HOW TO WIN IN KEY ACCOUNT MANAGEMENT Experiences of a scarred KAM
© Jan Lind 2017
Förlag: BoD – Books on Demand, Stockholm, Sverige Tryck: BoD – Books on Demand, Norderstedt, Tyskland ISBN: 978-91-7699-408-5
Contents ACKNOWLEDGEMENTS INTRODUCTION THE STRUCTURE OF THIS BOOK
ANALYZE....................................................................................................... 3
INFORMATION ABOUT THE CUSTOMER FROM ALL DEPARTMENTS ......................................... 4 INFORMATION ABOUT YOUR OWN BUSINESS FROM ALL DEPARTMENTS ............................... 8 MATCHING STRENGTHS AND WEAKNESSES ........................................................................... 12 STRATEGIC IMPORTANCE OF YOUR PRODUCT IN YOUR CUSTOMERS STRATEGY ................ 16 NEEDS ANALYSIS. WHAT ARE THE REAL NEEDS?................................................................... 20 WHERE AND HOW TO FIND INFORMATION ............................................................................. 23 FIND THE FACTS.......................................................................................................................... 25 ANALYZE ORGANIZATION .......................................................................................................... 27 HIDDEN DECISION MAKERS ....................................................................................................... 28 COMPETITION ANALYSIS ............................................................................................................ 29 WORK WITH THE CUSTOMERS CUSTOMER AS WELL .............................................................. 32 NEEDS / OFFER — MATCHING .................................................................................................. 33 KNOWLEDGE IS POWER ............................................................................................................. 34 WIN BY ANALYSIS - A SUMMARY OF THE CHAPTER ................................................................ 35
PLAN..............................................................................................................37
PROJECT LIST WITH WHAT, WHEN AND WHO ...................................................................... 37 KEY ACCOUNT PLAN .................................................................................................................. 40 CONTENT IN A KEY ACCOUNT PLAN ........................................................................................ 41 FORECASTING .............................................................................................................................. 44 WIN BY PLANNING - A SUMMARY OF THE CHAPTER............................................................... 46
INFLUENCE.................................................................................................49
THE FOCAL POINT ...................................................................................................................... 49 THE MEDIATOR ROLE ................................................................................................................. 50 INFORMATION BETWEEN CUSTOMER DEPARTMENTS ........................................................... 54 RELATIONSHIPS AT ALL LEVELS ................................................................................................ 55 TOP MANAGEMENT MEETINGS?................................................................................................ 57 TRUSTED ADVISOR ...................................................................................................................... 59 BUILD RELATIONSHIPS ............................................................................................................... 60 BE HONEST ................................................................................................................................... 63 DON’ T SPEAK NEGATIVELY ABOUT THE COMPETITION......................................................... 66 WHAT IF YOU CAN’T HELP THE CUSTOMER WITH YOUR OWN SOLUTIONS? ....................... 67 WIN BY INFLUENCE - A SUMMARY OF THE CHAPTER ............................................................. 69
KEY ACCOUNT SELLING IS PROJECT MANAGEMENT .......... 71
PROJECT LIST WITH WHAT, WHEN AND WHO ...................................................................... 71 CUSTOMER RELATIONSHIP MANAGEMENT, CRM ................................................................. 72 GIVE IT ALL AT THE FIRST PROJECT, AND CONTINUE THAT WAY .......................................... 73 WIN BY MANAGING PROJECTS - A SUMMARY OF THE CHAPTER ............................................ 74
TEAM WORK.............................................................................................. 77
DIRECT REPORTS ......................................................................................................................... 78 MOTIVATION ................................................................................................................................ 79 VIRTUAL SALES TEAM ................................................................................................................ 81 COORDINATE A SALES TEAM ..................................................................................................... 82 COMPENSATION ........................................................................................................................... 84 HOW TO GET OTHER PEOPLE ON YOUR TEAM ......................................................................... 87 WIN BY TEAM WORK - A SUMMARY OF THE CHAPTER ........................................................... 89
LOCAL AND GLOBAL ............................................................................ 91
