Getting to Trusted Parner - Optimizing Key Accounts

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WHITE PAPER our thinking..

Getting to Trusted Partner

How organisations can significantly increase revenues byenhanced account management of key clients

White Paper produced by Vista Business Development Consulting(September 2007)


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Synopsis

Many organisations have an impressive client listbut could generate more business and better margin business from their major accounts

The key to unlocking greater account value is toelevate client relationships to a Trusted Partnerlevel through enhanced account management

Organisations can achieve this quickly andinexpensive through a program of strategicAccount Planning and personal development of the Account Management team

As large customers get more demanding, B2B companies need not resignthemselves to taking a beating on price.

Collaborative selling can help companies create and capture more value - but only if they improve their approach to customers, the organization, and

collaborative investments

McKinsey & Co. (Better B2B Selling, June 2005)


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INDEX

Synopsis 2Purpose of this White Paper 4

Management Summary 4

THE BENEFITS 5Positioning to Win 5Realising wider and deeper business growth 6

GETTING TO TRUSTED PARTNER 8

Enhanced Account Planning 9Development of Key Account Management 11

Case Study (Schlumberger Essential 200 Program) 15

About Vista Business Development Consulting 17


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Purpose

This White Paper describes how an enhanced Account Management programme wouldquickly and inexpensively enable your organisation to significantly grow business withexisting key accounts.

This is intended as a briefing document for further discussion.

Management Summary

Your organisation is probably typical of a number of leading global organisations, whoenjoy an impressive, high calibre and loyal client base but are not fully exploiting thishard-earned position to realise significant business growth potential. The large installed

client base of your organisation is probably the envy of many of your competitors andcan be the pre-requisite springboard for creating a higher-level of account-suppler relationship as Trusted Partner.

As a Trusted Partner you would be in a far stronger position to win more business andimprove the business mix within these key accounts. Moreover, cost of sale wouldreduce, further improving margins and you would achieve an unassailable advantageover competitors to sustain this business growth into the future.

This White Paper outlines the benefits of reaching Trusted Partner status and therelatively straightforward and inexpensive road-map to achieve a revenue enhancingTrusted Partner relationship.

Note about the AuthorsVista Business Development Consulting provide business solutions to large multinational organisations. We specialise in the development of strategy and programmes to improvebusiness performance through enhanced Account Management and Sales practices.Supporting this work we develop and deliver senior-level training for account and sales

professionals.More information is included in the final section of this White Paper.


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THE BENEFITS

Being a Trusted Partner of a client is very different to being a supplier, major supplier or business partner. It is difficult to achieve and requires a high degree of maintenance andcommitment. However, the benefits of becoming a Trusted Partner are significant interms of future revenue, margins and operating costs.A majority of clients strongly welcome the opportunity of having a true Trusted Partner.This applies in public and private sectors, from manufacturing to engineering and serviceindustries to outsourcers.

The Trusted Partner role is most commonly associated with consulting organisationswhere leading firms, from McKinsey to Accenture, aim to reach Trusted Partner statuswith their key client accounts. However, any supplier with customer focused values cangrow into a Trusted Partner and reap the enormous resulting benefits.

The wide ranging and long terms benefits of achieving this status are described in thefollowing two sections.

Positioning to Win more often, more profitably and bigger dealsBeing a Trusted Partner with your key accounts means being positioned earlier in their buying cycle.

As Fig 1.1 shows, a Trusted Partner can be part of the client decision making process.This would enable your organisation to lead the client (through Thought Leadership andstrategically planned executive level relationships), to influence their strategic buyingactivity and choices. This position would be enormously powerful in pushing the clienttowards your products and solutions and away from those offered by competitors. This isalso a defensive position as clients have only the capacity for one real Trusted Partner and if your organisation holds this mantle then your competitors cannot.

