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Key Account Management

Key Account Management. McDonald and Rogers (2000). Changing world of Personal Selling. Transaction focused Hard Sell techniques to close the sale (see Yr. 1 notes) DMU theory considers the way decisions are made inside the organisations

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Key Account Management

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  1. Key Account Management McDonald and Rogers (2000)

  2. Changing world of Personal Selling • Transaction focused • Hard Sell techniques to close the sale (see Yr. 1 notes) • DMU theory considers the way decisions are made inside the organisations • Users, Influencers, Deciders, Approvers, Buyers, Gatekeepers (Webster and Wind 1972) • RM shifts emphasis to long-term retention, growing business together

  3. Globalisation • fewer, larger customers • opportunities for growing together • Mature Markets • intense competition • price led ‘re-commoditisation’ • importance of retaining and developing existing business • resulting in Customer Power • demanding sophisticated, bespoke solutions

  4. Key Accounts • Identified as part of Strategic Planning • 80/20 • not just the biggest but the best potential • using BCG/GE/McKinsey matrices • market growth/ market share • market attractiveness/company strengths

  5. Identify target segments • Select compatible partners • Analyse their strategic plans to understand how you can/do add value to their activities

  6. Stages in KAM • Pre- • prospecting, bidding for business • Early • one of many suppliers (price-led) • contact only through sales - buyer depts Sales Buyers

  7. Stages in KAM • Mid- • preferred supplier (over 50% share) • regular interaction between staff in many depts but account manager still the main contact • some degree of trust and commitment • but alternatives and exit strategies still considered

  8. ‘Gone are the days of the expense account lunch, instead the KAM executive will organise skittles, tennis or golf tournaments to strengthen the web of transactions between the two companies’

  9. Partnership KAM • 100% share, commitment for 3-5yrs • Open-book sharing of information, expertise, testing of innovation, joint marketing campaigns • Full alignment of all departments Main Contact Account Manager Steering, coordinating role

  10. Synergistic KAM • You can’t see the join • teams from each organisation work together on projects • long-term decisions made jointly

  11. More likely to be found • in complex products which are tailor-made • Where quality is vital (safety, legal, competitive advantage reasons) • stable industrial markets (not fashion-led)

  12. Why things go wrong • Change of key personnel • Breach of trust • Failure to deliver expected quality • Cultural mismatch • Changing markets • Financial problems

  13. What makes a good KA Manager? • Personal • integrity, resilience, likeability • Knowledge • product, market, financial, legal, cultural

  14. Thinking skills • creative, flexible, strategic, lateral • Managerial • listen, persuade, lead, • credibility, admin.

  15. Selling is less than 10% of the job • Social skills • gain networks within the buying company • organise events for the two staffs to meet & mix • build formal or informal multi-disciplinary teams to improve service • but never forget it is about making money

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