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Key Account Management

Introduction

The development of solid long term business with a relatively few selected Key Accounts is fundamental to the success of any corporation.  Effective Key Account management is much more than an annual negotiation.

We have been working with corporations and Key Account Managers for more than 25 years to develop a strategic and comprehensive approach to the development of long term Key Account business.

An online demonstration of our Key Account Resource.

Best Practice Key Account development Modules

This work has resulted in a suite of Key Account development Modules founded on the idea of observable Best Practice. Each Module can be used independently and as part of a series.

The Modules are fully flexible and can be used by a single Key Account Manager or by the whole sales team.

They can be implemented in-house or using a local Associate Consultant.

Key Account Development: Core Modules

Strategy

Key Account Strategy considers which Key Accounts you should be working with in 2-3 years time

Key Account Profitability considers how to increase the profit generated by each Key Account over both the long and short term

Key Account Added Value Proposition considers how to secure the Key Account relationship over the long term

Management

Key Account Knowledge considers what you need to understand about the Key Account

Key Account Business Growth Planning considers how to construct a business building plan through the identification of defined growth opportunities

Key Account Management Processes considers the most effective processes and systems for effective management

Execution

Key Account Negotiation considers the approach and skills of effective Key Account negotiation

Key Account Communication considers effective one to one communications skills and approaches

Key Account Personal Organisation considers the processes, tools and skills of effective personal organisation for the Key Account Management Manager

Key Account Scorecards

We use a method of Scorecards to help Managers assess their current situation and needs

We have found that this approach reduces the need for extensive initial analysis

Scorecards exist for each Module and can be used immediately in their generic state or can be customised quickly by the management team for ongoing internal use

As an illustration, we have included the basic initial situation assessment Scorecard to help managers identify initial needs.


Key Account Case Studies

Introduction

We work with many corporations and Key Account Managers. Each month we produce a Key Account case study, generally based on a current live project.

In each case some of the details are changed to protect the identity of the company, the Managers and the customers

The case studies are used to stimulate discussion and debate in seminars and may be used by companies, universities and Associate Consultants provided the source is acknowledged and the copyright is protected.

Each Case Study presents a situation and poses one or more questions.

Contributions and answers to the questions

Contributions that raise useful points or assist the debate will be posted on the web site. Feel free to send your thoughts to us – we reserve the right to edit your contribution and acknowledge your name, role and company unless you wish to remain anonymous.

If you would like to offer your thoughts for possible publishing on the web site then send them to info@smcg.net along with your name, title and company.

Case Study 100 - January 2009 – Price cut demand

Disclaimer – this case study is intended for discussion and debate only. It makes no recommendations and the situation and views expressed are not necessarily supported by SMCG or its Consultants. No responsibility is accepted for the use of the material.

The Company operates globally and is divided into five operating regions: North America, South America, Europe, Asia, Rest of World (RoW). The company is in the industrial business to business sector and is a top ten player globally. However it has different positions in each of its regions. It is strongest in North America and Europe.

The Company measures its customers on volume. Therefore its Key Accounts for each region and country represent the largest customers (around 65% of the total business). In Quarter 4 2008 the Company conducted a detailed profitability study and implemented a model to measure Key Account profitability each month.

The Key Account relevant in this case study is number ten by volume in Europe and number two in one European country. This Key Account is significantly more profitable than the average because it requires very little management and requires few high cost support services. The relationship is long term and very positive. The business has been stable for the past five years. The Company manages its Key Accounts by region and by country – therefore there is both a regional (European) and set of country Key Account Managers for each Key Account.

In the European country where the Key Account is the second largest customer, a new Country General Manager was appointed in November 2008. The Company’s country Key Account Manager received a letter in early January 2009 signed by the new Country General Manager saying that he was giving advanced notice to all suppliers that he would required them to cut prices by “a significant amount” by the end of Quarter 1. The amount of the price cut demanded was not specified.

The Country Key Account Manager has enjoyed a very good relationship with the primary Key Account contact, the Senior Buyer, (confirmed as part of the assessment in Q4). The other contacts are the production managers in the local plants who are visited as required. The European Key Account Manger is fairly new as is the Key Account European Manager. The actual buying and the local prices are agreed at country level.

Current situation

Having received the letter, the Company Key Account Manager called the Senior Buyer. He was not able to get much more information other than the Buyer confirming that the new General Manager was making very aggressive demands throughout the company and there was concern that internal cuts and redundancies would be made.

The Key Account Manager and Buyer have agreed to meet at the end of January to review by which time the Buyer thinks he may have more information.

Question

What should the Key Account Manager do before the meeting with the Buyer?

If you would like to offer your thoughts for possible publishing on the web site then send them to info@smcg.net along with your name, title and company.

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