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Effective Strategic Account Management

                    Matthew Alleway

                         Customer
                        Stakeholders




                         Strategic
         Customer                      Company
                          Account
         Strategy                      Strategy
                        Management




                          Internal
                         Resources
Introduction: Strategic Account Management (SAM)




                                                                consequently a
                        Used to ensure
  SAM is a strategic                        It provides a     growing number of
                         the long term
      approach                           means to develop      companies have
                       development and
   distinguishable                           and nurture      made SAM part of
                          retention of
    from account                         relationships with   their core strategy
                           strategic
    management                           major customers         for customer
                          customers.
                                                                  partnering
Effective Strategic Account Management Model
                                     1


                                What is SAM
                       8                              2

                                                 Making the
                  Risks and
                                                  business
                   failures
                                                   Case




             7                                                  3

        Planning for            Effective                 Selecting and
          strategic                                        categorising
         accounts                 SAM                       customers




                       6                             4

                 Alignment in
                                                Stages of the
                      the
                                     5           relationship
                 organisation

                                 Developing
                                relationships
What is Strategic Account Management (SAM) ?
                                     1

                                  What is
                                  SAM?
                       8                                  2
                                                     Making the
                  Risks and
                                                      business
                   failures
                                                       Case




             7                                                      3
        Planning for            Effective                     Selecting and
          strategic                                            categorising
         accounts                 SAM                           customers




                       6                                 4
                 Alignment in
                                                    Stages of the
                      the
                                                     relationship
                 organisation
                                        5

                                 Developing
                                relationships




                                    1           2   3          4        5     6   7   8
What is Strategic Account Management (SAM) ?

 SAM is a management approach adopted by selling companies aimed at
 building a portfolio of loyal strategic customers

 By offering them on a long term basis, a service/product offering tailored
 for their specific needs

 it is a progression towards a form of ‘partnership’ or alliance with major
 customers characterised by joint decision making and problem solving,
 integrated business processes and collaborative working across buyer-
 seller boundaries, described as a process of ‘relational development’.




                                 1    2     3    4    5    6     7    8
What is Strategic Account Management (SAM) ?
   SAM is not account management (many organisations frequently think they are
   doing SAM when it is in fact account management)
 Account management                        Strategic account management

 Mostly managed as business as usual       Managed for growth or change

 Coordinated overview of account           Holistic, helicopter, longer term view

 Opportunity-focused understanding         Deep understanding of customers business

 One year plan                             Three to five year complete company-owned
                                           business plans (not just a personal plan or
                                           sales and marketing plan)
 No investment or very little              Likely to require investment in line with
                                           strategy
 Works within normal organisation          Flexible, cross boundary sharing

 Requires account manager                  Requires strategic account/business manager


                                       1      2      3      4       5      6        7   8
Making the business case
                                     1

                                What is SAM
                       8                                  2
                                                     Making the
                  Risks and
                                                      business
                   failures
                                                       Case




             7                                                      3
        Planning for            Effective                     Selecting and
          strategic                                            categorising
         accounts                 SAM                           customers




                       6                                 4
                 Alignment in
                                                    Stages of the
                      the
                                                     relationship
                 organisation
                                        5

                                 Developing
                                relationships




                                    1           2   3          4        5     6   7   8
Reasons to adopt SAM

                                              Opportunities
Risk management

                                                  Ability to influence client lifetime value,
  Customer complexity – retention means           especially through solutions
  understand the customers business and
  supply chain                                    More precise innovation through co-
                                                  creation with clients

  Competitors are doing it, the client
  expect it and request it in tenders             Greater market understanding and
                                                  adaptiveness
  Clients want a standard approach
  especially from complex suppliers               Reduced costs and increased value
                                                  through better resource allocation




                                          1   2     3      4      5      6      7      8
Selecting and categorising customers
                                       1

                                  What is SAM
                         8                                  2
                                                       Making the
                    Risks and
                                                        business
                     failures
                                                         Case




               7                                                      3
          Planning for            Effective                     Selecting &
            strategic                                           categorising
           accounts                 SAM                          customers




                         6                                 4
                   Alignment in
                                                      Stages of the
                        the
                                                       relationship
                   organisation
                                          5

                                   Developing
                                  relationships




                                      1           2   3         4         5    6   7   8
Selecting and categorising customers

  The choice of strategic accounts is arguably one of the most important

  Strategic customers must be aligned to an organisations strategic vision

  Selection criteria should indentify the customer’s attractiveness in terms of
  its potential for the organisation

