Strategic Key Account Planning
SKAP, or Strategic Key Account Planning will enable general management, sales management and account executives to develop a comprehensive and measurable plan that will facilitate the development of relationships that identify, develop, win and keep business.
Clearly however, the first step is to identify just what characteristics are present in a “strategically important’ customer. Rarely will it be the top 10 customers, you need to look forward and determine who might be your top customers in 3-5 years, and work on them.
There is a fundamental assumption made that has held true of the 20 years I have been working with businesses developing ‘SKAP’, that there are only three ways you can effectively sell a product in B2B situations. You can work with your customer to:
- Increase their sales
- Reduce their costs
- Increase their productivity.
In one way or another, every consideration from IT implementations to OH&S come under one or more of these three headlines.
To sell in the competitive and digitised markets we now compete in, you need to be delivering on at least two of these fronts to be able to win a competitive situation, and three is geometrically better than just two.
The size and nature of the business does not matter much, any B2B oriented business can benefit by an intelligent SKAP process.
There are a number of elements that build on each other, all contributing to the picture of the manner in which you can approach the delivery of your value proposition to a potential and ongoing customer.
Of vital importance is to be able to see the customer’s problems and opportunities through their eyes. To do that you need detailed intelligence of the customers and their competitive environment
There are a number of areas of information; usually it takes an upfront effort followed by an incremental building of intelligence as the relationship develops. The more input the customer has to the process, the better. Developing a SKAP in collaboration with a customer is the ideal situation.
The information needs fall into a number of areas.
Corporate information.
- Ownership
- Key personnel
- Business processes such as purchasing, capital allocation and budgeting
- Organisation structure
- Informal communication and power structures
- Operating mechanisms, such as sites, internal communication systems.
Competitive information
- Primary competitors and relative strengths
- Key markets & profit pools
- Collaborators
- Relative strength of their value proposition
- Trends and regulations impacting the business
- Business model
Operational information
- Mechanics of their business model
- Personnel Capabilities in key areas
- Operational capabilities & processes
- Financial management
- Product development capabilities and processes
Market operations
- Sales and marketing processes
- Key customers
- Share of wallet
- key competitors
Customer SWOT
A SWOT analysis is usually very useful way of identifying and prioritising opportunities and threats faced by the potential customer. Looking at their market from their perspective is a vital ingredient in a successful sales effort.
Account plan
With all the above information in place, you can develop an account plan that details the activities
- Objectives
- Issues
- Actions to be taken, by whom, by when
- Expected outcomes of each action and follow up sequences
None of this is easy, or to be undertaken lightly, as there is an opportunity cost in the allocation of scarce resources. When you need a bit of help, call me.
Thanks Col.
Revenue is always the starting point in the process, but rarely the finishing point.
As a strategist, it is really important to rub the crystals and figure out what the drivers of success will be in a year, 2 years, 5 years, and find a few customers, either new ones, or those who are insignificant revenue-wise currently, and grow with them, learn from them.
That is what makes the strategically important, rather than just financially important.
From time to time this has been a challenging notion to sell.
I also introduce the idea of aligned values in the mix. When there is alignment, things are aleays easier.
I agree Colin, without Alignment of values, strategy, and objectives you have at best disorganization and waste, and it is essential at every level of activity.
At the customer planning level, the customers you choose to invest the resources to create a strategic customer plan and then importantly execute on it and complete the loop by learning needs too be not just aligned at that level but at the higher level to the overall strategic plan and objectives.
Alignment has become a bit of a cliche, but in reality is a profoundly important foundation of any organisaton.
Very nice coverage Allen. Thankyou for sharing. The eye opener for those attending my KAM workshops is around criteria for identifying who they should be. Most simply look at revenues, and they are rarely a good fit for a more strategic relationship.