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Key Account Management - Commercial Excellence Forum

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This presentation has a focus on key account management and how to most effectively accelerate growth within the largest customers – and not least how to drive growth towards different types of customers.

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Key Account Management - Commercial Excellence Forum

  1. 1. Key Account Management Accelerate growth within your largest accounts Commercial Excellence Forum 29th of January 2016
  2. 2. 2 January 29th 2016 Key Account Management: Accelerate growth within your largest accounts April 29th, 2016 Customer Retention September 30th, 2016 TBD Commercial Excellence Forum 2016 Planned meetings in 2016
  3. 3. 3 Next Commercial Excellence Forum is Friday the 29th of April The shortcut to growth: Proactive and reactive customer retention • Learn about Implements approach to customer retention • Receive input on how to identify and manage the most important drivers of customer churn • Get inspiration from companies who have worked with customer retention and achieved significant business results as a consequence It‘s 5 times more costly to acquire new customers, than to retain current ones
  4. 4. 4 Agenda 09:00 Welcome and introduction to the topic of the day 09:15 How to accelerate growth within the largest customers 10:00 Short break and networking 11:00 Implementation of KAM – Dilemmas and inspiration 11:40 Wrap-up of the Commercial Excellence Forum event 10:15 Danfoss: Accelerated KAM growth through focused commercial initiative 11:45 Networking and light lunch
  5. 5. 5 We experience a strong focus on KAM across a wide range of industries…
  6. 6. 6 Demand for growth • Strategic focus moving from efficiency and cost-cutting to revenue growth • Less sales resources to generate sales – we need to focus even more on the opportunities we engage with • Differentiation and focus on unique value propositions are considered as vital, in order to grow in a very competitive market Fierce competition and still focus on efficiency • Focus on efficiency – customers want documented value creation • Focus on less but even more professional suppliers • Increased number of stakeholders involved in buying process • Centralized purchasing Why so much focus on Key Account Management now? Need for a changed way to generate growth on existing key accounts
  7. 7. 7 Classic symptoms and challenges when working with Key Account Management HOW TO ORGANIZE INTERNALLY? ONLY LITTLE DIFFERENCE BETWEEN KEY ACCOUNT MANAGEMENT AND THE NORMAL SALES APPROACH? WHAT DEFINES THE KEY ACCOUNTS? AND WHY DOES IT MATTER THERE IS NO OVERALL KEY ACCOUNT STRATEGY – WHAT ARE THE AMBITIONS WITH THE KEY ACCOUNT FOCUS NO CONSISTENT RESOURCE ALLOCATION ACROSS FUNCTIONS, REGIONS AND ACCOUNTS DO WE HAVE THE CAPABILITIES TO “LIVE” TIHE KEY ACCOUNT MANAGEMENT AMBITIONS? NO COMMON UNDERSTANDING OF WHAT KEY ACCOUNT MANAGEMENT MEANS
  8. 8. 8 The traditional basis for Key Account Management is changing Customers ARE different – we cannot use the same approach for all Key Accounts Compliance and excellent delivery is a MUST….but is NOT enough Increased number of stakeholders internally AND externally KAM The KAM approach is a company approach more than a sales approach Changed focus from retention to growth Procurement is being centralized and increase their professionalism
  9. 9. 9 … and therefore the KAM approach needs to change … Development Key Account Management
  10. 10. 10 The key question is simple – and yet hard How strong is the growth orientation of your KAM program?