  Also necessary to have a good process for deselecting strategic customers

  Optimum number of strategic accounts is 20-30




                                   1     2    3    4     5    6    7    8
Strategic account portfolio


                                              Supplier’s relative business strength as seen by the customer

                                                High                                                    Low       Star customers:
Strategic customers:                                                                                              These are the
The most innovative and                                                                                           strategic customer of
important projects            High                                                                                the future and are an
                                                       1
should be developed                                                                                               Investment for
                                                                        2              5
with these customers ->                                                                                           growth
strategic investment.                                       Strategic             4           Star
                                                           customers                       customers
                                                  3
                             attractiveness
                              Key account




Status customers: These                                                                                           Streamline
are the strategic                                            6
                                                                                                                  customers:
customers of the past, the                                                                                        Customers who
relationship with these                                                                      9                    negotiate
customers is strong,                                                                                              aggressively and
                                                             Status                        Streamline   11
however the potential for                                                         10                              despite the significant
                                                  7        customers                       customers
future growth is low ->                                                                                           level of business the
proactive maintenance.                                                                                            profitability of the
                                                                  8                                               account needs to be
                                                                                                                  carefully monitored ->
                               Low                                                                                management for
                                                                                                                  cash.
                                                                 Key customer spend

                                                                        1     2        3         4       5    6     7        8
Stages of the relationship
                                      1

                                 What is SAM
                        8                                  2
                                                      Making the
                   Risks and
                                                       business
                    failures
                                                        Case




              7                                                      3
         Planning for            Effective                     Selecting and
           strategic                                            categorising
          accounts                 SAM                           customers




                        6                                 4
                  Alignment in
                                                     Stages of the
                       the
                                                      relationship
                  organisation
                                         5

                                  Developing
                                 relationships




                                     1           2   3          4        5     6   7   8
Stages of the relationship


                                                                                                                                                           Goal
              Simple, transactional relationship                                                                                               Interdependent relationships

                                                                                                                                       Selling company
                                                                                                                                       Selling Company                           Buying company
                                                                                                                                                                                Buying Company
              Selling Company
              Selling company                                                            Buying company
                                                                                       Buying Company
                                                                                                                                                       Directors    Directors

                                                                                                                                                       Finance      Finance
                                          Sales &ma rketing
                            Op erations
Di rections




                                                                               Purchasing



                                                                                            Op erations
                                                                                                                                                       Service      Service




                                                                                                                     Di rections
                                                                                                                                       Strategic
                 Fi nance




                                                                                                                                                                                    Key



                                                                                                          Fi nance
                                                                         Key
                                                              SAM   Customer                                                           Account                                      Customer
                                                                     Contact
                                                                                                                                       Manager         Operations   Operations      Contact

                                                                                                                                                       Marketing    Marketing
                                                                                                                                                       Sales        Sales




                                                                                                                     1             2     3         4         5      6         7       8
Developing relationships
                                       1

                                  What is SAM
                         8                                  2
                                                       Making the
                    Risks and
                                                        business
                     failures
                                                         Case




               7                                                      3
          Planning for            Effective                     Selecting and
            strategic                                            categorising
           accounts                 SAM                           customers




                         6                                 4
                   Alignment in
                                                      Stages of the
                        the
                                                       relationship
                   organisation
                                          5

                                   Developing
                                  relationships




                                      1           2   3          4        5     6   7   8
Developing relationships
Most important attributes are trust and
integrity                                          Senior management
The main task is developing effective
business relationships with senior customer
                                                   Middle management
decision makers and influencers – Per IBM
the most important aspect
The stronger the relationship, the less           Operations transactions
threats will apply – Per IBM key to their
success during recession
Relationship development can be achieved
by mapping the people inside the customer
                                                                      Xerox stated “It is vital to
who matter, and deciding with whom you                                identify one’s friends and
want to have a relationship with                                      enemies, the decision-
                                                                      makers and influencers,
                                                                      and the customer’s
                                                                      priorities”.



