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

401 Pages·2008·2.68 MB·English

by  Peter Cheverton

KeyAccountManage aw.qxd:Layout 1 2/4/08 17:48 Page 1
4th
“The essential guide to global best practice”
“A combination of clarity, enthusiasm, and common sense… reading this is a rewarding experience.” edition
Professor Malcolm McDonald, Cranfield School of Management
K WINNING BUSINESS
“Will help any business focus sales activities where they matter…
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this is the essential guide to global best practice.”
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Winning Business
KE Y ACCOUNT
“This accessible book on key account management provides a great deal of food for thought.” A
Sales Force
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“Peter has helped us build strong relationships with major clients by implementing the kind of KAM strategies
outlined in this excellent book.” O
Johan Elink Schuurman, Quest International, Director, Management Training
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MANAGEMENT
“Provides a good overview of analytical tools, sound advice on strategy, timely warnings and even planning N
tools… getAbstract.comhighly recommends this book to anyone with an interest in key corporate sales.”
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www.getAbstract.com

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Any organization’s key accounts are its lifeblood. Key Account Management, the definitive work on the subject,
puts forward a unique yet simple planning methodology for identifying, obtaining, retaining and developing key
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customers. TOOLS AND TECHNIQUES FOR ACHIEVING
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This is one of very few books to take a long-term, team-selling strategic view of Key Account Management
G PROFITABLE KEY SUPPLIER STATUS
(KAM). Apart from finding great resonance with business practitioners all over the world, Key Account
Managementhas established itself on many academic reading lists. Completely revised and updated with lots E
of new material to reflect the latest best practice, this fourth edition will reinforce its standing as the premier
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book on the subject.
4th edition
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This new edition also features online key account selection and planning tools.
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Peter Chevertonis Director of Insight Marketing & People, now established as the
leading international training and consultancy firm in KAM implementation. It works
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in more than 30 countries including Australia, Austria, Belgium, Brazil, Canada, China,
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Denmark, France, Germany, Holland, Hong Kong, India, Italy, Malaysia, Mexico, T
Poland, Russia, Singapore, South Africa, Sweden, Switzerland, Taiwan, the United E
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Kingdom and the United States, and its client list includes some of the world’s major

