The Strategic Key Account Plan - Hartmut Sieck - ebook

The Strategic Key Account Plan ebook

Hartmut Sieck

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The other day in Germany: The Key Account Manager John Smith is told by his boss to create a Key Account Plan for an important, strategic customer. Should he now quickly prepare a PowerPoint presentation and show it to his boss so he's satisfied? Is a Key Account Plan actually a presentation or a real tool? If it actually is a tool, what characterizes a good Key Account Plan? How should such a Key Account Plan be structured? Should the Key Account Manager prepare this plan by himself? Just as he is contemplating all these questions, he stumbles on an interesting survey. According to this study only 20% of Key Account Managers said that they actually use this plan as a tool in their daily work, but it was this 20% that was more successful than their competitors in the year of the crisis in 2009! The conclusion from the survey catches John Smith's attention and he decides not to prepare a mere presentation but to make the most of the Account Plan by using it as a real tool. If you can identify with John Smith, this book is for you. This book will help you to structure and prepare a Key Account Plan in a professional manner. You have already prepared an Account Plan? Then use this book for a thorough scrutiny of your plan. This book is intended to be used as a guide for your work, so you can immediately put into practice what you have just read.

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Contents

HOW TO BENEFIT MOST FROM THIS BOOK

WHY THE ACCOUNT PLAN SHOULD BE PART OF EVERY KEY ACCOUNT MANAGER'S TOOL BOX

ACCOUNT PLAN AT A GLANCE

3.1 W

HAT IS AN

A

CCOUNT

P

LAN

?

3.1.1 Structure

3.1.2 Format

3.1.3 Storage of the plan

3.1.4 Fields of use

3.2 W

HO PREPARES THE

A

CCOUNT

P

LAN

?

3.3 F

OR WHAT CUSTOMERS SHOULD AN

A

CCOUNT

P

LAN BE PREPARED

?

3.4 H

OW TO INCORPORATE THE

A

CCOUNT

P

LANS INTO THE BUSINESS PROCESS

?

3.5 T

WO MORE HINTS FOR APPLICATION

3.6 H

OW DO YOU RECOGNIZE WHETHER THE

A

CCOUNT

P

LAN IS BEING USED AS A TOOL

?

