Frameworks for putting KAM into action Dublin Institute of Technology 2nd November 2017 Professionalising Key Account Management

Frameworks for putting KAM into action Diagnostics Key account readiness, KAM programme progress and risk Tools Customer analysis and strategic account plans Processes Implementation processes for key accounts

Customer readiness for KAM When? Before you embark on KAM or if you have ‘corporate wobble’ Are your most important customers … Answers 1. Communicating opportunities and initiatives and involving you in their strategies? Yes/No 2. Expecting an understanding of their business: inviting you to meet a wider range of people in their organization and giving a broad range of information about their business and marketplace? 3. Wanting to explore joint projects involving more commitment? 4. Wanting to talk longer term and develop strategies together? 5. Asking for a more senior account manager with more authority and/or competence? 6. Wanting a transparent or integrated approach and a single point of contact, dealing with them as a single entity? Yes to 2 or more of these questions for 2 or more of your top 10 customers indicates a need for KAM – not for all customers, but your company needs to offer it.

Transitioning to KAM: where you are on the journey When? After you have started KAM and need to know where you are and what to do next To make sure you are still moving forwards – check at different times If you need to explore and reconcile divergent views on progress and expectations

Typical results, ‘quick and dirty’ audit

Key account portfolio When? To select your key accounts, ideally before KAM but probably second stage To agree overall strategies/approaches to key accounts, especially internally Determine resources applied to each key account Agree outcomes expected from each key account

Scoring customers on the account attractiveness axis Account attractiveness criteria

Key customers scoring you against their CSFs Customer must select criteria, NOT supplier – therefore each will be different Assess v best competitor – what’s the point of being judged against the worst? They wouldn’t use them anyway. Gain scores against specific competitors, industry ‘average’ is meaningless Might be tough to hear, but provides gold mine of info on what to do.

Management tool as well as diagnostic

Assessing key customer riskiness When? You have to make decisions about how to respond to a customer, what action to take To help you to understand, manage and reduce risk To build into your calculations of the account’s longer-term value The company needs to evaluate and manage the risk attached to its investments in customers, and its overall financial position Risk index

How do you measure account risk? Consider all the 5 potential risk areas and apply the ones that are common across your business and most influential in affecting riskiness Don’t bother with things like financial stability that don’t apply to any key customers – have you really selected any key customers who are not financially stable?

Risk and return for key customers Adding to shareholder value Line of acceptable risk/return Level of return received Any strategy below the line destroys shareholder value Zero risk rate of return Specific risk of customer Relative customer risk

Analysis & business strategy development: tools and process When? You need to understand a new key customer At least annually, when you are developing tailored strategies and value propositions To assess the value of the customer to your company Customer’s SWOT & strategies Environment & market analysis Customer’s opportunities & threats Customer’s value chain analysis Customer’s strengths & weaknesses All about the customer

Linking customer understanding to your strategies Environment & market analysis Customer’s opportunities & threats Customer’s value chain analysis Customer’s strengths & weaknesses Your value chain analysis Your strengths & weaknesses Your SWOT & strategies Environment analysis Your company Your opportunities & threats Customer’s SWOT & strategies Key customer

Generating strategies from SWOTs Helps generate customer-specific strategies Need to match strength of strategies with ambition and customer potential Broadly, offensive strategies develop business, defensive prevent business loss Generate lots, commit to manageable number Nine-box SWOT Capture strategies/VPs in a customer-specific plan, using a standard plan format

Understanding how your company works for key accounts – or not! When? Getting key customer-specific decisions implemented is difficult or inconsistent Key customers are asking your company to do something new for them Other functions are not on board with delivering tailored offers You need to speed up or cut costs You may have great processes normally, still not good at delivering variants for key accounts Ultimately, key accounts will judge by what you deliver, bit what you promised!

Questions for you Does your company have a formal, meaningful process for plan approval? Dies your company have a process for aligning and combining key account plans with your company’s annual business plan?