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SIEMENS Professor: Victor Noguer Castellvi

Strategic Key Account Management 20th March 2013 Joana Lemos

Lena Luehmann

Mariona Prates

Cristina Vieites

Guillem Messeguer


1. Customer inputs in meetings WHAT?

Advice / Hints / Criticism

creation of new opportunities

HOW?

Depending on ‌ Relationship supplier vs partner

Phase Lead: potential leads, briefing

supplier: tender-based relationship partner: strategic cooperation

Opportunity: potential idea, outsource Bid prep: announcement of project, define technical specifications Contract negotiation: selection

SKAM13


2. KAM - the pig in the middle? EXTERNAL CONSUMERS

convince / compel to get the deal

INTERNAL ORGANIZATION

convince BU about customer’s value (esp. when re-negotiating)

‘Account Target Agreement’ (ATA) to align targets & to help secure Business Unit´s commitment SKAM13


3. Re-negotiations OPTIONS & IMPACT refuse

overall negative affect on relationship prevent further business opportunities

accept

domino effect: other customers might ask for renegotiations need to explain ‘reason why’ to BU time consuming

SKAM13


4. Program Evolution coordinate cross-business/-country activities

STEP ONE: 1990’S communication only through IT system report directly to managing board looked for deals in every geography & BU not anchored to BU’s ! KAM’s uninformed, without career path, perceived as competitors

STEP TWO

Centralized purchasing activities & request for higher secrecy

anchored to & report to BU’s downside: silo-minded ! KAMs are well connected with sales force & BU, have deep knowledge & a career path SKAM13


STEP THREE: 2004 ‘SIEMENS ONE’ new approach: centered on cross-sector collaboration & customer centricity

Further development KAM framework based on best experiences to be adopted by each sector

STEP FOUR: 2010 ADD CORPORATE LEVEL 3 levels: regional, global, corporate top-down structure Sales board MDB KAM

SKAM13


5. Key Account selection criteria DATA

INDUSTRY

SALES

(ex: customer turnover & installed equipment)

(ex: growing market/ customer in the market)

(sales potential & crossselling opportunities potential achievement time goal)

SKAM13


5. Key Account selection criteria LEVEL (international or regional)

STABILITY

FIT

(centralized decision making)

(strategy & culture)

STRUCTURE (centralized decision making)

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6.Maintaining & deselecting KA MDB RARELY HAPPENS

Reasons? “If so, it‘s because it‘s better for the customer to be served at a regional rather than international level or if business is too volatile or because we change our portfolio (as in 2011 when we sold our IT & comms business)...” SKAM13


7. Siemens Internal organization 4 SECTORS

SEVERAL DIVISIONS

CEO’S (in charge of several business units with profit & loss responsibilities)

Top-down structure Mixed teams - ex: CAM’s & RAM’s SKAM13


7. KAM profiles at Siemens REGIONAL

GLOBAL

CORPORATE

(national accounts)

(specific product portfolio)

(entire spectrum of Siemens portfolio across different sectors)

Involvement of the board “Involvement of board shows commitment to customer centricity, builds trust and provided us with their needs/ wants...”

SKAM13


8. KAM

SF relations & conflicts

COORDINATION WIDER VIEW THREAT

architects of a network of relations

help BU to see the bigger picture instead of being too focused on their own business

be the translator of the customer voice

BROAD KNOWLEDGE

know everything about the business SKAM13


9. KAM vs Sales force TARGET

Sustainable development of business with top customers Long-term (3 years)

CUSTOMER POTENTIAL SALES PROCESS

Sales results Efficient delivery Short-term (fiscal year)

1–5

5+

Relationship share of wallet

Transactions efficient pipeline management

Before customers‘ purchasing process (demand & opportunity creation & detection)

Early in customers‘ purchasing process

SKAM13


9. KAM vs Sales force CUSTOMER KNOWLEDGE

market drivers business requirements investment plans

technical requirements decision structure with focus on buying center

decisions & influencing structure

NETWORK COMPLEXITY

high number of internal & external contacts

positions: high-& lowlevel

low-medium number of contacts to be handled internally & at customer positions: medium-low-level

SKAM13


10. Involvement of the board HIGH reporting structure

in contact with top 90 accounts

“Involvement of board shows commitment to customer centricity, builds trust & provides us with the needs/wants...� SKAM13


11. Skills to be successful KAM Relating to others Managing tasks & processes

Leading others

inter-personal understanding customer service orientation initiative information seeking impact & influence organizational awareness relationship building

Managing others Thinking & solving problems

teamwork & co-operation team leadership ability to see the big picture think outside the box

SKAM13

Generic Model of Competencies & Subscales by Spencer & Spencer


12. Reward system BONUS CALCULATION order intake customer satisfaction feedback capacity to secure new strategic deals / new forms of co-operations