  11. 11. 11 What is the growth orientation of your KAM strategy and approach? WHO Are the accounts that have a substantial growth potential for the coming years? HOW Have you set your commercial “engine” and organization up for growth? WHAT Will be your areas of growth and how to build proper value propositions around these? A more growth-oriented KAM approach will answer these vital questions …
  12. 12. 12 We have destilled six underlying KAM growth amplifiers Define specific Key Account strategy and plans Select KA´s based on performance AND potential Create a Key Account Sales Operating Model Take a team approach and ensure executive sponsorship Leverage operational customer insight commer- cially Challenge Key Accounts with insights and KA specific value propo- sitions WHO HOW WHAT
  13. 13. 14 Survey results Key Account selection: We select KAs based on very thorough objective and measurable performance criteria (KPIs) such as our current sales, share of wallet, revenue, profit etc. Key Account selection: We select KAs based on an objective evaluation of the business potential of the accounts as well as the product/solution fit and the company's strategic outlook Key Account portfolio management: We regularly (i.e. at least yearly) assess the potential of the key accounts and reprioritize accounts and resources accordingly Strategic Key Account Plan: We have made a strategic plan for each KA that’s been shared with all relevant internal stakeholders, all of whom have committed to respective actions. Understanding of key accounts needs: We meet recurrently internally to get a common picture of the critical business issues, the needs and opportunities of our KAs (opportunity coaching). Stakeholder mapping and development: We recurrently document and update a detailed overview of the key stakeholders and the decision process at the KA organisation. Stakeholder mapping and development: We have a plan for specific activities targeted towards relevant stakeholders at the key account organisation. Joint business planning process: We have established a process where we engage the main stakeholders of the KA, sharing critical business issues and ideas for improvement WHO HOW WHAT Non-existent ExcellentPoor Average Good Selecting Key Accounts, pains & needs and strategy Average: 3.2
  14. 14. 15 Evaluate and base your selection of Key Accounts on both performance AND potential criteria Future business potential Historic performance Parameters (examples): o Revenue (total, per product group, geographically etc.) o Profitability (total, per product group etc.) o Financial KPI´s Parameters (examples): o Share of Wallet o Potential for growth (product groups, geographical areas etc.) o Product/Technology/Company fit o Relationships ! Select Key Accounts based on performance AND potential WHO HOW WHAT
  15. 15. 16 Define a Key Account specific strategy Levelofcustomization Level of integration Commercial and technical integration Commercial integration No integration single products None Vertical/ segment/ industryAccount WHO HOW WHAT Choose a specific strategy for each Key Account, and make sure that the Key Account is willing to the same level of integration and customization like you! * Inspired by McKinsey 2003
  16. 16. 17 Translate strategy to active Key Account (joint) business plans 1. Understanding the Customer - information and own view of their business a) What is the Customer's business and position b) Key challenges and opportunities facing the customer’s business 2. Current situation with the customers: a) Current business with the customer b) Current Relationships with the customer c) Current strategic and innovation projects with the customer 3. Where do we want to be in the Future? a) 3 – 5 year Business ambitions & goals b) Major issues and key strategic objectives (SWOT and objectives) c) Strategy to address key strategic issues and reach the goals (MWB) 4. How do we get there? a) Action plan to achieve goals (overall and per region) b) Regular following up on Account Plan Key Account strategy elements 1. Understanding the Customer - information and own view of their business a) What is the Customer's business and position b) Key challenges and opportunities facing the customer’s business 2. Current situation with the customers: a) Current business with the customer b) Current Relationships with the customer c) Current strategic and innovation projects with the customer 3. Where do we want to be in the Future? a) 3 – 5 year Business ambitions & goals b) Major issues and key strategic objectives (SWOT and objectives) c) Strategy to address key strategic issues and reach the goals (MWB) 4. How do we get there? a) Action plan to achieve goals (overall and per region) b) Regular following up on Account Plan KA joint business plan is mutual and long term committing to growth WHO HOW WHAT Share your plan with the Key Account, and make sure that both parties have assignments and commitments in the plan!