                                     1        2    3         4         5      6       7       8
Developing relationships
                 Tribal                                                Tribal Resources
                 Customer




                                                                    Sa r ah At ki ns o n




                                                                                                                                         Ph y l lis Sh e l ton
                                                                                           We n d y Cl ar k



                                                                                                                  De r ek Fe l ton




                                                                                                                                                                     Ph i l Co l lins
                                    Sw i nd e l ls



                                                     Ki ng s l ey
                                                     Ma n n i ng
                                    Ma t the w
    Anti-
    Sponsor
                                       0               0
                Elisabeth Buggins
                                       0               0
                 Ian Cummings
                                       0               0            3
                 Peter Spilsbury
                                                                    4
                   Paul Taylor
                                                                    3                                                                    2
                  Peter Blythin
     Sponsor/
    Champion                                                                                                      4
                  Aamon Kelly
                                                                                           4                                                                         5
                   Steve Allan

                 Relationship Strength on scale 0 to 5
                 Relationship owner denoted by
                                                             1            2                3                  4                      5                           6                      7   8
Alignment in the organisation
                                       1

                                  What is SAM
                         8                                  2
                                                       Making the
                    Risks and
                                                        business
                     failures
                                                         Case




               7                                                      3
          Planning for            Effective                     Selecting and
            strategic                                            categorising
           accounts                 SAM                           customers




                         6                                 4
                   Alignment in
                                                      Stages of the
                        the
                                                       relationship
                   organisation
                                          5

                                   Developing
                                  relationships




                                      1           2   3          4        5     6   7   8
Alignment in the organisation
Organisation Commitment
   Relationships outside of the organisation depend on the quality of relationships
   within it
   Many of the benefits result from crossing boundaries, whether they are internal
   or external in the customer organisation


Role of the strategic account manager
   Strategic account manager entails the role of ‘orchestrating’ the firm’s resources

Transition to SAM
   Use metrics to measure the success of the SAM program.
   SAM is a marathon and not a sprint and firms should plan their SAM
   implementation around the three important areas of change activity: 1. strategy
   and planning, 2. organisation and culture, 3. process.



                                      1    2     3     4    5     6     7    8
Alignment in the organisation
                                                                                 1 2 R ev isio n        ‘Th e way w e d o
  H igh
                                                                                                        thin gs ’


                                                                                 1 1 Fu ll
                                                                                 in tegr atio n


                                                                                 1 0 B eco m in g
                                                                                 key cu s tom er
                                                                                                                      BEST -
                                                                                 cen tric                             PRA C TIC E
                                                                                                                      SAM

                                                           9 Eval uati on
                                                                                                                                    Transitioning
                                                           8 Ge arin g u p                                D                         Change to
                                                                                                    O PT IM I SIN G
                                  6 R evie w SAM                                                    SAM                             SAM
                                  in tro du ctio n         7 R ed efin ing


          3 M akin g th e cas e   5 R oll ou t
          fo r SAM

                                  4 C apa bi lity                                        C
          2 U nd e rsta nd in g                                                     EM BED D ED
                                  b ui ldin g
                                                                                       SA M
          th e sco pe


          1 Aw aren e ss

                                              B
                    A                 I N TRO D U C IN G
               SCOPING SAM                  SAM


                                                                             1         2            3           4              5     6   7    8
Alignment in the organisation

 Knowledge management
   Firms with the most effective SAM make information management at the
   customer level a core competence
   Moving to a knowledge management approach has benefits for both the company
   and the client.
       For the company, client knowledge is retained and this is where an IT solution for
       account management is required.
       For the client they get the extra value of deeper knowledge from the supplier by mixing
       with like minded experts.




                                         1     2     3      4     5     6      7     8
Planning for strategic accounts
                                       1

                                  What is SAM
                         8                                  2
                                                       Making the
                    Risks and
                                                        business
                     failures
                                                         Case




               7                                                      3
          Planning for            Effective                     Selecting and
            strategic                                            categorising
           accounts                 SAM                           customers




                         6                                 4
                   Alignment in
                                                      Stages of the
                        the
                                                       relationship
                   organisation
                                          5

                                   Developing
                                  relationships




                                      1           2   3          4        5     6   7   8
Planning for strategic accounts
    Best practice companies adopt a collaborative approach with the customer,
    developing long term plans ‘for’, and together with, their strategic accounts
        IBM, ‘3’ Compass all suggested “developing an effective joint account plan with the
        customer is critical to ensuring relationship lock-in, uncovering new business
        development opportunities and driving rapid implementation
        3M found that that short, sharp account business plans that “live” are best


    Strategic marketing planning should in turn relate to the corporate strategic plan

    Organisations that invest resources in detailed analysis of the needs and
    processes of their strategic accounts perform much better in building long term
    profitable relationships
        The underpinnings of it all is really having a deep understanding of the customer, not
        just the power politics, but what their marketplace is and where it is going, so that you
        can genuinely add value



