IN TODAY'S highly competitive markets, more companies realise that building strong relationships with key customers is crucial to their success.
It is the quality of the relationship that guarantees consistent and predictable business from any customer. Company executives today need to learn how to make the account strategies work. Here are few areas to explore and stay ahead of competitors.
1. Building long-term relationships
Key customers are aware of their contribution to your revenues and how their decisions affect your bottom-line. Pareto analysis, a statistical technique in decision making, could be the simplest way to segment your key accounts. It also links your business risk to the quality of relationships with them.
Quality, service, flexibility, delivery and cost could be the reasons why regular customers keep coming back. However, you cannot rely only on these factors to retain a customer in the future because competitors are driving equally aggressive and innovative strategies to break into your key accounts.
Your key accounts are vulnerable to competition, so take responsibility to give them the service they need. It is more important to take a long-term strategic approach than to focus on short-term gains. Key account management (KAM) is a relationship-building process, and not just another sale.
2. Speak the customers' language
It is imperative to listen carefully and speak your customers' language. You have to provide them with more support than just offering your products. It is your liability if the goods are accumulating in a distributor's warehouse instead of being consumed by the market.
You need to gain in-depth information about your customers' business, their market trends, their competition, their business model, their concerns, their strategy and their view of you as a supplier. Work closely with your key accounts to build trust and confidence. Also ensure that you resolve problems without damaging the relationship.
3. Bring the right team together
It is vital to keep customers updated at all levels by communicating effectively and efficiently with them. Identify a cross functional team that interacts with the customers' organisation through its departments like finance, logistics and customer service.
A well-balanced team can support customer demands and provide excellent service. It is also important to have a single point of contact for the key account, usually a key account manager, who is supported and kept up to date by this team.
It is equally important to identify the important figures in your customer's team; knowing the role each plays can help you form your customer strategy and plan relationship building activities too.
The sponsor: This could be a senior executive and key decision maker who has the influence, authority and power to approve your strategy. He may not be technically inclined and may rely on his experts for recommendation.
Anti-sponsor: Like the sponsor, this executive will also have high levels of authority and/or influence in the organisation and will not support you and your strategy.
The partner/coach: One of the most important players in your account strategy, this person has credibility with other senior executives throughout your customer's organisation and is willing to support and promote you.
Key players: These executives may not directly be involved in approving your deal but they do have credibility, authority and/or influence and therefore are important to your overall customer strategy.
4. Establish the KAM process
A systematic approach to account planning is vital in analysing information and creating business opportunities. Follow these four basic steps to manage your account planning process:
(a) Analyse your current situation
Gain market intelligence. Include competitors' strategies, market share and business environment. Note your performance and competitors' performance in the key account. Identify your team and relationship index on a scale of 1 to 5 with the customer.
(b) Analyse customers' current situation
Collect details of the customers' team, their buying segment and your share in it, competition, strategy, market trend and concerns. Collate all this information in a simple template for reference.
(c) Where can you add value?
During the analysis, identify issues where your expertise would be most valuable to the customer. Solutions selling and new opportunity identification is the net result. It helps in preparing the action plan and positioning yourself better.
(d) Share it with your customers
Share the account plan with your customers as their views are critical to your success. Modify plans accordingly and share them regularly to meet market demands.
The successful execution of the plan builds your customers' confidence in your organisation. It helps in securing a sustainable and predictable business, resulting in better planning and future growth.