  17. 17. 18 Deal strategizing: We meet with executive sponsors and specialists at least quarterly, to give inspiration and strategize on how to create and win opportunities at the KA Roles and responsibilities: Executive management actively participates in ensuring ongoing removal of barriers, endorse KA initiatives and provides strong senior management sponsorship Key Account teams: We have a well-defined way of establishing, organising and running cross functional key account teams Key Account teams: All members of KA teams have a clear understanding of the business with the KA as well as future initiatives and agreements Sales Operating Model: We have an updated cross KA overview of key opportunities, which we actively and regularly (monthly) discuss at sales management and executive meetings WHO HOW WHAT Survey results Non-existent ExcellentPoor Average Good Team approach and executive sponsorship Average: 3.0
  18. 18. 19 Costs of existing situation & gains of new solution documented with KA´s figures KA agree to explore further Create a robust KAM Sales operating model Key buying decision criteria per key account KAM buying process 1 Needs emerging Projects defined Functional analysis Requirement specification Tender and RFP Installation KAM sales process – activities and skills 2 KAM sales process activities per sales role. Capabilities per role Influence requirements and key stakeholders Drive sales process or re-engineer RFP Close, delivery, installation + after sales Verifiable outcomes/gates/non- negotiables 3 Sales stage validation + roles + non-negotiable sales standards Valid KAM pipeline and forecasting 5 KAM pipeline review and performance management C KAM management meeting cadence and behaviour 4 KAM deal coaching KAM pipeline coaching Coaching to win + sales acceleration + KAM meeting rhythmWeekly KAM meeting cadence WHO HOW WHAT Ensure a transparent opportunity pipeline at our Key Accounts, and involve senior management in strategizing the most vital opportunities! Define insights and challenger play Validate pain and potential areas of improvement Proposal presented at face- to-face meeting at KA Final order signed by KA Implementation plan accepted by customer
  19. 19. 20 Elements of a proper KAM operating model Element 2: Strong transparency pipeline state overview for each KA used for performance reviews and sales management coaching – linked to data and intelligence in CRM systems Element 1: KAM sales process closely aligned with the KA´s buying process, including clearly defined verifiable outcomes and non- negotiables for each sales stage Element 3: Fixed KAM sales management meeting rhythm ensuring the necessary KAM leadership and KA interaction Element 4: Win rooms, coaching tools and capabilities facilitating conversations about specific deals and ensuring quality in KA interaction to win more business WHO HOW WHAT
  20. 20. 21 Take a team approach and ensure executive sponsorship Team leadership – build accountable and aligned KA teams KAM as Trusted Advisors for the customer Set up strong team structure to focus on growth Global and local presence - mirror customer structure KAM’s Reliable Credibility Intimacy Trusted Advisor KA Steering team (with executive sponsor) KA Operations team KA Development team WHO HOW WHAT Establish a “mirror” structure of the Key Account, and make sure to avoid that local incentives becomes a barrier to Key Account Development!
  21. 21. 22 Usage of operational insight: We proactively use insights of relevance to the KA and their industry to start and develop conversations on new business opportunities for the KA Customer specific value propositions: We meet at least quarterly with relevant internal stakeholders to formulate new quantifiable value propositions to the KA Customer specific value propositions: We present value propositions to the KA, where we document the monetary value the KA will realize by implementing suggested solution Proactive approach: We make sure, that we at least every 6 month, challenge the KA with ideas that can improve the KA’s business within a 1-2 year horizon WHO HOW WHAT Survey results Non-existent ExcellentPoor Average Good Value proposition and proactive selling Average: 2.8
  22. 22. 23 Leverage operational customer insights and capabilities commercially Data from the daily operations is a vital source of knowledge, that can be turned into real key account specific insight. What is the impact of our services delivered today, who are influenced by the problems we solve, and to what extent can we improve the key accounts business? What kind of information need to be gathered from todays operational work? 1 How to ensure a smooth information gathering?2 How to “translate” the operational information into commercial insight that can be shared with the Key Account? 3 WHO HOW WHAT Ensure a full updated overview of operational performance, and establish a culture where all Key Account facing staff is looking for growth opportunities!
  23. 23. 24 Challenge Key Accounts with insights and Key Account specific value propositions In order to succeed we need to have clear value propositions, that challenge the customers existing way of doing business. It is a matter of both what you sell and how you sell it Make sure that your value propositions are differentiated, resonate with the customer and can be substantiated Make sure that your key account managers are able to challenge customers and reframe the customers perspectives on own business WHO HOW WHAT Make sure to develop account specific value propositions, and challenge your Key Accounts at least quarterly with new perspectives on their own business!

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