                                         1     2      3      4     5      6     7      8
Planning for strategic accounts
                                           1. Relationship overviews/Executive summary
                                         Current initiatives with the
      Current performance analysis                                                   Financial targets             Planning assumptions
                                             strategic account



                                                     2. Strategic account overview
         Strategic accounts business environment (sector analysis, competitive situation, major challenges, strategic account SWOT
                                                                 analysis)



                                                       3. Objectives and strategy
          Indentify and prioritise the key           Its position on the customer portfolio
                                                                                                                Top-level strategy
        opportunities with strategic account                          matrix



                                                          4. Customer alignment
      Customers critical success factors (CSF) and supplier relative
                                                                                           Strategies to manage the relationship
                              performance



                                                      5. Relationship management

                     Customers decision-making unit                              Contact mapping (who talks to whom, state of relationship)




                                                          6. Implementation plan
                  Detailed tactics                                      Budget                               Risks and contingencies


                                                                 1               2          3            4        5          6          7     8
Risks and failures
                                        1

                                   What is SAM
                          8                                  2
                                                        Making the
                     Risks and
                                                         business
                      failures
                                                          Case




                7                                                      3
           Planning for            Effective                     Selecting and
             strategic                                            categorising
            accounts                 SAM                           customers




                          6                                 4
                    Alignment in
                                                       Stages of the
                         the
                                                        relationship
                    organisation
                                           5

                                    Developing
                                   relationships




                                       1           2   3          4        5     6   7   8
Risks and failures

1. Relationships must be reciprocated and appropriate
      Common mistake is to assume that the customer want to have close, partnered
      relationships with their suppliers
      Many companies do not do business on this basis at all; instead their purchasing
      professionals reduce all supply decisions down to transactions based on trading off
      quality with price, and flexing market power to obtain the best result.


2. Large customers are not always the best customers
      Assumption that the biggest revenue earners are the most profitable is false, and that
      great care must therefore be taken to before committing substantial resources to large
      companies who demand great service at lower cost.
      Research has found that often the most profitable customers are often just below
      those that generate the largest revenue.
      Important to stay close to strategic customers but reaching out to other customer
      groups to reduce dependency on a few, and being locked into long term low
      performance with unattractive customers.


                                       1      2     3      4     5     6      7     8
Risks and failures

3. Misreading customer loyalty
      if the supplier links their future strategy to the success of its customer, it creates a
      strong dependency and consequently a risk on the customers future success or
      failure.
      This is with the added risk of a customer switching to another supplier, which can often
      be part of the of the customers strategy.
      Therefore it is important not to be over reliant on one customer and avoid the critical
      error of believing that customer is a loyal partner.




                                        1      2     3     4      5     6      7     8
Benefits Strategic Account Management

1. Strategic Account Management -> Take account management to
   next level

2. Customers -> Service for life
      Build long term strategic relationships with customers
      Retention of strategic customers - more cost effective to retain customers
      Spot new opportunities and generate new business
      Increased consultancy provides the hook for increased downstream activities


3. Internal Integration / Consolidation
      Break down internal boundaries and reduce silos
      Use as part of a Company standard to manage consultancy client
      relationships with major customers
      Effectively manage and focus resources aligned to Company strategy

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Strategic Account Management Presentation