‌ vs. sales force: by volume by their BU

SKAM13


12. KAM’s authority/ empowerment Status Quo Official letter when appointed

Guidelines

Favorable reporting structure

relatively high authority

Further empowerment Strengthen internal understanding

P&L Responsability SKAM13


13. Empower & strengthen authority New KAM appointed

Official letter to all managers

Guideline on Manager’s role

Managing Board

Direct contact Strengthen understanding of KAM’S value Provide KAMs with P&L responsibility

Business Units Division Heads

Fast decision-making Prompt support from Executives Fully informed and invited to meetings SKAM13


14. P&L Responsability KAMs with P&L responsibilities More power inside Siemens Difficult to calculate P&L of accounts handled by KAMs Conditions of the contracts are negotiated by the sales force Usual targets of a KAM could interfere with P&L targets

KAMs should NOT be responsible of it Regional KA’s

Clients not too complex Higher authority

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15. Account Business Plan Description of the customer

CUSTOMER’S BASIC INFORMATION

BUSINESS STATUS

ACCOUNT STRATEGY & MEASURES

Analysis of the industry Customer’s SWOT analysis, and description of their strategy SWOT analysis of Siemens vis à vis the customer, Customer satisfaction - interaction description Customer’s ongoing projects Account development strategy Customer’s business not covered by us Account penetration by business unit and division List of top opportunities – action list

SKAM13


16. Role of KAM in sales process lEAD MGT

Identify/Suggest/Develop leads Help BUs to identify right contract

CONTRACT NEGOTIATION

Not involved in negotiation details Important presence in meetings though Explain importance of customer (how to take ad. risk and how to afford it)

OPPORTUNITY MGT What can be provided? Coordination BUs Set up projects’s organization Customer relations mgt

BID PREP

Advisory role Coordination internal/external activities Presence in meetings & negotiations Customer relationship mgt

SKAM13


17. Importance of CRM system CRM key strategic tool in the whole process Share information: company & sales department Categorize & organize clients Maintain & cultivate relationships Avoid redundancy Organize KAM job and relations SKAM13


18. Relationships & KAM EXTERNAL RELATIONSHIP

GENERAL RELATIONS

New start in relationship Set up workshops Grow with the customer Goal: Siemens as a partner

Few customers Long term Customer relationship network Team work

INTERNAL NETWORK

Misunderstanding of CAM’s added value Sometimes are not informed by BU Share all info Solving internal problems CAM act like role models

SKAM13


19. From quality supplier to partner EXAMPLE 1 Siemens was a sophisticated product supplier of high voltage equipment.

New relationship: new focus on turnkey solutions Today: partner Partnerships: R&D investments Future goal: real businesses -> maybe with Kratos in solar systems?

SKAM13


20. Categorizing Kratos RELATIONSHIP Kratos asked Siemens for advice: new Win-win Cross-selling and growing potential

KRATOS Leader in Europe of power utilities Several businesses Strategy: renewable energy (EU) & expand presence (outside EU) Aggressive future investment strategy; BUT reduce costs Strong financial condition

ACCOUNT Recent customer Av. annual order intake : â‚Ź500mn Top 10 energy accounts Order intake & products variations (stable in the last 2 years Account penetration 58%

SKAM13


21.

Should Balton try to convince the FPG division to revise the O&M contracts? PRO’S

CON’S

Ongoing, unclosed business deals & pipeline of Kratos would probably still cooperate with 500 projects until 2018 -> not revising the Siemens as they are an important supplier (high contract could jeopardize the relationship switching costs for Kratos) Customer is a good fit in terms of strategy -> Some other customers or other departments possible to expand together (geographically and within Kratos will ask Siemens to revise the portfolio-wise) & in line with global trends contract Should see Kratos as a global account, not tunnel vision on the affected BU; might secure further deals

Negative impact on fossil power generation division (give up current revenue) Timing – would have to announce a 9% drop in order intake at next shareholder meeting


Should Balton try to convince the FPG division to revise the O&M contracts? Conclusion: he should convince them to revise! Kratos is an important customer with a great strategic fit and high future potential SKAM13


22. If so, how should he approach the division to convince them? APPROACH Meet face-to-face 2 meetings: CEO of BU + entire BU Explaining reasons why -> be transparent Don‘t push - use good, clear arguments

ARGUMENTS Calculate estimations of pipeline project revenue Show potential of the customer Importance to the company (renewable energy, international expansion, etc.)

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23. Our overall opinion GOOD Practical implementation of Ongoing cultivation of customer customer proximity at the Managing relationships Board level

“businesses start with customers“ “if the customers grow we can grow with them“ “we want to be a trusted and sustainable partner“


Recommendations Improve internal co-operation & flow of information BU (esp. sales) & KAMs should work together more closely

Eliminate competitive perception to strengthen empowerment

Improve internal understanding of value added by each role

Further suggestions Ensure to foster promising & talented sales employees Provide training opportunities Anticipate market changes & possible implications for KAM program Develop cross-division incentive system, focusing more on the bigger picture instead of P&L targets


Joana Lemos Lena Luehmann Mariona Prates Cristina Vieites Guillem Messeguer SKAM13

Siemens  

KAM program at Siemens

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