blue-chip companies. He is also the author of Key Marketing Skillsand Global C
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Account Management (both published by Kogan Page).
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PETER CHEVERTON
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£30.00
ISBN: 978-0-7494-5277-3 N
US $60.00
Includes online key account selection and planning tools
Kogan Page Kogan Page US
120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA 19147
United Kingdom USA
www.koganpage.com Marketing
KE Y ACCOUNT
MANAGEMENT
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For free online support material please go to the Kogan Page website:
www.koganpage.com/kam
Password:KAM52773
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KE Y ACCOUNT
MANAGEMENT
TOOLS AND TECHNIQUES FOR ACHIEVING
PROFITABLE KEY SUPPLIER STATUS
4th edition
PETER CHEVERTON
London and Philadelphia
iii
Publisher's note
Every possible effort has been made to ensure that the information contained in
this book is accurate at the time of going to press, and the publishers and authors cannot
accept responsibility for any errors or omissions, however caused. No responsibility for loss
or damage occasioned to any person acting, or refraining from action, as a result of the
material in this publication can be accepted by the editor, the publisher or any of the authors
First published in Great Britain in 1999 by Kogan Page Limited
Second edition 2001
Third edition published in Great Britain and the United States in 2004
Fourth edition 2008
Apart from any fair dealing for the purposes of research or private study, or criticism or
review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may
only be reproduced, stored or transmitted, in any form or by any means, with the prior
permission in writing of the publishers, or in the case of reprographic reproduction in
accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction
outside these terms should be sent to the publishers at the undermentioned addresses:
120 Pentonville Road 525 South 4th Street, #241
London N1 9JN Philadelphia PA19147
UK USA
www.koganpage.com
© Peter Cheverton, 1999, 2001, 2004, 2008
The right of Peter Cheverton to be identified as the author of this work has been asserted by him
in accordance with the Copyright, Designs and Patents Act 1988.
ISBN 978 0 7494 5277 3
British Library Cataloguing-in-Publication Data
ACIPrecord for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Cheverton, Peter.
Key account management : a complete action kit of tools and techniques
for achieving profitable key supplier status / Peter Cheverton.-- 4th ed.
p. cm.
Includes bibliographical references and index.
ISBN 0-7494-5277-3
1. Selling--Key accounts. 2. Marketing--Key accounts. 3. Customer
services. I. Title.
HF5438.8.K48C47 2008
658.8'04--dc22
2008003543
Typeset by Saxon Graphics Ltd, Derby
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
iv
Contents
Foreword by Professor Malcolm McDonald x
Acknowledgements xii
Preface xiii
Preface to the fourth edition xiv
About the author xv
And it was all going so very well… xvi
PART I DEFINITIONS AND PURPOSE 1
1. The challenge 3
Strategy or tactics? 5
2. Why Key Account Management: aggressive or defensive? 8
The journey 8; The reasons 9; Your own journey 12;
The rewards 13; Application exercise 15
3. What is a key account? An investment 16
The perils of ‘sizeism’ 17; The investment 20;
Does everybody know? 21; Application exercise 22
4. What is Key Account Management? 23
What’s in a word? 23; Managing the future 23;
Where to start? 24; The importance of balance 25; Guessing,
or making the future? 28; Sanity checks 28; Aworking
definition 30; The KAM model 31; Application exercise 33
v
Contents
PART II ANALYSIS: OPPORTUNITY AND VALUE 35
5. Knowing the market, knowing your value 37
The opportunity chain 37; Complex networks 46;
Application exercise 51
6. Knowing the people, knowing your value 52
The ‘opportunity snail’ 52; Penetrating the snail 55;
Putting ‘chains’ and ‘snails’ together 59; Application exercise 61
PART III RELATIONSHIP MANAGEMENT 63
7. From ‘bow-ties’to ‘diamonds’ 65
Three approaches to selling 67; The KAM journey 71;
Charting the course 74; Application exercise 90
8. Contact strategies 91
The customer’s decision-making process 92; The customer’s DMU
(decision-making unit) 93; The analytical tools in the DMU toolkit 94;
Using the tools in practice 105; The action tools in the DMU toolkit 108;
Application exercise 113
9. The human factor 114
Logic or emotion? 115; Building rapport 116; Application exercise 120
10. The good, the bad, the sad and the ugly 121
The bad story 121; The sad story 123; The ugly story 124;
Hindsight, or foresight? 126; The good story 126;
The second good story 127; Application exercise 129
PART IV ACHIEVING KEY SUPPLIER STATUS 131
11. The purchasing revolution 133
What’s in a name? 134; Reasons for the ‘purchasing revolution’ 137;
Application exercise 140
12. Supply chain management: seeking value 141
Escaping price… embracing value 143; Escaping the limitations
of the ‘snail’ 145; Application exercise 148
13. Purchasing organization: rationalization and centralization 149
Supplier rationalization 150; Centralization of the purchasing
organization 152; Rationalization and centralization: is it good
for us? 157; Application exercise 159
vi
Contents
14. Supplier positioning: managing suppliers 160
Making time to manage suppliers 160; Supplier positioning
models 161; Using the analysis 163; Why measure spend? 164;
Why measure risk/significance? 166; Managing suppliers 167;
Positioning is one thing – but life goes on 177; Behave appropriately,
but plan your escape 178; Application exercise 180
PART V ACHIEVING STRATEGIC SUPPLIER STATUS 181
15. Being of strategic value 183
Times change 183; When customers ‘snap’ 184;
When customers merge 186; Being of strategic value 186;
The diagnostic toolkit 189; Application exercise 191
16. How are they growing? 192
Growth and risk 192; Growth and the product life cycle
(PLC) 196; Application exercise 201
17. How do they aim to win? 202
Porter and competitive advantage 202; The customer’s
money-making-logic 205; Application exercise 207
18. What drives them? 208
Value drivers 208; Implications for the would-be strategic supplier 210;
Identifying the drivers 211; The cultural match 214; Application
exercise 216
19. Ashared future? 217
The shared-future analysis 217; The competition 221;
Application exercise 223
PART VI THE VALUE PROPOSITION 225
20. The customer’s total business experience 227
Identifying the customer’s TBE (total business experience) 229;
Application exercise 235
21. The customer’s activity cycle 236
Completing the exercise 239; Involving the team 242;
Involving the customer 242; The activity cycle in practice 243;
Application exercise 247
22. Measuring the value 248
Using the right language 249; Understanding the circumstances 249;
Understanding the cost in use 250; Providing the measure 250;
Application exercise 252
vii
Contents
23. Making the proposal 253
Managing change 253; The proposal analysis 255; The ‘CICS’
questioning strategy 257; Application exercise 259
PART VII TARGETING: CUSTOMER CLASSIFICATION AND
DISTINCTION 261
24. Customer classification 263
Steps 1 and 2: Objectives and market segmentation 265; Step 3:
Assemble the classification and selection team 267; Step 4: The ‘KAISM’:
classifying your customers 269; Step 4.i: Customer attractiveness
factors 276; Step 4.ii: Relative strength factors 280; Completing the
analysis 281; Key accounts and multiple business unit suppliers 284;
Should we tell the customer? 285; Application exercise 286
25. Customer distinction 287
Step 5: Customer distinction strategies 287; Step 6: Communication,
alignment and implementation 293; Application exercise 294
PART VIII MAKING IT HAPPEN: PREPARING FOR KAM 295
26. Sins and requirements 297
The sins 297; The requirements: making it happen299;
Application exercise 301
27. Leadership and organization 302
Leadership: managing change 302; Organization and structure 309;
Application exercise 315
28. The skills required 316
Team leadership 318; Coaching 324; Political entrepreneurship 326;
Some frequently asked questions 326; The wider team’s skills 330;
Application exercise 332
29. IT systems 333
Too little or too much? 333; The vital requirements 334;
CRM: curse or saviour? 335; Application exercise 341
30. Measuring customer profitability 342
Four ‘almost truths’ of customer profitability 343; Giving discounts
for volume 347; Measuring profit after allcosts 348;
Application exercise 353
viii
Contents
31. The key account plan 354
The purpose of the plan 354; Akey account plan template? 355;
Some ‘must haves’ 357; Asample running order 359;
Sharing it with the customer? 361; Luck or judgement? 361;
Afew last tips 362; Application exercise 363
32. Tracking progress 364
Measuring the tangibles 365; Measuring the intangibles? 366;
Comparing key accounts? 366; Measuring the implementation
of KAM 367; The performance map 367; The KAM ‘health check’ 369;
How will you know when you get there? 370; Application exercise 371
33. Getting further help 372
The weblink 373; The INSIGHT KAM training programme 373;
The global challenge 373; Further reading 374
Index 375
ix