THE STRUCTURED ACCOUNT PLAN

4.1 C

OVER

P

AGE

4.2 M

ANAGEMENT SUMMARY

4.3 C

USTOMER

A

NALYSIS

4.3.1 Brief profile

4.3.2 Company and shareholder structure

4.3.3 Important holdings and locations

4.3.4 Key figures

4.3.5 Top 3 objectives and projects

4.3.6 Procurement strategy

4.3.7 Market and competitors’ environment

4.3.8 Important customer projects

4.3.9 Customer requirements

4.3.10 Key people and power structure

4.3.11 SWOT

4.3.12 3 things you also need to know about your customer

4.3.13 Sources of information

4.4 Y

OUR OWN POSITION

4.4.1 Perception of the customer

4.4.2 Business history

4.4.3 Supply share

4.4.4 Potential portfolio

4.4.5 Competition environment

4.4.6 Unique Value Proposition

4.4.7 SWOT

4.5 D

ETERMINATION OF POTENTIAL

4.6 B

USINESS

D

EVELOPMENT

4.6.1 Mission

4.6.2 Top 3 Objectives – Strategies – Requirements

4.6.3 Financial planning

4.6.4 Account Team

4.6.5 Relationship and customer loyalty management

4.7 A

CTION PLAN

4.8 H

ISTORY OF

C

HANGE

LAST BUT NOT LEAST

List of figures

Figure 1: 8 dimensions of a systematic KAM

Figure 2: Key Account Plan structure

Figure 3: Account plan – customer with several business units

Figure 4: Account plan ladder

Figure 5: KAM and other sales approaches

Figure 6: Budget planning

Figure 7: Account Plan structure

Figure 8: Example KAP cover page

Figure 9: Example KAP – Management summary

Figure 10: Example KAP – Brief profile

Figure 11: Company structure

Figure 12: Example KAP – Important holdings

Figure 13: Example KAP – Locations, global presence

Figure 14: Example KAP – Key figures of the customer

Figure 15: Porter's Value Chain

Figure 16: Example KAP – Aims, projects, and procurement strategies

Figure 17: Example KAP – Market environment customer

Figure 18: Important customer projects

Figure 19: Example KAP – Customer requirements

Figure 20: Example KAP – Power Map

Figure 21: Key to Power Map Analysis

Figure 22: SWOT analysis

Figure 23: Example KAP – Customer SWOT

Figure 24: Example KAP – Things you also need to know about your customer

Figure 25: Google Alert

Figure 26: From supplier to strategic partner

Figure 27: Example KAP – Projects from a historic point of view

Figure 28: Example KAP – Supply share

Figure 29: Example KAP – Potential portfolio

Figure 30: Example KAP – Competition analysis

Figure 31: Blue Ocean Step 1 customer requirements

Figure 32: Blue Ocean Step 2 Your position with the customer

Figure 33: Blue Ocean Step 3 Position of competitors

Figure 34: Example KAP – Unique Value Proposition

Figure 35: Your SWOT and the sources in the Account Plan

Figure 36: Example KAP – Your SWOT

Figure 37: Example KAP – Determination of potential

Figure 38: From analysis to MOST

Figure 39: Example KAP – Mission

Figure 40: Example KAP – Top aim and strategy

Figure 41: Virtual account team

Figure 42: Key Account Manager as ‘Single Point of Contact”

Figure 43: Key Account Manager as real networker

Figure 44: Example KAP – Account Team

Figure 45: Example KAP – Account Team – RACI

Figure 46: Example KAP – Key Account Marketing

Figure 47: Example KAP – Action plan

Figure 48: Example KAP – Changes at a glance

1 How to benefit most from this book

The other day in Germany: The Key Account Manager John Smith is told by his boss to create a Key Account Plan for an important, strategic customer. Should he now quickly prepare a PowerPoint presentation and show it to his boss so he's satisfied? Is a Key Account Plan actually a presentation or a real tool? If it actually is a tool, what characterizes a good Key Account Plan? How should such a Key Account Plan be structured? Should the Key Account Manager prepare this plan by himself? Just as he is contemplating all these questions, he stumbles on an interesting survey by SAMA (Strategic Account Management Association) on the Internet concerning trends in KAM:

Gist of the SAMA survey:

more than 70% of the businesses surveyed confirmed they had a Key Account Plan template in their organizationOnly 20% of key account managers said that they actually use this plan as a tool in their daily work.But it was this 20% that was more successful than their competitors in the year of the crisis in 2009!

The conclusion from the survey catches John Smith's attention and he decides not to prepare a mere presentation but to make the most of the Account Plan by using it as a real tool.

If you can identify with John Smith, this book is for you. This book will help you to structure and prepare a Key Account Plan in a professional manner. You have already prepared an Account Plan? Then use this book for a thorough scrutiny of your plan.

In this book we will use the term Account Plan or Key Account Plan (KAP). Both terms are synonyms for other terms such as

Customer Development Plan

Customer Strategy Plan

Business Plan with regard to individual customer

This book is intended to be used as a guide for your work, so you can immediately put into practice what you have just read. If you like, you can choose a customer now and prepare a Key Account Plan for this customer with the help of this book. Of course, you can also just pick out aspects of this book and, for example, go directly to customer analysis.

Some hints on how to use this book. There are two boxes you will find in the book again and again.

The first box is called TRANSFER.

TRANSFER

These boxes enable you to apply what you have read to your own business environment.

The second box is called the HINT box.

HINT

This box contains practical hints on the focal topic of the session.

As a reader of this book, you'll receive a 50% discount on all product downloads. This means that if you're looking for ready-to-use Key Account Plan templates in English or German, or more check lists and tools for your Key Account Management and your sales, just take a look at www.downloadshop.sieck-consulting.de

At the end of your order enter this code 7HW2KCD53T to receive your 50% discount. This code is valid until September 26, 2019.

Yours, Hartmut Sieck

2 Why the Account Plan should be part of every Key Account Manager's tool box

Key Account Management without a Key Account Plan is like a morning without a toothbrush! But while we use a toothbrush as a matter of course, we don’t have time for the Account Plan. Yet there are good reasons to use the Account Plan as a real tool. From my experience, there are five strong driving forces in favor of using a Key Account Plan:

Customers become more and more complex

Products / Services become more comparable and the influence and power of procurement solely focused on price greater

Procurement and sales is a matter of teamwork nowadays

A few companies have a high strategic significance

Increased expectations on the customer side

Let's take a look behind the scenes of these five strong driving forces.

Customers become more and more complex

What used to be true for large holdings is now taken for granted for medium-sized companies:

Companies consist of several business units.

Companies (almost always) act globally and have several locations distributed all over the world.