By engaging earlier with your key accounts you will improve bid success rates andreduce bid costs (by better qualification of opportunities and seeding of client businessdecision making). You will achieve better business deals as price becomes less of an

StrategySetting

InitiateProject

Evaluation of Options

Procurement Implementation

Key Supplier TrustedPartner

Client Buying Process

WHEN DO YOU ENGAGE YOUR CLIENT?

Fig 1.1


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issue for your proposals. Moreover, the close and trusting relationship will ensure higher levels of knowledge transfer and co-ordination to significantly reduce the incidence and costs of problems in the implementation and operating phases.

Realising wider and deeper business growthBy developing a Trusted Partner relationship with your key accounts your organisationunlocks the door to significant business growth within the account. The most obviousarea is in improving your business success by engaging much earlier in the buying cycle(as outlined in the previous section). However, in addition there are other areas offeringexponential growth possibilities within your accounts.

Fig 1.2 demonstrates that in addition to simply Improving the business prospects withinthe client a Trusted Partner can achieve growth through Establishment, Expansion or Diversification strategies. A thorough Account Profiling of each client would identifyhow many of these expansion strategies are attainable.

Establish Strategy refers to your organisation establishing a market for differentprojects, products, services or spares not previously sold into this client. Workingwithin the existing buying centre and in those areas of the client with knowledge of your company you will be able to leverage existing presence to promote a wider and

more profitable product range. A Trusted Partner will be in a position to evaluate thepotential and then execute a sales strategy for establishing the broader marketwithin this client.

Expand Strategy refers to your organisation building relationships in new areas of this clients business to grow the market for the existing projects and PSS offeringscurrently supplied into this account. This expansion could be geographic (e.g. your existing business with a client may only be in Europe yet they have similar

ESTABLISH

IMPROVE EXPAND

DIVERSIFY

Relationship

Existing New

Existing

Business

New

WHERE IS THE CLIENT GROWTH?

Fig 1.2


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operations in AsiaPac) or functional (e.g. you sell into a clients manufacturingfunction but have no footprint in their R&D division).

As a Trusted Partner, in all scenarios, you would have the positioning within theaccount to follow-through an expansionist strategy and open up enormous marketpotential. Clearly, this is also a defensive measure to counter those competitorslooking to do the same from their points of strength.

Diversify Strategy refers to your organisation building relationships in new areas of the clients business (geographic or functional) to market new products and servicesnot currently supplied to this account. Many of your clients are probably unaware of the full depth and scope of your product range and only view your company as aprovider in a particular solution area.

Clearly the diversification strategy is the most challenging of the four but offers thegreatest rewards for those accounts where it can be executed. Apart from theincrease in market potential within an existing client, the diversification strategyreduces your exposure to changes in client purchasing or operating conditions (e.g.your company would be less commercially vulnerable should a client close or selloperations in one geography or functional area where you are a core supplier).

Account Expansion - ConclusionsThe Account Expansion opportunities enabled by elevating your organisation to TrustedPartner with your key clients will differ by account. Each client is unique and only throughrigorous account profiling and planning can you confidently identify which direction eachkey account can be exploited and accordingly set the strategy. However, for your clients(especially those with similarly large-scale and multinational operations) you should beable to find prospects of major growth potential beyond the existingrelationships/business areas.


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GETTING to TRUSTED PARTNER

A strategy to expand the service positioning of a company cannot be achieved without afocused, complementary sales effort (Gartner Dataquest, June 2003)

Your company already enjoys a good client base and healthy level of positioning withkey accounts. As a result, achieving Trusted Partner level with these clients can berelatively straightforward and inexpensive.

Based on our experience from working with large multi-national organisations a TrustedPartner relationship can be attained with key clients. This is achievable through astructured and executive-sponsored program incorporating activities such as enhancedaccount profiling, planning and contact strategy, employing consultative sellingtechniques, development of executive-level relationships, consulting led engagement

and introducing rigorous qualification rationale for all opportunities.

