A Competence-Based Analysis of Key Account Management

Transcription

1 5 International Conference on Competence Based Management Helsinki University of Technology A Competence-Based Analysis of Key Account Management Implications for a Customer-focused Organization Drs. Ir. Derrick-Philippe GOSSELIN Prof. Dr. Aimé HEENE GHENT UNIVERSITY Page 1

2 Content Problem statement Context Definition of Key account management Strategic account & strategic account management Competence perspective on account management Agenda for further research Conclusions Page 2

3 Problem Statement: What Do We Know? (1) Relationship is key in marketing to industrial markets Competence is key to create a competitive advantage and to build strategic relationships in industrial markets Industrial markets: pareto distribution of customers Hypercompetition is changing nature of relationships Limited research on relationship building with key accounts in industrial markets No research on impact of competences applied to key account management Key account management is ill defined and under researched, leading to confusion, ineffectiveness and lost of Competitiveness Page 3

4 Problem Statement: What We Don t Know (2) Some basic research questions remain unanswered: What is the nature of a key account management process:! Sales driven? To manage the sales activities towards important customers?! Marketing driven? focus on relationship building and value creation in order to create a competitive advantage?! Strategy driven? To manage a portfolio of strategic well selected customers based on competence leverage together with the customer? Is it profitable to build a relationship with a customer? Page 4

5 Context: Why Is It Important? (1) Key account management emerged in the 1970 in the US because of environmental changes which are still valid today:! Increased concentration of buying companies! Increased geographic dispersion of buyers of same company! Increased presure on costs and communication! Increased desire to develop partnerships! Increased complexity of buyers operation Assign one person: Key account manager to handle interface with customer from a sales point of view. Page 5

6 Context:why Will It Become More Important? (2) Importance of key account management will continue to increase because of 5 forces: Globalisation Maturity of Industrial Markets Importance of Key account management Industry Structure Increase in Buying Power Technology ICT Page 6

7 Definition of Key Account & Key Account Management (1) Important Customer (1982) (1982) GLOBAL STRATEGIC ACCOUNT (1999) Large, Big Big Major Account (1976) Strategic Account ( ) KEY CLIENT National (1992) Account (1980) International Account (1994) (1994) Multinational Account (1998) Worldwide Account (1998) Global Global Key Key Account Account (1996) (1996) Are those different names for the same phenomena? Page 7

8 Definition of Key Account & Key Account Management (2) There is no concensus on the definitions but 3 main ideas can be found about all key account definitions proposed in literature:! Commercial focus: key accounts are customers representing a large potential or actual sales volume as well in money terms as in percentage of the total revenues. Sometimes they are the most profitable customers! Relational focus: key accounts expect special treatment and services: inventory management, logistic support, special prices, special reporting and customer specific applications and solutions. Key accounts will centralise the purchase from different geographic area s s and will involve different departments and different skills! Strategic marketing focus: key accounts can be selected because of their status, marktleaderposition, to open new markets, as ref. To open new markets, for diversification, technological leadership, because they will invest, technological leadership, Faculty of Economics and because Business Administration they will invest, Page 8

9 Definition of Key Account & Key Account Management (3) Geography Global International Regional/National Local Relationship Marketing Driven Sales Driven Supplier Customer Focus Strategy Driven Approach Definitions on Key Account are dealing with Local or International orientation, Supplier Focused and have a Sales or Relationship Approach. Page 9

10 Definition of Key Account & Key Account Management (4) Confusion on account management is due to non recognition of 3 different processes PROCES FOCUS Local Regional National Inter national Global Key Account Selling Sales Management Scope Time Focus Key Account Management Strategic Account Management Relationship Management Strategic Management Complexity Page 10

11 Definition of Key Account & Key Account Management (5) We believe there are 3 different processes at work which are not identified as such in practice, creating a lot of confusion, mismanagement and failures. Process Nature Objective Behaviour Time Focus Key Account Selling Performance Defensive Static/supplier driven Short term Sales Key Account Management Coordination /Relational Offensive Static/supplier driven Mid term Marketing Strategic Account Management Competitive advantage Proactive Dynamic interactive Long Term Strategic Page 11

12 Proposed Definition for a Strategic Account Strategic accounts are potential or existing customers identified by the supplier based on strategic criteria and for which the supplier has indications that he is of strategic importance for the customer as well. Key Accounts Non-Strategic Suppliers for the Customer Potential Accounts Existing/Potential Strategic Suppliers for the Customer SUPPLIER Strategic Accounts CUSTOMER Page 12

13 Competence Perspective Resources Structure Processes Competence Building Strategic account Management Stakeholders Development Competence Leverage Key Account Value Distribution Value Creation Products Services Solutions Customer Value Profit Cash Flow Firm Value Value Capturing Key account selling Page 13

14 Proposed Definition for Strategic Account Management Strategic account management is the process that identifies and selects strategic accounts and develops thru competence building and leverage a set of specific and unique value propositions in partnership with a strategic account Strategic Process (Competitive advantage) Business Development Process (Proactive) Competences of Strategic Account Manager and Organisation (Competence driven) Selection Process of StrategicAccounts (Portfolio/Resources) Organizational impact: Change Management Interaction with other functional departements (Competence Building and Leverage) Page 14

15 Agenda for Further Research How to select strategic accounts? What are customer strategic indications for partnerships? How to approach proactively strategic accounts? How to select/train and pay strategic account managers? What development methodology is applicable for strategic account management? How to calculate the ROI of competence build up with strategic accounts? What is the role of top management in this process? What are the key elements of a competitive advantage with strategic accounts What KPI should be used to measure strategic account managers? Page 15

16 Conclusion Strategic account management is a different process compared to key account management or key account selling Its nature is more strategic, interactive, dynamic, proactive and competence driven than a sales or marketing process We believe that building a customer focused organisation in order to achieve a competitive advantage in global (hypercompetition) industrial markets will imply to manage a customerbase thru strategic account management We believe that the process of selecting strategic accounts based on a competence building and leverage will be at the core of the process. Reseach has only started on strategic account management Page 16

17 Further Information Copies of these sildes as well as more information on strategic account management can be found on: Or Page 17