Key Account Management

Accelerate growth within your largest accounts

Commercial Excellence Forum 29th of January 2016
Commercial Excellence Forum 2016

Planned meetings in 2016

January 29th 2016

Key Account Management: Accelerate
growth within your largest accounts

April 29th, 2016

Customer Retention

September 30th, 2016

TBD

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Next Commercial Excellence Forum is Friday the 29th of April

It‘s 5 times more costly to acquire new customers, than to retain current ones

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

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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

10:15 Danfoss: Accelerated KAM growth through focused commercial initiative

11:00 Implementation of KAM – Dilemmas and inspiration

11:40 Wrap-up of the Commercial Excellence Forum event

11:45 Networking and light lunch

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We experience a strong focus on KAM across a wide range of
industries…

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Why so much focus on Key Account Management now?

Demand for growth Fierce competition and still

focus on efficiency
• Strategic focus moving from
efficiency and cost-cutting
to revenue growth • Focus on efficiency –
customers want
• Less sales resources to documented value
generate sales – we need Need for a creation
changed way to
to focus even more on the
generate growth • Focus on less but even
opportunities we engage on existing key
with more professional
accounts suppliers
• Differentiation and focus
• Increased number of
on unique value
propositions are stakeholders involved in
considered as vital, in order buying process
to grow in a very
• Centralized purchasing
competitive market

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Classic symptoms and challenges when working with Key Account
Management

NO COMMON UNDERSTANDING THERE IS NO OVERALL KEY

OF WHAT KEY ACCOUNT ACCOUNT STRATEGY – WHAT
MANAGEMENT MEANS ARE THE AMBITIONS WITH
THE KEY ACCOUNT FOCUS

WHAT DEFINES ONLY LITTLE

DIFFERENCE BETWEEN HOW TO
THE KEY
KEY ACCOUNT ORGANIZE
ACCOUNTS?
MANAGEMENT AND INTERNALLY?
AND WHY DOES
THE NORMAL SALES
IT MATTER
APPROACH?

DO WE HAVE THE
CAPABILITIES TO NO CONSISTENT RESOURCE
“LIVE” TIHE KEY ALLOCATION ACROSS
ACCOUNT FUNCTIONS, REGIONS AND
MANAGEMENT ACCOUNTS
AMBITIONS?

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The traditional basis for Key Account Management is changing
Increased number of
stakeholders internally
AND externally
Customers ARE different –
we cannot use the same
approach for all Key
Accounts

Compliance and
excellent delivery is a
MUST….but is NOT KAM
enough

Procurement is being
centralized and increase
their professionalism
Changed focus
from retention to
growth
The KAM approach is a company
approach more than a sales
approach

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… and therefore the KAM approach needs to change …

Key Account Management

Development

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The key question is simple – and yet hard

How strong is the growth orientation

of your KAM program?

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What is the growth orientation of your KAM strategy and approach?

A more growth-oriented KAM approach will answer these vital questions …

WHO HOW WHAT

Are the accounts Have you set your Will be your areas of
that have a commercial “engine” growth and how to
substantial growth and organization up build proper value
potential for the for growth? propositions around
coming years? these?

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We have destilled six underlying KAM growth amplifiers

WHO HOW WHAT

Challenge
Key
Define Create a Take a Leverage Accounts
Select KA´s
specific Key team operational with
based on
Key Account approach customer insights
performance
Account Sales and ensure insight and KA
AND
strategy Operating executive commer- specific
potential
and plans Model sponsorship cially value
propo-
sitions

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 WHO HOW WHAT

Survey results
Selecting Key Accounts, pains & needs and strategy
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 Average:
stakeholders, all of whom have committed to respective actions.
3.2
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

Non-existent Poor Average Good Excellent

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 WHO HOW WHAT

Select Key Accounts based on performance AND potential

Parameters (examples): Parameters (examples):

o Revenue (total, per product o Share of Wallet
group, geographically etc.) o Potential for growth (product
o Profitability (total, per groups, geographical areas
product group etc.) etc.)
o Financial KPI´s o Product/Technology/Company
fit
o Relationships

Historic Future business

performance potential

Evaluate and base your selection of Key Accounts on both performance AND potential
! criteria