Procurement decisions are not necessarily made at headquarters but can be made at some other location for the entire company (lead buyer concept).

In a nutshell: If you want to make the most of potentials, you need a structured analysis of the customer's whole company!

Products / Services become more comparable and the influence and power of procurement solely focused on price greater

Customers buy globally nowadays and at the same time products and services become more transparent. E-auctions, transparent manufacturing costs, reduction of the number of suppliers, and the increasing power of procurement seem to make many decisions a mere matter of price. If you want to take countermeasures, you'll need other approaches besides just selling a product. A network beyond procurement and new sales ideas that are focused on holistic solutions and process cost optimization are necessary.

In a nutshell: Informed knowledge about the customer, his organization, power structures, processes and process costs is the key to success. The KAP supports you in working out these points in a systematic way and find alternative solutions.

Procurement and sales is a matter of teamwork nowadays

In B2B an average of 5.4 people is involved in procurement decisions according to a survey from 2013. Today, buying decisions are made by (internationally staffed) committees. In general, more and more people are somehow involved in the decision making process. Since more people and departments get involved on the customer side, more people and departments on the supplier side need to be involved as well. This means that everyone in this sales team (also called selling or key account team) has to have the same objectives in mind and information has to be shared actively among the team members.

In a nutshell: On the one hand, the KAP is a tool to determine decision processes and people involved on an international level; on the other hand, it is a communication tool to ensure concerted action towards the customer within your account team.

A few companies have a high strategic significance

I know several companies whose survival depends on a few key account customers. In industries like the automotive industry or food industry, a handful of big players dominate the customer market. The Pareto Principle (the 80-20-rule) is often quoted in this context. It means that 20% of the customers generate 80% of the business' total sales. If one of those clients is lost or business is not developed in a consequent and sustainable way, this may jeopardize the company's very existence.

In a nutshell: If you do not recognize changes in the customer's company or market environment in time, you are endangering your own company. The Key Account Plan thus functions as an early warning system and tool to secure your future!

Increased expectations on the customer side

When I ask our customers during workshops what customer orientation means, I often get the clear statement: ‘I expect my suppliers to know my business, my markets, my processes, and my products, and to offer pro-active solutions accordingly.’

In short: The KAP can help you to find the necessary knowledge about your customer in a systematic way and keep it up-to-date.

The requirements and challenges mentioned above can be summarized in two fundamental results:

It is necessary to have an in-depth knowledge of the customer in all their facets (organization, processes, power and decision making structures, changes on the market, etc.). Therefore, continuous and systematic customer analysis is a MUST!

Selling needs a holistic, strategic approach. Who on the customer side needs to be influenced when using what message? What customer-specific sales strategies are employed by my competitors? …

This means a professional competitors' analysis and a strategic sales approach on all levels (multi-level selling) – pursuing both medium and long-term goals – is the key to success.

Here the Key Account Plan for a specific customer comes into play. The plan is a structured tool that supports you in analyzing your customer, your competition and the market, and to develop clear objectives and strategies.

During a workshop, one of the participants perfectly captured the meaning and purpose of a KAP:

‘The meaning and purpose of the Account Plan is having a plan!’

Use the changes and requirements described above as a chance and use your Key Account Plan as an instrument to be one step ahead of your customer and your competitors. In Key Account Management, it is the only way to switch from a reactive course of action to an active, creative one.

TRANSFER

Review the motives mentioned above. What are the key driving factors for you in your specific business environment to prepare an Account Plan?

Customers become more and more complex

Products / Services become more comparable and the influence and power of procurement solely focused on price greater

Procurement and sales is a matter of teamwork

A few companies have a high strategic significance

Increased expectations on the customer side

Have you checked at least one statement? Then the Key Account Plan is an important instrument for you.

3 Account Plan at a glance

3.1 What is an Account Plan?

Systematic Key Account Management comprises a number of important modules. In day-to-day practice, eight co-dependent key areas have emerged.

The Key Account Plan is part of the tools dimension and it is strategic document and tool at the same time. Experience from many consulting and training workshops has shown that it may actually be better to speak of a strategic tool only. A document is easily filled in. A tool however has to be used in the right way. And that is the point of a professional Key Account Plan! The more professional and experienced you are in using this tool, the greater the leverage of the Account Plan for your success. The result of the professional work is finally documented – in the (Key) Account Plan.

Figure 1: 8 dimensions of a systematic KAM1

3.1.1 Structure

At its core, the Account Plan consists of a 4-stage process.