  • 1. Effective Strategic Account Management Matthew Alleway Customer Stakeholders Strategic Customer Company Account Strategy Strategy Management Internal Resources
  • 2. Introduction: Strategic Account Management (SAM) consequently a Used to ensure SAM is a strategic It provides a growing number of the long term approach means to develop companies have development and distinguishable and nurture made SAM part of retention of from account relationships with their core strategy strategic management major customers for customer customers. partnering
  • 3. Effective Strategic Account Management Model 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the 5 relationship organisation Developing relationships
  • 4. What is Strategic Account Management (SAM) ? 1 What is SAM? 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 5. What is Strategic Account Management (SAM) ? SAM is a management approach adopted by selling companies aimed at building a portfolio of loyal strategic customers By offering them on a long term basis, a service/product offering tailored for their specific needs it is a progression towards a form of ‘partnership’ or alliance with major customers characterised by joint decision making and problem solving, integrated business processes and collaborative working across buyer- seller boundaries, described as a process of ‘relational development’. 1 2 3 4 5 6 7 8
  • 6. What is Strategic Account Management (SAM) ? SAM is not account management (many organisations frequently think they are doing SAM when it is in fact account management) Account management Strategic account management Mostly managed as business as usual Managed for growth or change Coordinated overview of account Holistic, helicopter, longer term view Opportunity-focused understanding Deep understanding of customers business One year plan Three to five year complete company-owned business plans (not just a personal plan or sales and marketing plan) No investment or very little Likely to require investment in line with strategy Works within normal organisation Flexible, cross boundary sharing Requires account manager Requires strategic account/business manager 1 2 3 4 5 6 7 8
  • 7. Making the business case 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 8. Reasons to adopt SAM Opportunities Risk management Ability to influence client lifetime value, Customer complexity – retention means especially through solutions understand the customers business and supply chain More precise innovation through co- creation with clients Competitors are doing it, the client expect it and request it in tenders Greater market understanding and adaptiveness Clients want a standard approach especially from complex suppliers Reduced costs and increased value through better resource allocation 1 2 3 4 5 6 7 8
  • 9. Selecting and categorising customers 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting & strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 10. Selecting and categorising customers The choice of strategic accounts is arguably one of the most important Strategic customers must be aligned to an organisations strategic vision Selection criteria should indentify the customer’s attractiveness in terms of its potential for the organisation Also necessary to have a good process for deselecting strategic customers Optimum number of strategic accounts is 20-30 1 2 3 4 5 6 7 8
  • 11. Strategic account portfolio Supplier’s relative business strength as seen by the customer High Low Star customers: Strategic customers: These are the The most innovative and strategic customer of important projects High the future and are an 1 should be developed Investment for 2 5 with these customers -> growth strategic investment. Strategic 4 Star customers customers 3 attractiveness Key account Status customers: These Streamline are the strategic 6 customers: customers of the past, the Customers who relationship with these 9 negotiate customers is strong, aggressively and Status Streamline 11 however the potential for 10 despite the significant 7 customers customers future growth is low -> level of business the proactive maintenance. profitability of the 8 account needs to be carefully monitored -> Low management for cash. Key customer spend 1 2 3 4 5 6 7 8
  • 12. Stages of the relationship 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 13. Stages of the relationship Goal Simple, transactional relationship Interdependent relationships Selling company Selling Company Buying company Buying Company Selling Company Selling company Buying company Buying Company Directors Directors Finance Finance Sales &ma rketing Op erations Di rections Purchasing Op erations Service Service Di rections Strategic Fi nance Key Fi nance Key SAM Customer Account Customer Contact Manager Operations Operations Contact Marketing Marketing Sales Sales 1 2 3 4 5 6 7 8
  • 14. Developing relationships 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 15. Developing relationships Most important attributes are trust and integrity Senior management The main task is developing effective business relationships with senior customer Middle management decision makers and influencers – Per IBM the most important aspect The stronger the relationship, the less Operations transactions threats will apply – Per IBM key to their success during recession Relationship development can be achieved by mapping the people inside the customer Xerox stated “It is vital to who matter, and deciding with whom you identify one’s friends and want to have a relationship with enemies, the decision- makers and influencers, and the customer’s priorities”. 1 2 3 4 5 6 7 8
  • 16. Developing relationships Tribal Tribal Resources Customer Sa r ah At ki ns o n Ph y l lis Sh e l ton We n d y Cl ar k De r ek Fe l ton Ph i l Co l lins Sw i nd e l ls Ki ng s l ey Ma n n i ng Ma t the w Anti- Sponsor 0 0 Elisabeth Buggins 0 0 Ian Cummings 0 0 3 Peter Spilsbury 4 Paul Taylor 3 2 Peter Blythin Sponsor/ Champion 4 Aamon Kelly 4 5 Steve Allan Relationship Strength on scale 0 to 5 Relationship owner denoted by 1 2 3 4 5 6 7 8
