Key Account Management: Tools and Techniques for Achieving Profitable Key Supplier Status

530 Pages·2015·5.77 MB·English

by  Peter Cheverton

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© Peter Cheverton, 1999, 2001, 2004, 2008, 2012, 2015
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Contents
About the author
Foreword by Professor Malcolm McDonald
Preface
Preface to the sixth edition
Acknowledgements
And it was all going so very well…
Part One Definitions and purpose
01 The key account approach
02 Why Key Account Management?
03 The spectrum of KAM ambition
04 What is a key account?
05 What is Key Account Management?
Part Two Analysis: opportunity and value
06 Knowing the market, knowing your value
07 Knowing the people, knowing your value
Part Three Relationship management
08 From ‘bow-ties’ to ‘diamonds’
09 Decision mapping and contact strategies
10 The good, the bad, the sad and the ugly
Part Four Achieving key supplier status
11 The purchasing revolution
12 Supply chain management: seeking value
13 Purchasing organization: rationalization and centralization
14 Supplier positioning: managing suppliers
Part Five Achieving strategic supplier status
15 Being of strategic value
16 How do they plan to grow?
17 How do they aim to win?
18 What drives them?
19 A shared future?
Part Six The value proposition
20 The customer’s total business experience
21 The customer’s activity cycle
22 Measuring the value – securing the reward
23 Making the proposal
Part Seven Planning and joint planning
24 The key account plan
25 Joint planning
Part Eight Targeting
26 Customer classification
27 Customer distinction
28 Global Account Management
Part Nine Making it happen
29 Sins and requirements
30 Leadership and organization
31 Skills, attitudes and behaviours
32 The role of information technology
33 Measuring customer profitability
34 The implementation plan
35 Training and further help
Index

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About the Author
Peter Cheverton is a founding director of INSIGHT Marketing and People, a
global training and consultancy firm specializing in Key and Global Key
Account Management. He has developed an international reputation as one of
the leading experts in this challenging area, working ‘hands on’ with clients
around the world, in industries as diverse as specialty chemicals, healthcare and
pharmaceuticals, FMCG, retail, automotive, financial services, IT, packaging,
and transport, helping them with the implementation of their tailored KAM
strategies.
As well as working directly with clients ‘in house’, Peter regularly presents
INSIGHT’s Key Account Management Masterclass in cities around the world,
including London, Aberdeen, Glasgow, Dublin, Paris, Brussels, Barcelona,
Amsterdam, Stockholm, Gothenburg, Oslo, Vienna, Budapest, Prague,
Bucharest, Warsaw, Shanghai, Beijing, Singapore, Kuala Lumpur, Seoul, Tokyo,
Melbourne, Cape Town, Johannesburg, San Paulo, Boston, New York and
Chicago.
He is also the author of Global Account Management, Key Account
Management in Financial Services, Key Marketing Skills, The Value Machine,
and Understanding the Professional Buyer, books used as standard texts by
many international business schools.
Prior to establishing INSIGHT in 1991, Peter was the European sales and
marketing manager for ICI Dulux Paints.
You can contact Peter at [email protected]
Foreword
G
ood books on Key Account Management are rare. One of the reasons for this
lies in the past, in the way that Key Account Management (KAM) has been
defined and described. The past 40 years have been characterized by a view that
KAM is mainly a selling task, albeit at a high level, and that the responsibility
for its implementation rests almost entirely with the sales team.
Yet all our research at Cranfield School of Management indicates that, above
all else, it is this mentality that prevents the forging of mature, trustworthy and
profitable relationships. Key Account Management is not a sales initiative, it is
not something you do to customers, and key account strategies will require the
full support of the business.
Key Account Management is a team effort and, more than that, it is a
business-wide effort. Our research has shown repeatedly that major clients want
more than a sales–buyer interface and they want more than a traditional
salesperson managing the relationship. If suppliers and customers are to forge
significant relationships, as businesses, then both sides must look to new ways of
managing those relationships.
Relationships are at the very heart of KAM. They provide the source of
information and understanding that can be built into added-value activities. They
also provide the foundations for long-term business based on mutual trust and
confidence. If you care about customer retention then you should care about
KAM.
So let’s escape the trap of the last 40 years – KAM is not something we do to
customers, it is something we do with customers, and perhaps the greatest single
motivation for developing Key Account Strategies is that the customer is looking
for new ways of working alongside key suppliers.
Purchasing organizations are looking more and more to the techniques of
supply chain management as a means of prioritizing and managing relationships
with significant suppliers. Those suppliers must respond with customer-sensitive
strategies that will touch on everything from the people involved to the systems
and processes used, and even to the structure and organization of the supplier’s
business.
Key Account Management provides the strategic base, the processes and the
disciplines to handle this situation, alongside those other common challenges –
globalization, market maturity and customer power.
The purpose is clear: the pursuit of competitive advantage. The days are long
gone when major customers would tolerate average, overpriced products and
services. Being a ‘pimply me too’ just won’t work anymore.
Competitive advantage puts you in a position to succeed, but there is more
that you need to do. There is the question of profit. Most companies, if they are
honest, are not able to measure the profitability of their key accounts. Many
companies, once they determine to measure these things, often find their largest
customers to be their least profitable. Very few companies measure the long-
term returns of customer retention – annual results are often all that count. Key
Account Management should be seen as the route to profitable key supplier
status – the challenge of understanding profit must be taken head on. This book
will provide the help required.
Peter Cheverton has used the Cranfield research to great effect. I have worked
closely with him for many years and have respect and admiration for his work as
a trainer and consultant with major clients. The task of implementing Key
Account Strategies is far from easy, and Peter brings a combination of clarity,
experience, enthusiasm and common sense to the task. This book is an excellent
distillation of his experience, building on the Cranfield research and producing
the essential guide to global best practice.
Please be assured that reading this book will be a rewarding experience.
Professor Malcolm McDonald