Such a Getting to Trusted Partner program would be structured around two core work-streams;

1. Account Planning Process2. Learning and development of account teams

StrategySetting

InitiateProject

Evaluation of Options

Procurement Implementation

Client Buying Process

POTENTIAL CLIENT ENGAGEMENT

Fig 1.3


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Program Stream 1 - Enhanced Account Planning ProcessAchieving the business benefits resulting from a Trusted Partner relationship requiresrigorous business-level examination of the client and their perception (real and possible)of your company. This is achieved by enhancing your existing Account Planningprocess; forcing a strategic review of the current key accounts, bringing measurableKPIs to assess the business potential and develop the actions to enhance therelationship.

Components of a Successful Account PlanVista Consulting has experience with Account Planning models applied by other multinational organisations who have successfully achieved a Trusted Partner statuswith many key clients. Based on this experience we recommend the followingcomponents as a minimum to realise an effective Account Planning process;

The cornerstone of successful Account Planning is making plans SMART (Specific,Measurable, Achievable, Realistic, Time Based ) with KPIs (Key PerformanceIndicators) that are reviewed and agreed by senior management . For your organisation this would ensure Account Plans become the strategic vehicle todevelop accounts whilst keeping them aligned with corporate strategy.

Inputs to Account Plans must be based on concise, objective, independent and factual data tested by management in structured reviews. In short they will tell the(hard) truth about the relationship and prospects for a client and enable setting of realistic account strategy and objectives. Examples of quality data inputs areaccount business profiles and spend, market trends, assessment of the truecompetitive situation, real and tested client perception of your company etc.

Account Plans are often made without having quality data input or effectivereviews (see Fig 2.1). Reviews that tend to be omitted are typically from senior management (a fundamental requirement to achieve Trusted Partner status)

(1)Quality/Factual

Input

(5)REVIEW

(4)DO

(3)PLAN

(2)THINK

Effective Account Planning .and the key phases which are missed

Fig 2.1


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and from functional peers such as delivery, research or production units whohave a crucial input in determining the achievability of account plans.

A consistent approach to account plans applied throughout the organisation,providing a common internal communication tool. For your organisation this wouldinclude co-ordination with the wider Invensys Group Account Planning processes.

Key Account Managers must have ownership and accountability for the AccountPlan, with responsibility for performance against KPI and control over accountengagement strategy

Commitment of your Senior Management with regular reviews and input into thedevelopment of account objectives, challenging KPIs and playing an active part inthe client engagement strategy

A degree of client engagement in the planning process. Thus, testing theperception of your company through the eyes of your client and building kudos bysharing the Account Planning strategy with them as key partners

An Account Plan must clearly link the engagement, action and developmentstrategies and plans with the expansion strategy and targets .

By developing an Account Planning process which incorporates these components your company would have a structure to ensure Account Plans are working business-plansand avoid the failures often associated with Account Planning. To many organisations,and many Account Managers, Account Plans are little more than a box ticking exercisewith no research or analysis undertaken, no measurable targets and no challenging or strategic input from senior management. In short these Account Plans become inwardlooking and cannot provide the basis for a strategy to realise business potential.

Making this enhanced Account Planning process work in practice will involve a degree of mindset (even cultural) change amongst the Account and Sales teams. This is why webelieve implementation of an enhanced Account Planning process has to be inconjunction with a program of learning and development for the Account Team .(This is described in more detail in the following section).


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Program Stream 2 - Development of Key Account ManagementMaking an enhanced Account Planning process work in practice often involves a degreeof mindset (even cultural) change amongst the Account and Sales teams. As the mostimportant success factor in developing key accounts and delivering the enhanced levelof account planning is the Account Manager it is apparent a development program mustrun parallel to implementation of a new process.

Profile of Key Account ManagersFigure 2.2 shows the profile of Key Account Managers capable of understanding anddelivering the objectives of a Getting to Trusted Partner strategy.

