Management has become increasingly

important

4

The 10 key success factors of Key

Account Management.

Accenture has identified what high

performing sales organizations are

doing to enhance business and rela-

tionships with their most important

customers:

Strategy

1. Start with a customer-based

segmentation strategy, implementing

differentiated approaches for key

accounts and other tiers. Criteria

include existing and future revenue

growth, strategic position in the

industry.

2. Align sales organization (global

versus local) and process steps with

their key customers, establish long-

term partnering agreements on an

added-value-reward sharing basis and

have intensive cooperation through

mutual knowledge sharing.

Organization

3. Align organization to the customer’s

organization, when possible: single

account leads with similar functional

heads for product, supply chain,

marketing, and operations.

4. Carefully select the “Account

Planning Team” with the right com-

plement of skills to develop robust

account plan. This is a cross-functional

team composed of dedicated and

indirect personnel.

Process

5. Define a clear process of what is

a key account, determining target

customer needs, and implementing

procedures to ensure that they receive

customer service based on total value.

6. Conduct regular key account plan

review meetings to monitor action

plan and sales results that are

integrated in company-wide review

cycles.

7. Have maintenance process to

maintain key account “power map”.

8. Have a partnership approach, joint

process and product improvements

with regular target measurement for

strategic customers.

Technology

9. Have access to a common repository

of information – the customer profile,

relationship maps, sales data, won/loss

analysis, internal organizational

charts, etc. that facilitate coordinated

communication at both tactical and

operational levels to allow for one

common message.

10. Embed your account plan in a

sales tool that is visible to all team

members. All aspects of planning-

including optimization of resources-

developed, distributed, and tracked

electronically.

What are Top performers doing?

Outside the traditional increase of

share of wallet in existing customers,

which is for many segments of the

B2B sector the primary strategy for

growth, an effective implementation

of Key Account Management requires

not only organizational and process

changes but above all a change of

mind.

1. Know your Customer

The fatal flaw made by most account

teams is not doing their homework on

the customer’s business needs, related

to their industry and their position

in this industry. Typically, account

teams are great at identifying the

opportunities to exploit with their

customers; however, few take the

time to understand the customer’s

position. This yields a shallow under-

standing of their customer that too

often is apparent in client discussions.

Operating from a deep understanding

of the customer’s business allows the

account team to conduct conversa-

tions on things other than price.

While performing an assessment of

key account planning activities at a

customer in the C&HT industry, we

were able to identify up to 13 very

specific account plans that were not

shared across the account team. All

of them had valuable customer

insights but scattered among several

documents, the account team was

not able to exploit its full value.

To address this challenge, Top

Performers define, deploy and main-

tain one “consolidated” key account

plan to gather into one single place

all strategic account information.

Moreover, it allows to share best

practices to the whole Sales Key

account team members but also to

the Top management.

2. Increase win ratesand focus on valuableopportunities

We also often hear our clients say

they can’t afford the luxury of losing

a single opportunity, even more in the

current economical context. However

this should not obscure the fact that

all the opportunities do not require

the same degree of attention. To

know which opportunity is more

important than another, we have

established a detailed approach that

through a set of critical success fac-

tors, questions, and job aides analyze

throughout the sales:

- If you are able to win this opportu-

nity,

- If you want to win this opportunity,

- If you win, will you then be able to

deliver what was promised.

Again this may sound obvious, how-

ever systematically applying this

method as early as possible in the

sales cycle has allowed some of our

customers to better anticipate next

stages. To give one example, who has

not heard this common: “let’s win this

first, and then we’ll see how we can

deliver it”. Well one of our customer

has paid the price for this. While he

was responding to an RFP that he

helped co-authored with his client,

while he offered the best technical

solution, while ... everything seemed

favorable to his victory, he lost

because he had badly prepared the

delivery phase. This phase could only

be done in partnership with two com-

panies on the market that each had

signed an exclusive agreement with

two of his competitors.

3. Build a momentum

An effective key account management

program calls for investments.

However, as the benefits have shown,

there are pay offs for these invest-

ments. Helping all companies to agree

on the gains and make the invest-

ment when both time and money

are in short supply. Nonetheless, it

remains a challenge.

A diplomatic way to enable sales

force to realize their lack of global

view of the account as well as strate-

gic alignment, hence the opportunities

they may be missing can be achieved

by organizing a Sales Bootcamp.

Bringing your best resources in the

same place to simulate an Account

Plan session and elaborating with

them the best value proposition based

on this new common understanding

of customer needs is really powerful.

This was done with many of our

customers and therefore being able

to identify in a few days new oppor-

tunities hitherto unexplored has often

been a good stimulus for sales force

adherence and willingness to change

their way of working.

5

Successfully implementing Key Account

Management

6

Given the benefits and value creation

potential, Accenture sees it as wise to

start implementing or further rollout

Key Account Management, particularly

in a transition from a difficult econo-

my to an upturn. This is the moment

of opportunity to improve the quality

of key customer relationships.

Accenture’s approach to KAM is broad,

reaching strategic, tactical and opera-

tional levels, encompassing internal

and external activities. It begins with

building a vision, strategy and defining

actionable KPI set, all of which are

aligned to the overall company

strategy. It also takes into account

the current economic situation and

recognizes that business benefits

need to be quickly realized.

