Key Account Management Accelerate growth within your largest accounts

Commercial Excellence Forum 29th of January 2016

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January 29th 2016

Key Account Management: Accelerate

growth within your largest accounts

April 29th, 2016

Customer Retention

September 30th, 2016

TBD

Commercial Excellence Forum 2016

Planned meetings in 2016

3

Next Commercial Excellence Forum is Friday the 29th of April

The shortcut to growth:

Proactive and reactive customer

retention

Learn about Implements approach to customer

retention

Receive input on how to identify and manage the

most important drivers of customer churn

Get inspiration from companies who have worked

with customer retention and achieved significant

business results as a consequence

Its 5 times more costly to acquire new customers, than to retain current ones

4

Agenda

09:00 Welcome and introduction to the topic of the day

09:15 How to accelerate growth within the largest customers

10:00 Short break and networking

11:00 Implementation of KAM Dilemmas and inspiration

11:40 Wrap-up of the Commercial Excellence Forum event

10:15 Danfoss: Accelerated KAM growth through focused commercial initiative

11:45 Networking and light lunch

RBJ

5

We experience a strong focus on KAM across a wide range of

industries

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Demand for growth

Strategic focus moving from

efficiency and cost-cutting

to revenue growth

Less sales resources to

generate sales we need

to focus even more on the

opportunities we engage

with

Differentiation and focus

on unique value

propositions are

considered as vital, in order

to grow in a very

competitive market

Fierce competition and still

focus on efficiency

Focus on efficiency

customers want

documented value

creation

Focus on less but even

more professional

suppliers

Increased number of

stakeholders involved in

buying process

Centralized purchasing

Why so much focus on Key Account Management now?

Need for a

changed way to

generate growth

on existing key

accounts

RBJ

7

Classic symptoms and challenges when working with Key Account

Management

HOW TO

ORGANIZE

INTERNALLY?

ONLY LITTLE

DIFFERENCE BETWEEN

KEY ACCOUNT

MANAGEMENT AND

THE NORMAL SALES

APPROACH?

WHAT DEFINES

THE KEY

ACCOUNTS?

AND WHY DOES

IT MATTER

THERE IS NO OVERALL KEY

ACCOUNT STRATEGY WHAT

ARE THE AMBITIONS WITH

THE KEY ACCOUNT FOCUS

NO CONSISTENT RESOURCE

ALLOCATION ACROSS

FUNCTIONS, REGIONS AND

ACCOUNTS

DO WE HAVE THE

CAPABILITIES TO

LIVE TIHE KEY

ACCOUNT

MANAGEMENT

AMBITIONS?

NO COMMON UNDERSTANDING

OF WHAT KEY ACCOUNT

MANAGEMENT MEANS

RBJ

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The traditional basis for Key Account Management is changing

Customers ARE different

we cannot use the same

approach for all Key

Accounts

Compliance and

excellent delivery is a

MUST.but is NOT

enough

Increased number of

stakeholders internally

AND externally

KAM

The KAM approach is a company

approach more than a sales

approach

Changed focus

from retention to

growth

Procurement is being

centralized and increase

their professionalism

RBJ

9

and therefore the KAM approach needs to change

Development Key Account Management

RBJ

10

The key question is simple and yet hard

How strong is the growth orientation of your KAM program?

RBJ

11

What is the growth orientation of your KAM strategy and approach?

WHO

Are the accounts

that have a

substantial growth

potential for the

coming years?

HOW

Have you set your

commercial engine

and organization up

for growth?

WHAT

Will be your areas of

growth and how to

build proper value

propositions around

these?

A more growth-oriented KAM approach will answer these vital questions

FAK

12

We have destilled six underlying KAM growth amplifiers

Define

specific

Key

Account

strategy

and plans

Select KAs

based on

performance

AND

potential

Create a

Key

Account

Sales

Operating

Model

Take a

team

approach

and ensure

executive

sponsorship

Leverage

operational

customer

insight

commer-

cially

Challenge

Key

Accounts

with

insights

and KA

specific

value

propo-

sitions

WHO HOW WHAT

FAK

14

Survey results

Key Account selection: We select KAs based on very

thorough objective and measurable performance criteria (KPIs)

such as our current sales, share of wallet, revenue, profit etc.

Key Account selection: We select KAs based on an objective

evaluation of the business potential of the accounts as well as the

product/solution fit and the company's strategic outlook

Key Account portfolio management: We regularly (i.e. at

least yearly) assess the potential of the key accounts and

reprioritize accounts and resources accordingly

Strategic Key Account Plan: We have made a strategic plan

for each KA thats been shared with all relevant internal

stakeholders, all of whom have committed to respective actions.

Understanding of key accounts needs: We meet recurrently

internally to get a common picture of the critical business issues,

the needs and opportunities of our KAs (opportunity coaching).

Stakeholder mapping and development: We recurrently

document and update a detailed overview of the key

stakeholders and the decision process at the KA organisation.

Stakeholder mapping and development: We have a plan for

specific activities targeted towards relevant stakeholders at the

key account organisation.

Joint business planning process: We have established a

process where we engage the main stakeholders of the KA,

sharing critical business issues and ideas for improvement

WHO HOW WHAT

Non-existent

Excellent

Poor

Average

Good

Selecting Key Accounts, pains & needs and strategy

Average:

3.2

15

Evaluate and base your selection of Key Accounts on both performance AND potential

criteria

Future business

potential

Historic

performance

Parameters (examples):

o Revenue (total, per product

group, geographically etc.)

o Profitability (total, per

product group etc.)

o Financial KPIs

Parameters (examples):

o Share of Wallet

o Potential for growth (product

groups, geographical areas

etc.)

o Product/Technology/Company

fit

o Relationships

!