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 WHO HOW WHAT

Define a Key Account specific strategy

Account
Level of customization

segment/
Vertical/

industry
None

No integration Commercial Commercial and

single products integration technical integration

Level of integration

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

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 WHO HOW WHAT

Translate strategy to active Key Account (joint) business plans

Key Account strategy elements KA joint business plan is mutual and long
term committing to growth
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 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

b) Major issues and key strategic objectives (SWOT and objectives) 2. Current situation with the customers:

a) Current business with the customer

c) Strategy to address key strategic issues and reach the goals (MWB) b) Current Relationships with the customer

c) Current strategic and innovation projects with the customer

4. How do we get there? 3. Where do we want to be in the Future?

a) 3 – 5 year Business ambitions & goals

a) Action plan to achieve goals (overall and per region) b) Major issues and key strategic objectives (SWOT and objectives)

c) Strategy to address key strategic issues and reach the goals (MWB)

b) Regular following up on Account Plan 4. How do we get there?

a) Action plan to achieve goals (overall and per region)

b) Regular following up on Account Plan

Share your plan with the Key Account, and make sure that both parties have assignments
! and commitments in the plan

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 WHO HOW WHAT

Survey results

Team approach and executive sponsorship

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

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
Average:
Roles and responsibilities: Executive management actively
participates in ensuring ongoing removal of barriers, endorse KA 3.0
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

Non-existent Poor Average Good Excellent

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 WHO HOW WHAT

Create a robust KAM Sales operating model

Needs Functional Requirement Tender and Installation

emerging analysis specification RFP Key buying decision criteria per
KAM buying process 1 Projects key account
defined

Define Validate pain Influence Drive sales Close,

insights and and potential requirements process or delivery,
KAM sales process challenger areas of and key re-engineer installation KAM sales process activities per
– activities and skills 2 play improvement stakeholders RFP + after sales sales role. Capabilities per role

Verifiable KA agree to Costs of existing Proposal Final order signed Implementation

explore further situation & gains Sales stage validation + roles +
outcomes/gates/non- 3 of new solution
documented with
presented at face-
to-face meeting at
by KA plan accepted by
customer
non-negotiable sales standards
negotiables KA´s figures
KA

KAM management
Coaching to win + sales acceleration
meeting cadence and 4 KAM deal KAM pipeline Weekly KAM + KAM meeting rhythm
behaviour coaching coaching meeting cadence

Valid KAM pipeline and KAM pipeline review and

forecasting 5 performance management

Ensure a transparent opportunity pipelineC at our Key Accounts, and involve senior
! management in strategizing the most vital opportunities

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 WHO HOW WHAT

Elements of a proper KAM operating model

Element 1: KAM sales process closely aligned Element 3: Fixed KAM sales management
with the KA´s buying process, including clearly meeting rhythm ensuring the necessary KAM
defined verifiable outcomes and non- leadership and KA interaction
negotiables for each sales stage

Element 2: Strong transparency pipeline

state overview for each KA used for Element 4: Win rooms, coaching tools and
performance reviews and sales management capabilities facilitating conversations about
coaching – linked to data and intelligence in specific deals and ensuring quality in KA
CRM systems interaction to win more business

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 WHO HOW WHAT

Take a team approach and ensure executive sponsorship

Team leadership – build accountable and aligned KA teams KAM as Trusted Advisors for the customer

Reliable
Trusted
Credibility
Advisor
Intimacy

KAM’s

Set up strong team structure to focus on growth Global and local presence - mirror customer structure

KA Steering team (with executive sponsor)

KA Development team

KA Operations team

Establish a “mirror” structure of the Key Account, and make sure to avoid that local
! incentives becomes a barrier to Key Account Development

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 WHO HOW WHAT

Survey results

Value proposition and proactive selling

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
Average:
quantifiable value propositions to the KA
2.8
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

Non-existent Poor Average Good Excellent

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 WHO HOW WHAT

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

1 todays operational work?

2 How to ensure a smooth information gathering?

How to “translate” the operational information into

3 commercial insight that can be shared with the Key
Account?

Ensure a full updated overview of operational performance, and establish a culture where
! all Key Account facing staff is looking for growth opportunities

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 WHO HOW WHAT

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, Make sure that your key account managers are able to challenge
resonate with the customer and can be substantiated customers and reframe the customers perspectives on own business

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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