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Characteristics of the process Selection of Strategic accounts Process & Resource allocation Competence Advanced Research

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RoleRoleIssuesIssues Role of the Strategic Account ManagerAM Supplier Customer Sales person Product seller Interface Relationship? Team player? Administration Co-ordinator Sales person Product seller Interface Relationship? Team player? Administration Co-ordinator Culture Management Support Communication Systems/Process Turf wars Authority workload/focus Credibility Culture Management Support Communication Systems/Process Turf wars Authority workload/focus Credibility Traditional Key Account Selling

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Strategic Account Manager Competences Source: A. Millman & K. Wilson, 2000 Communication skills1 Global Team leadership & Management2 Business & Financial Knowledge3 Relationship management skills4 Strategic Vision & Planning5 Problem Solving Capabilities6 Cultural Empathy7 Selling Skills8 Industry & Market Knowledge9 Customer Knowledge10 Importance Ranking 1 = Most Important 10 = Less Important Selling

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Strategic Account Manager: Competence Profile Analyst Politician Coordinator Strategist POLITICALENTREPRENEUR: Influence power Influence power Take opportunities Take opportunities The strategic account manager must have the capability to solve problems for the customer and realize entrepreneurial opportunities thru the coordination and application of personal, team and organizational competences, without having the full control over all resources. Source: D-P Gosselin, 2002

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Impact of the context on Competences Pe Relational Manager PE Potential CEO ? pe Sales pE Entrepreneur Degree of organisational Interdependence and Integration Levels of Organisational complexity H H L L P: Political E: Entrepreneurial Strategic Account Management Management Strategic Account Management Management Key Account Management Management Key Account Selling Source: SAMA, K. Wilson, 2000

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Characteristics of the process Selection of Strategic accounts Process & Resource allocation Competence Advanced Research

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Market Performance in Strategic Account Management Preliminary Research on Strategic Account Management at Ghent University, Department of Management and Organization (FEB) suggests a high probability that: Source: D.P. Gosselin, 2000 (*) Growth in % Customer Market Share and % of Company Portfolio sold to the Account 1. The market performance (*) of a supplier with a strategic customer is related to the PLC of the customer. This implies a process of dynamic allocation of resources: different relational behaviours at different times and the willingness to invest in specific and time related customers solutions using all available company competences. 2. The market performance of a supplier is higher with strategic selected customers if the supplier adjust his offer and performance according to the PLC of the customers Decision Units. 3. Market performance with strategic customers is higher if an explicit and recognized fit exists between the strategies of both the supplier and the customer.

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Case The Telecom world

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When did it all started ?

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Fast evolution: Services Customer requirements Technology Regulation Aggressive competition Strong growth Change in client/ supplier relationships Telecom Market Four concurrent trends shape(d) the Telecom Market ? Today

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Deregulation Internet Boom Demand for Broadband Content Need for differentiated Offer Bundled Services Market Drivers Market Inhibitors Infrastructure Legacy Infrastructure Legacy Financing shortage Financing shortage Cost of Licenses Cost of Licenses Critical Size 2000 2004 Main Market Trends - Customer View 3G launch

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Customers: before liberalisation

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Customers: (soon) after liberalisation

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A few trends... There are now: more and more (potential) customers in a more competitive environment. more and more (potential) customers operating on a truly global scale more and more (potential) Customers who are not tied anymore by national or regional boundaries And more and more financial difficulties

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Just an example of leveraging global branding... Vodafone now sponsor of Manchester United! 6 M fans in the UK 30 M fans in the world ! and + 100 M Customers !

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Changing customer environment One Country One Customer (PTT)

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Today: 1 country Multiple Customers

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former Matrix Focus: Product - Geographical Selling products within a country Selling products within a country Product Focus Country Focus

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Customer Refocus : Key Account Management Offering solutions to customers Offering solutions to customers Solution Focus Customer Focus Product Focus Country Focus Selling products within a country

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Key Account Management Dedicated teams assigned to major accounts: Tier 1 accounts > 100 M Euro/year Tier 2 accounts > 10 M Euro/year Tier 3 accounts = Major opportunity, Key account plan existing Prime interface with customer Prime focus on customer satisfaction Represents all of Alcatel in front of customer

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Tools

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The Key Account Plan Approval Document Sales & Order Plan 20xx + 20xy Customer Perspective & own Positioning

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Approval Document Approval Sales & Order Plan Action & Development Plan Actions and Issues Orders & Sales 20xx Unbudgeted Opportunities for 20xx Actions & Issues Orders & Sales 20xy Unbudgeted Opportunities for 20xy Customer Satisfaction Account Team

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Orders & Sales Plan For 20xx and 20xy and For each Business Division/Product Line: Customer Spend Budget: Orders/Sales Own share YTD: Orders/Sales (in EUR) Orders/Sales (in %)

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Customer Perspective & Positioning Customer Perspective Shareholder structure and business lines Financial Key Data Portfolio Analysis (BCG) Investment Trends Customer Strategy Customer SWOT Own Positioning Own Mission and Main Objectives Strategy and Tactics Own SWOT Competitors Positioning Investment Volume / Own Share Main Opportunities Objectives & strategy per product line Relationship compared to competitors Customer / KAM organization map

Slide 26 shrinking margins, uncertain business planning/pricing policy - Profitability ? - Substitution of.... - Weaknesses (internal) - Burden of high number of employees - Amount of debts restricting investments - Time-to-market (6 months too late) - etc. example

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Customer Own company Mission and Main Objectives Own Mission To become... Market share & sales goal Get 10% share of the accessible investments of Account in the next 24 months = 100 Millions EUR / year Relationship goal Improve the business relationship from vendor/credible source to solution provider level within the next 24 months Customer satisfaction goal Measure customer index and improve the index by more than 30% over the next 3 years example

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Conclusions (2) Account managers are not sales people focus on relationshipbuilding Solutions/coordination long term Entrepreneurship Limit the number of key customers! Not applicable for everyone: very expensive Key account management only possible if operations are integrated in the process ! A key account is a market on its own => Develop a customer business plan to approach and deliver in a consistent way Source: D-P Gosselin, 2002

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Conclusions (3) It takes a lot of commitment to implement a strategic account organization: time, resources, top management focus Internal communication is key (80% of success) Selection of strategic accounts: criteria! CRM is not about Strategic Account Management. A customer database software can not compensate for a bad process or strategy. Source: D-P Gosselin, 2002

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Content Concepts & Definitions Different types of Account Management Definition of Strategic Account Management Strategic Account Management Process Case Study Conclusions Summary

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Summary (1) 5-7 times more easy and cost effective to grow the existing customer base. Value of a Strategic Relationship is worth 15% price increase. Select customers on Relationship potential, strategic fit and your willigness to invest in specific competence leverage Strategic account management is a different process compared to key account management or key account selling Its nature is more strategic, interactive, dynamic, proactive and competence driven than a sales or marketing process Courtesy: D-P. Gosselin

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Summary (2) Building a customer focused organisation for competitive advantage in business markets implies to manage a customer base thru strategic account management The strategic account manager should coordinate the dynamic resource allocation and solution adjustment related to the PLC of the customer: This is a top management function. Top management should understand their role, the change impact, investments and process implications needed to introduce Strategic account management: It takes time, money, vision and leadership to succeed. Courtesy: D-P. Gosselin