Account Managers require the right mix of business skills and product knowledge. Inorder to achieve enhanced positioning within your key clients and realising the businessgrowth potential your account managers must be capable of :-

Thinking at a Business-LevelHaving the ability to engage at CxO and strategic levels within accounts, to

understand business issues and promote solutions in the context of business/commercial need

Understanding and applying your business strategy into account plans and strategy

Using the wider organisation more effectively. Co-ordinating with functionalareas/geographies to enhance the positioning of your company within the account

Key AccountManager

Profile

BusinessStrategy Tactics

Strategy Tactics

Product/Technolo

KEY ACCOUNT MANAGER PROFILE

Fig 2.2


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Developing strategies to grow the presence of your organisation in the client andexploit your overall strengths

Planning, reporting and operating as a business manager with the responsibility todeliver an account plan/strategy agreed with senior management and accountabilityfor results

Being sufficiently knowledgeable about the products and services of your companyto promote them in the context of business benefits appropriate to their account

Training and Development of Account ManagersIt is often the case that existing key account managers require an element of learningand development to help deliver the Trusted Partner strategy. Account Managers willneed coaching and development to equip them to implement a new account planningapproach and sell more pro-actively at senior levels in the account. A small investment in targeted training and coaching of the account team can deliver significant business benefits in a short time as more effective engagement, planning and strategy grows the account.

Based on our significant experience in the learning & development of account mangerswe recommend the following training program framework. The training clearly mustinvolve tailored courses specific to your company and your (new) Account Planningprocess. To maximise the effectiveness any such training we suggest the content isbased on existing clients and considers live opportunities so the development of enhanced account plans and strategies for their clients commences DURING the trainingcourse.

Outlined overleaf is our suggested profile for Key Account Management training as partof a Getting to Trusted Partner strategy.


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PROFILE - Key Account Management (KAM) Training

Target:Senior/Middle Level Account Managers responsible for major clients (e.g. business top30) targeted as Trusted Partner relationship potential

Objectives:Equip account managers to develop account strategy in line with your businessobjectives through;

improved engagement with their accounts to be more business focused and employa consultative approach to engage at senior levels

improved positioning and greater bidding success by understanding the AccountManagement role and in particular the importance of producing and maintaining astrong Account Plan

improved approach to bidding by better understanding effective qualification, what isneeded to win and how to leverage effective bid management tools

Delegates must leave the course with clear actions to execute NOW onexisting account activities and opportunities.

Content Overview:Area 1 - Business Level engagement (Understanding the customer and their thinking)understanding a consultative approach to sellingapplying consultative selling techniquesselling at CxO Levelidentification and accessing decision makers

Area 2 - Preparation and positioning (Account Planning and effective accountstrategies)roles and responsibilities of Account ManagersAccount Planning Process and how to develop Account PlansAccount expansion strategies (Expand, Establish, Diversity etc)Thought leadership and applying a consulting led approach

Area 3 - Winning (Strategies and tools for finding and winning the right business)Positioning for successful opportunity bidding (getting in early)The customer business/buying processDeveloping the opportunity plan (effective qualification and bid strategy)Winning tools (including an appropriate selection from; competitive analysis, solutionplanning, engagement planning, negotiation skills, contracting etc.)

Features:


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In order to enhance the impact of the Key Account Management training program werecommend you implement a number of specific features;

On-going assessment of the training in the form of follow-up coaching andcontinuous course development

Training supported by KPIs set in advance to assess training effectiveness

Look for flexibility on the delivery mix. The proportion of ILT (Instructor LeadTraining), on the job and pre/post course assignment should be determinedaccording to location/region/account, possibly in consultation with localmanagement.

We strongly promote the input of senior management in course delivery either aspart of the course (for example a timetabled Round Table session or StrategicBriefing) or engaged in a CxO role play exercise or during a mock review of Account Plans. This reinforces the commitment of senior management insupporting a new Account Planning process and the fundamental role of AccountManagers in achieving the Trusted Partner expansion strategy.