  • 17. Alignment in the organisation 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 18. Alignment in the organisation Organisation Commitment Relationships outside of the organisation depend on the quality of relationships within it Many of the benefits result from crossing boundaries, whether they are internal or external in the customer organisation Role of the strategic account manager Strategic account manager entails the role of ‘orchestrating’ the firm’s resources Transition to SAM Use metrics to measure the success of the SAM program. SAM is a marathon and not a sprint and firms should plan their SAM implementation around the three important areas of change activity: 1. strategy and planning, 2. organisation and culture, 3. process. 1 2 3 4 5 6 7 8
  • 19. Alignment in the organisation 1 2 R ev isio n ‘Th e way w e d o H igh thin gs ’ 1 1 Fu ll in tegr atio n 1 0 B eco m in g key cu s tom er BEST - cen tric PRA C TIC E SAM 9 Eval uati on Transitioning 8 Ge arin g u p D Change to O PT IM I SIN G 6 R evie w SAM SAM SAM in tro du ctio n 7 R ed efin ing 3 M akin g th e cas e 5 R oll ou t fo r SAM 4 C apa bi lity C 2 U nd e rsta nd in g EM BED D ED b ui ldin g SA M th e sco pe 1 Aw aren e ss B A I N TRO D U C IN G SCOPING SAM SAM 1 2 3 4 5 6 7 8
  • 20. Alignment in the organisation Knowledge management Firms with the most effective SAM make information management at the customer level a core competence Moving to a knowledge management approach has benefits for both the company and the client. For the company, client knowledge is retained and this is where an IT solution for account management is required. For the client they get the extra value of deeper knowledge from the supplier by mixing with like minded experts. 1 2 3 4 5 6 7 8
  • 21. Planning for strategic accounts 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 22. Planning for strategic accounts Best practice companies adopt a collaborative approach with the customer, developing long term plans ‘for’, and together with, their strategic accounts IBM, ‘3’ Compass all suggested “developing an effective joint account plan with the customer is critical to ensuring relationship lock-in, uncovering new business development opportunities and driving rapid implementation 3M found that that short, sharp account business plans that “live” are best Strategic marketing planning should in turn relate to the corporate strategic plan Organisations that invest resources in detailed analysis of the needs and processes of their strategic accounts perform much better in building long term profitable relationships The underpinnings of it all is really having a deep understanding of the customer, not just the power politics, but what their marketplace is and where it is going, so that you can genuinely add value 1 2 3 4 5 6 7 8
  • 23. Planning for strategic accounts 1. Relationship overviews/Executive summary Current initiatives with the Current performance analysis Financial targets Planning assumptions strategic account 2. Strategic account overview Strategic accounts business environment (sector analysis, competitive situation, major challenges, strategic account SWOT analysis) 3. Objectives and strategy Indentify and prioritise the key Its position on the customer portfolio Top-level strategy opportunities with strategic account matrix 4. Customer alignment Customers critical success factors (CSF) and supplier relative Strategies to manage the relationship performance 5. Relationship management Customers decision-making unit Contact mapping (who talks to whom, state of relationship) 6. Implementation plan Detailed tactics Budget Risks and contingencies 1 2 3 4 5 6 7 8
  • 24. Risks and failures 1 What is SAM 8 2 Making the Risks and business failures Case 7 3 Planning for Effective Selecting and strategic categorising accounts SAM customers 6 4 Alignment in Stages of the the relationship organisation 5 Developing relationships 1 2 3 4 5 6 7 8
  • 25. Risks and failures 1. Relationships must be reciprocated and appropriate Common mistake is to assume that the customer want to have close, partnered relationships with their suppliers Many companies do not do business on this basis at all; instead their purchasing professionals reduce all supply decisions down to transactions based on trading off quality with price, and flexing market power to obtain the best result. 2. Large customers are not always the best customers Assumption that the biggest revenue earners are the most profitable is false, and that great care must therefore be taken to before committing substantial resources to large companies who demand great service at lower cost. Research has found that often the most profitable customers are often just below those that generate the largest revenue. Important to stay close to strategic customers but reaching out to other customer groups to reduce dependency on a few, and being locked into long term low performance with unattractive customers. 1 2 3 4 5 6 7 8
  • 26. Risks and failures 3. Misreading customer loyalty if the supplier links their future strategy to the success of its customer, it creates a strong dependency and consequently a risk on the customers future success or failure. This is with the added risk of a customer switching to another supplier, which can often be part of the of the customers strategy. Therefore it is important not to be over reliant on one customer and avoid the critical error of believing that customer is a loyal partner. 1 2 3 4 5 6 7 8
  • 27. Benefits Strategic Account Management 1. Strategic Account Management -> Take account management to next level 2. Customers -> Service for life Build long term strategic relationships with customers Retention of strategic customers - more cost effective to retain customers Spot new opportunities and generate new business Increased consultancy provides the hook for increased downstream activities 3. Internal Integration / Consolidation Break down internal boundaries and reduce silos Use as part of a Company standard to manage consultancy client relationships with major customers Effectively manage and focus resources aligned to Company strategy