Account Management - White paper
A short article about managing key accounts.
“Managing a relationship between two large organisations is like watching two octopi mate” Senior Executive, Astra Zeneca
Back in 2008 I had the opportunity to speak at a conference in Malaga for one of my customers, Sigma Aldrich, a multinational chemical company. During the day there were several presenters, one of which was a senior buyer from one of their customers, Astra Zeneca. He was there to help them understand the complexities and demands of managing Astra Zeneca as a customer, and as it happened at that time, they were not doing it very well. This made his words even more valuable and gave me great evidence for my own conference speech which was also about managing accounts. His advice was pretty simple; manmark and talk to each other.
The bigger they are, the harder they fall!
The challenges for suppliers of key account management are numerous, but the biggest is the impact of getting it wrong, particularly if your key customer is worth a significant slice of your total revenue. It’s imperative, therefore, that we invest time and resources in getting close to our key customers and what they need. The bigger the customer the more complex this process will be on both sides of the relationship.
Research on the subject from St. Gallen University in Switzerland identified key traits to best practice account management. The research showed there needs to be both Operational Account Management – what we do day to day to ensure delivery of our service for our key customers, and Corporate Account Management – what is our business doing to develop in line with our key customers’ future business and direction. On both an operational and corporate level there were five key aspects of the relationship that need to be management.
What can go wrong?
Many years ago, I was working with a major UK bank and I was told an interesting story by one of my participants about Account Management. This particular bank had multiple divisions which often sold to the same companies. One of these companies was a major supermarket chain. On one particular day this gentlemen was waiting in reception for his contact to greet and collect him. When the buyer finally arrived, he was followed by some colleagues from one of the other divisions of the bank. Neither of these salespeople knew that the other was working with the same buyer, or that they were likely to be there on the same day. The person who knew the most? The customer! More than a little embarrassing, but the moral of the story here is that you need to understand everything about your relationship with your biggest accounts. How much more effective would these two salespeople be if they’d shared with each other what they knew about the buyer, contacts company and sales opportunities.
Everyone in our business knows who are key customers are, right?
Don’t assume so. In an experiment with Olympus a few years back I asked the senior management (around 10 people) to write down the names of their Top 5 customers. I should have received the same five names, but in fact got a list of more than 20! As a business if we are going to invest, we need to invest in the right customers.
What can you do?
Is this really a key customer in the eyes of your company? Sometimes it’s a big account for you but not necessarily key for the business. If it isn’t key to the organisation some of these actions are not relevant.
You need to invest time in understanding your biggest customer’s business. Set time in your diary to update your knowledge each month.
Set a monthly internal call to discuss the account amongst the account team. 20 minutes to discuss information and agree actions for the next 30 days.
Plot everyone who comes into contact with your customer directly or indirectly. Who is in contact with who? Senior management, customer service, finance, sales, production…
Even for those not directly involved with that customer, ensure that the whole company knows who your key customers are.
Agree and document who has responsibility for what in the management of the account to avoid actions being missed. Use the ROAD approach. Responsibility for?, Operational Involvement in?, Advise on?, Data they should keep up to date with.
Don’t try to channel everything through one Account Manager. Allow easy flow of contacts to happen between similar departments – finance to finance for example.