CULTURAL CONSIDERATIONS .................................................................................................... 91 DIFFICULT TO GET IN AT THE HEADQUARTERS?..................................................................... 92 CONTACTS MOVE BETWEEN COUNTRIES .................................................................................. 94 A LONG TRIP IS OFTEN WORTH IT ............................................................................................. 94 TRAVELING TOGETHER WITH THE CUSTOMER IS GOLD......................................................... 96 WIN BY BALANCING LOCAL AND GLOBAL - A SUMMARY OF THE CHAPTER ......................... 96
PARTNERSHIP .......................................................................................... 99
SHARING FORECASTS AND ACTUAL PRODUCTION VOLUMES .............................................. 101 SHARING MARKET AND SALES DATA ...................................................................................... 101 SHARING RESEARCH AND DEVELOPMENT ACTIVITIES AND PLANS.................................... 102 REGULAR HIGH LEVEL MEETINGS TO ENSURE THE PARTNERSHIP IS ON TRACK ............. 103 DEFINED HIGH LEVEL CONTACTS IN EACH KEY AREA AT BOTH COMPANIES .................... 103 A HIGH LEVEL SPONSOR AT BOTH COMPANIES..................................................................... 104 TASK FORCE CAPACITY TO SOLVE PROBLEMS FAST ............................................................. 105 A LONG TERM RELATIONSHIP ................................................................................................. 105 COMPLEMENTING CAPABILITIES ............................................................................................ 105 A LIST OF COOPERATION PROJECTS ....................................................................................... 106 SHARING PROFITS AND LOSSES .............................................................................................. 106 AGREEMENTS ............................................................................................................................ 107 WIN BY PARTNERSHIP - A SUMMARY OF THE CHAPTER ..................................................... 108
SELL............................................................................................................111
SELLING IS THE ART TO IMPROVE THE PROBABILITY TO WIN THE DEAL ......................... 111 HOW TO GET MEETINGS AND HOW TO GET IN TOUCH ......................................................... 112 GET OUT IN THE FIELD! ........................................................................................................... 120 THE STRUCTURE OF THE CUSTOMER MEETING .................................................................... 122 THE SMALL ON-THE-SIDE PROJECT CAN BE A GREAT START .............................................. 125 A NEW CONTACT CALLING IN IS A VERY GOOD SIGN ............................................................ 126 PERSON TO PERSON SELLING, ALL BUSINESS IS LOCAL IN A GLOBAL MARKET ................ 127
GOOD LUCK! ...............................................................................................................................128 LISTEN!.......................................................................................................................................129 SMILE BEFORE YOU MAKE THE CALL, BUT DO NOT SMILE ALL THE TIME..........................139 THE CUSTOMER IS NOT ALWAYS RIGHT .................................................................................142 PRESENT YOUR OPTIMAL OFFER .............................................................................................145 THE QUOTE ................................................................................................................................147 ASK FOR THE ORDER .................................................................................................................151 WIN BY SELLING IN THE RIGHT WAY - A SUMMARY OF THE CHAPTER ..............................158
PRICE IT .................................................................................................... 161
UNIT PRICE IS NOT EVERYTHING ............................................................................................161 DIFFERENTIATION ....................................................................................................................163 WATCH OUT FOR LOW PRICING...............................................................................................164 PAYMENT TERMS ......................................................................................................................168 WIN BY PRICING IT RIGHT - A SUMMARY OF THE CHAPTER ................................................169
NEGOTIATE ............................................................................................. 171
NEEDS / OFFER NEGOTIATION - THE MEDIATOR ROLE .......................................................172 WHAT TO DO IN A NEGOTIATION - TALK ABOUT PRICE AND VALUE ...............................176 HAVE MANY PARAMETERS IN THE NEGOTIATION IN ADDITION TO UNIT PRICE...............176 ASK THE CUSTOMER FOR HELP TO NEGOTIATE INTERNALLY .............................................177 DON’T GIVE WITHOUT TAKING ................................................................................................180 WHAT TO REQUEST IN RETURN ..............................................................................................182 TRIAL CLOSURE .........................................................................................................................184 TAKE SMALLER STEPS WITH EVERY ROUND ..........................................................................187 USING SCENARIOS .....................................................................................................................187 ASK FOR A BREAK AND CALL SOMEONE .................................................................................188 WHAT IS A WIN? .......................................................................................................................189 THE CURRENCY AND RAW MATERIAL PRICING GAME ..........................................................190 WIN-WIN IN THE NEGOTIATION - A SUMMARY OF THE CHAPTER ......................................191