In Accenture’s experience, the

rewards were to:

• increase customers intimacy and

start moving the overall customer

satisfaction index from average to

high

• improve win rate and capture rate

as well as deal profitability by up to

15% through improved opportunity

qualification and value proposition

development

• reduce companies’ competitor cus-

tomer influence through the identifi-

cation of new coaches and supporters

at C-level

• Develop a unique competitive advan-

tage through quality improvements,

innovation and faster time-to-market.

For example, our recent success

stories are:

• For an large manufacturer company,

the deployment of an industrialized

Key Account Management process

combined with rigorous key account

plan reviews helps to improve the win

and capture rate by up to two digits.

• For an international company in

electronic industry, the opportunities

qualification’s optimization, and the

shared and detailed power map docu-

mentation impact the win probability

ratio by more than 10 points.

Accenture’s approach to Key Account Management

1. Understand Customer

2. Create Plan

3. Execute Plan

4. Evaluate Performance

Vision and Strategy

Processes

Enablers

Joint Business Success

CustomerRelationship

Fig. 1: Accenture Key Account Management approach

The Accenture KAM approach is

helping companies to achieve high

performance in key account manage-

ment. With its commitment to find

the optimal solution for every unique

situation, Accenture has successfully

implemented this KAM methodology

for several clients around the world

in recent years. Putting our bench-

marking data to work helps clients

to pinpoint the areas where they

have the most potential to gain and

recommends leading practices to

shape the solution.

Accenture has developed an approach

that considers all elements leading to

successful Key Account Management

(Figure 1).

This model, which is aligned to the

generic CRM business process, includes

the vision and strategy, all relevant

processes and essential enablers.

• The vision and strategy: Account

planning driven by a consolidated,

common understanding of the

customer and vendor’s presence

at the customer.

• The processes: continuous closed

loop process integrating customer

relationship activities within account

planning at each step and including

clear Roles & Responsibilities defini-

tion for Account planning reviews.

• The enablers: crucial components to

make key account management

successful. From an organizational

point of view clear roles and responsi-

bilities have to be defined and spread

throughout the business. Employees

need to be trained in the specific

strategic account management tasks

and should have personal goals clearly

defined in order to align incentives

with strategic direction and optimize

results. From a technology point

of view standardized tools and

templates, including Organizational

Power Map have to be defined and

used.

To turn the methodology into reality,

Accenture has developed a set of

strategic Key Account Management

tools and templates based on

Accenture standard practices, pilot

projects and client experiences

(Figure 2).

7

Process

KAM Process

KAM Handbook

KAM Template guidance

Enablers

Customer Profile

Vendor Profile

Account Plan

Account Plan Workbook

Performance Dashboard

Descriptions of the key steps, Inputs and outputs and roles & responsibilities associated

with the KAM Solution

Describes how to use the enablers of KAM solution (CP, VP, AP, Workbook). Providing

clear instruction on operation procedures in daily work and R&R assignments within

the team

Explain how to complete templates and provide examples with job aids

Consolidated understanding of the Customer business, including industry environment,

organization, strategy and financial analysis (ppt format)

Consolidated view of Company engagement with the Customer including project

history, competition analysis, market share analysis and relationship analysis

(power map, ppt format)

Tactics and plans to achieve the objectives for the coming year. Aligned to multi years

strategy and based on a deep understanding of the Customer (Customer Profile and

Vendor Profile). Incorporates Budget and Market space analysis output (ppt format)

Centralized account management action plan to realize the objectives of the Account

Plan: key dimensions include market target, relationship management, competition

management (xls format)

Graphical illustration of Account KPI providing a monthly breakdown of actual against

targets to identify performance gaps (xls format)

Fig. 2: Accenture Key Account Management assets

Copyright © 2011 Accenture

All rights reserved.

Accenture, its logo, and

High Performance Delivered

are trademarks of Accenture.

About the authors

Fabrice Marque is a Senior Executive

at Accenture, leading the CRM Service

Line in France. He is responsible for

our Service Transformation offerings

at EALA level: multi-channel strategy,

customer experience design, contact

centre activities organization, etc.

He has more than 15 years of

experience within Accenture, and

has worked across various industries:

Telecom, Electronic and High-

Technologies, Public Service,

Insurance, Energy, Health…

Mahfoud Chebboub is a Senior

Manager at Accenture, leading the

CRM – KAM offering in France. He

is member of the CRM – Sales

Transformation practice with a

specialty on B2B industries.

About Accenture

Accenture is a global management

consulting, technology services and

outsourcing company, with approxi-

mately 204,000 people serving clients

in more than 120 countries.

Combining unparalleled experience,

comprehensive capabilities across all

industries and business functions, and

extensive research on the world’s

most successful companies, Accenture

collaborates with clients to help them

become high-performance businesses

and governments. The company

generated net revenues of US$21.6

billion for the fiscal year ended Aug.

31, 2010. Its home page is

www.accenture.com.

Contacts :

Fabrice Marque

fabrice.marque@accenture.com

Mahfoud Chebboub

mahfoud.chebboub@accenture.com

01.53.23.60.62