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Case Study Schlumberger Essential 200 Account Strategy

BackgroundIn 2003 the technology and products division of Schlumberger (25,000 employees inover 30 locations worldwide, turnover $4bn) established the Essential 200 businessgrowth strategy. This strategy focused on developing the largest 200 accounts throughmore effective Account Management to forge trusted partner relationships

This strategy was the result of an extensive study by Gartner (technology consultinggroup) which identified that Schlumbergers untapped growth potential was within itsexisting client base. The company was not exploiting its strengths, primarily because theorganisation operated in silos by function, product and geography. Each client onlysaw a small part of Schlumberger.

In addition, Schlumberger was consistently losing bids to Accenture and Capgemini, ITService organisations with a particular focus on consultative selling and building Trustedpartner relationships. The E200 strategy would therefore help the business replicate thesuccessful senior and business level engagement strategy of these competitors toremove their advantage (or planned advantage) within key accounts.

How the program workedThe E200 program targeted Account Managers to significantly grow business within their accounts (in particular Global Accounts where Schlumberger had only aregional/national footprint). The program achieved this in three streams of activity;

(1) Implementing a uniform Account Planning Process to replace numerous localprocesses or in some cases no process

(2) Implementing a uniform Bid Management Process (with strong focus on go/nogo qualification, Account Manager accountability in decisions and more effectiveclient engagement during campaigns)

(3) Account Management Training Program to introduce senior-level sellingcapability and coaching in building business relationships.

ResultsWithin 9 months of launching the E200 program Schlumberger had consistent andrealistic account plans for the majority of its key clients. Forecasts and pipeline estimateschanged significantly as a mix of realism and bullish (but challenged) expansion wasbuilt into Account Plans. Some accounts were dropped from the strategic focus whilstothers were given additional resources (particularly the introduction of domainconsultants to support enhanced talk your business engagement) to exploit previouslyunrecognised opportunities.

Within 12 months of launch Schlumberger had opened new business with key clients inmultiple sectors (primarily Energy, Transport and Telecom) delivering a program ROIwithin 1 year of adoption.


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Andrew Young, owner and senior consultant at Vista Business Development Consulting,was part of the Schlumberger Executive Team that built the strategy and delivery of theE200 program. He was fully responsible for the Account Management training programand the global implementation of a new Account Planning & Bid Managementprocesses.


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About Vista Business Development Consulting

Vista Business Development Consulting provides business solutions to large

multinational organisations. We specialise in the development of strategy andprogrammes to improve business performance through enhanced Account Managementand Sales practices. Supporting this work we develop and deliver senior-level training for account and sales professionals.

Company owner and senior consultant Andrew Young is a highly experienced AccountManagement and Sales Professional. He launched Vista Business DevelopmentConsulting in early 2007 after 15 years working for large multinational organisations(Capgemini, Schlumberger, Atos Origin, Sema Group and BR Business Systems) inAccount Management, Business Development, Consulting and Sales Training roles.

Vista Business Development Consulting has a portfolio of 10 framework accountmanagement and business development training courses. We offer a palette of coursecontent enabling clients to meet their own training needs whilst building-in tailoredcontent.

Additionally, we have developed models, tools and processes for Account Management,Account Planning and Bid Management appropriate for large and multinationalorganisations. We offer consulting services for either implementing these models or working with clients to create tailored models.

Vista Business Development Consulting has bases in Europe and the Americas and weoperate on a global basis. We offer services in English and Spanish.

For more information please visit www.vistabusiness.org or contact Andrew Young viaemail or telephone;

Americas / Asia EuropeEmail [email protected] Email [email protected] - +593 4 238 6709 Office - +207 7193 0396Cell - +593 971 38233


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Getting to Trusted Parner - Optimizing Key Accounts

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