FOLLOW UP ............................................................................................ 193
PROJECT FOLLOW UP ................................................................................................................193 PERSONAL FOLLOW UP AND TIME MANAGEMENT ................................................................194 QUARTERLY REVIEW WITH THE CUSTOMER .........................................................................195 YEARLY REVIEW WITH THE CUSTOMER .................................................................................196 INTERNAL REVIEW ....................................................................................................................197 WIN BY FOLLOW UP - A SUMMARY OF THE CHAPTER ..........................................................199
PROBLEM MANAGEMENT ................................................................ 201
A COMPLAINT IS A GIFT ............................................................................................................201 ASK QUESTIONS .........................................................................................................................201 NEVER REPEAT THE SAME MISTAKE ......................................................................................204 TAKE THE INITIATIVE ...............................................................................................................205 WIN BY MANAGING PROBLEMS - A SUMMARY OF THE CHAPTER ........................................208
ATTITUDE .................................................................................................209
BE POSITIVE .............................................................................................................................. 209 BE FLEXIBLE .............................................................................................................................. 210 BE ADAPTABLE ......................................................................................................................... 210 BE A LISTENER .......................................................................................................................... 210 BE ACTIVE.................................................................................................................................. 211 BE PROACTIVE .......................................................................................................................... 211 BE SOCIAL .................................................................................................................................. 212 BE A NETWORKER .................................................................................................................... 212 BE ETHICAL ............................................................................................................................... 212 BE TRUSTWORTHY ................................................................................................................... 212 BE WILLING TO TAKE THAT EXTRA STEP .............................................................................. 213 BE PERSISTENT ......................................................................................................................... 213
WIN ..............................................................................................................215
Acknowledgements First of all I would like to thank my lovely wife Agneta who has been very patient with me over the years and who is a great support to me in all aspects of life. Thank you to my wonderful children Beatrice and Martin, in addition to being the best of the best you have also contributed to this book by proof reading and with design support. I would also like to thank Jermaine and Vijay for great advice and suggestions during the development of the book. Last but not least, thank you to all customers and colleagues that I have met during my career. You have helped me sharpen my pencil many times and without you this book would never have happened.
Introduction There is a growing requirement for truly successful and effective key account management in the ever increasingly competitive global market. Increased digitalization requires improved personal communication to make a difference. Key account business is made between people. Stakes are high. The potential reward with a key account is tremendous while cost of people is considerable and the required time to get to success is getting shorter and shorter. Despite, and at the same time thanks to the challenges, I enjoy working with key account management. Up to now I have spent more than 30 years doing it in various marketing, sales and management roles, in large multinational public corporations as well as smaller private companies. Today, I am doing consultancy work in sales and key account management. I see others doing the same journey as I have done, with the ups and downs, with days of sweet success and days of sweat inducing mistakes. Suddenly I woke up one morning thinking that I should write a book about my experiences as Key Account Manager. Why not share the methods and ideas I have developed hands on during the years? I would have loved to have such a guide in my hands in the early days as well as for the continuous improvement and reminders that are always needed. What book would be good to have, to turn to, to get new inspiration and ideas about how to continue? A table of contents started to develop in my mind. This is not a theoretical book. It is all about how to do it in real life. Regardless if you are a beginner or if you are already experienced in the business, there are ideas and inspiration to pick up. It can be read piece-by-piece jumping between chapters, but a first time read from start to end is highly recommended.
Whether you take the book from scratch and do everything in it, or use your current work methods and add or change what can be improved, I am sure it will help you in increasing the probability to win.
And that’s what it is all about.
Happy hunting, Jan Lind
The structure of this book If you are like me, you have probably already glanced through the table of contents in the beginning of the book. My intention is that the table of contents should give you a good overview of what the book includes, the flow of topics and how they relate to each other. It could actually be read as a very short summary of the entire book. At least it will serve as a good list of reminders after reading the book, in addition to the obvious where to find what function. The content is structured in a logic flow, with for example analysis preceding planning, and selling placed before winning. In real life, all topics are relevant at the same time, just with more or less emphasis. All chapters have subheadings related to the chapter heading. Each chapter includes a number of examples to illustrate the more general descriptions preceding them. The examples could describe real situations that have happened in your business. As a minimum the analogies that can be drawn from the examples should be useful in almost every business. Dialogues between key account manager and customer are used in many cases to show very clearly how a certain strategy can be implemented in practice. Each chapter is finished with a summary, and the book is finished with a summary of the complete contents. The idea is to make it easier to remember the contents and for quick reminders of the key messages.
It helps a lot to be positive, even in difficult times. It influences people you meet to be positive and a positive climate will enable more business. Not to mention how much better you will feel to work in a positive environment. Look at two people, one optimist and one pessimist. They have the same jobs. The optimist will have a higher probability to succeed just because of the positivity. Even if the optimist fails, wouldn’t you agree that the optimist had had a better time? - Attitude reminder #1: Be positive
How to Win in Key Account Management – Analyze
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Analyze Are you new to your customer or do you not know enough detail to know where you are going? Go out and meet the people! Do not spend weeks analyzing what to do before you meet them. This might be seen as a strange start to a chapter about analyzing. However, I just want to make sure that you do not fall in the trap of sitting too comfortably in the office making theories about what to do to win the business you are targeting to get. Having said that, obviously a good analysis is a key to manage your account in the best way. This will greatly help you to get where you and your customer want to get to. Just be sure that you mix theory and practice in your analysis work. Hopefully you have a few products running with the customer to get you started digging deeper to build a better understanding. Meet the people who already have a relationship with your company, introduce yourself and listen to their concerns, pick up the ball and follow up. If you have no business and have no developed relationships yet, book meetings where you think you can get the best information on how to get started. Get inspiration from the list of departments below. Now, do not get stuck in only handling day-to-day issues. Make sure to set aside time to analyze your customer and your own company to find a longer-term direction. If you are only handling the day-to-day issues you are not managing the account effectively.
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How to Win in Key Account Management – Analyze
Information about the customer from all departments Your customer is probably a large corporation with a complex organization. Or a medium sized company with an ever-changing organization. Or a smaller company with no organization. Or another mix of all above. Just be sure it will take time and effort to understand what you should know to do an effective job. And today's view will not be the same as tomorrow's as everything is constantly changing. You might think this sounds too much, and that it is better to move on with handling the day-to-day issues only. But let me assure you that a good understanding of your customer is key to be successful and to feel confident and proud of what you are doing. Do you have a good contact with the logistics department manager of your customer? Good, that is an excellent start. But if it is the only contact, you are heading into problems. Suddenly he or she may tell you that they do not need more of the product you are delivering. As it could take at least a year to get a new product running with your customer you might find yourself in a rather difficult situation. Instead, try to list all departments of your customer. They might be for example: Shipping Logistics and Planning Purchasing Product Management Quality