Select Key Accounts based on performance AND potential

WHO HOW WHAT

FAK

16

Define a Key Account specific strategy

Leve

l o

f c

usto

miz

ati

on

Level of integration

Commercial and

technical integration

Commercial

integration

No integration

single products

No

ne

Ve

rtic

al/

se

gm

ent/

indu

str

y

Acco

un

t

WHO HOW WHAT

Choose a specific strategy for each Key Account, and make sure that the Key Account is

willing to the same level of integration and customization like you !

FAK

* Inspired by McKinsey 2003

17

Translate strategy to active Key Account (joint) business plans

1. Understanding the Customer - information and own view of their business

a) What is the Customer's business and position

b) Key challenges and opportunities facing the customers business

2. Current situation with the customers:

a) Current business with the customer

b) Current Relationships with the customer

c) Current strategic and innovation projects with the customer

3. Where do we want to be in the Future?

a) 3 5 year Business ambitions & goals

b) Major issues and key strategic objectives (SWOT and objectives)

c) Strategy to address key strategic issues and reach the goals (MWB)

4. How do we get there?

a) Action plan to achieve goals (overall and per region)

b) Regular following up on Account Plan

Key Account strategy elements

1. Understanding the Customer - information and own view of their business

a) What is the Customer's business and position

b) Key challenges and opportunities facing the customers business

2. Current situation with the customers:

a) Current business with the customer

b) Current Relationships with the customer

c) Current strategic and innovation projects with the customer

3. Where do we want to be in the Future?

a) 3 5 year Business ambitions & goals

b) Major issues and key strategic objectives (SWOT and objectives)

c) Strategy to address key strategic issues and reach the goals (MWB)

4. How do we get there?

a) Action plan to achieve goals (overall and per region)

b) Regular following up on Account Plan

KA joint business plan is mutual and long

term committing to growth

WHO HOW WHAT

Share your plan with the Key Account, and make sure that both parties have assignments

and commitments in the plan !

FAK

18

Deal strategizing: We meet with executive sponsors and

specialists at least quarterly, to give inspiration and strategize on

how to create and win opportunities at the KA

Roles and responsibilities: Executive management actively

participates in ensuring ongoing removal of barriers, endorse KA

initiatives and provides strong senior management sponsorship

Key Account teams: We have a well-defined way of

establishing, organising and running cross functional key

account teams

Key Account teams: All members of KA teams have a clear

understanding of the business with the KA as well as future

initiatives and agreements

Sales Operating Model: We have an updated cross KA

overview of key opportunities, which we actively and regularly

(monthly) discuss at sales management and executive meetings

WHO HOW WHAT

Survey results

Non-existent

Excellent

Poor

Average

Good

Team approach and executive sponsorship

Average:

3.0

19

Costs of existing

situation & gains

of new solution

documented with

KAs figures

KA agree to

explore further

Create a robust KAM Sales operating model

Key buying decision criteria per

key account KAM buying process 1

Needs

emerging

Projects

defined

Functional

analysis

Requirement

specification

Tender and

RFP

Installation

KAM sales process

activities and skills 2 KAM sales process activities per

sales role. Capabilities per role

Influence

requirements

and key

stakeholders

Drive sales

process or

re-engineer

RFP

Close,

delivery,

installation

+ after sales

Verifiable

outcomes/gates/non-

negotiables 3

Sales stage validation + roles +

non-negotiable sales standards

Valid KAM pipeline and

forecasting 5 KAM pipeline review and

performance management

C

KAM management

meeting cadence and

behaviour 4

KAM deal

coaching

KAM pipeline

coaching

Coaching to win + sales acceleration

+ KAM meeting rhythm Weekly KAM meeting cadence

WHO HOW WHAT

Ensure a transparent opportunity pipeline at our Key Accounts, and involve senior

management in strategizing the most vital opportunities !

RBJ

Define

insights and

challenger

play

Validate pain

and potential

areas of

improvement

Proposal

presented at face-

to-face meeting at

KA

Final order signed

by KA

Implementation

plan accepted by

customer

20

Elements of a proper KAM operating model

Element 2: Strong transparency pipeline

state overview for each KA used for

performance reviews and sales management

coaching linked to data and intelligence in

CRM systems

Element 1: KAM sales process closely aligned

with the KAs buying process, including clearly

defined verifiable outcomes and non-

negotiables for each sales stage

Element 3: Fixed KAM sales management

meeting rhythm ensuring the necessary KAM

leadership and KA interaction

Element 4: Win rooms, coaching tools and

capabilities facilitating conversations about

specific deals and ensuring quality in KA

interaction to win more business

WHO HOW WHAT

RBJ

21

Take a team approach and ensure executive sponsorship

Team leadership build accountable and aligned KA teams KAM as Trusted Advisors for the customer

Set up strong team structure to focus on growth Global and local presence - mirror customer structure

KAMs

Reliable

Credibility

Intimacy

Trusted

Advisor

KA Steering team (with executive sponsor)

KA Operations team

KA Development team

WHO HOW WHAT

Establish a mirror structure of the Key Account, and make sure to avoid that local

incentives becomes a barrier to Key Account Development !

RBJ

22

Usage of operational insight: We proactively use insights of

relevance to the KA and their industry to start and develop

conversations on new business opportunities for the KA

Customer specific value propositions: We meet at least

quarterly with relevant internal stakeholders to formulate new

quantifiable value propositions to the KA

Customer specific value propositions: We present value

propositions to the KA, where we document the monetary value

the KA will realize by implementing suggested solution

Proactive approach: We make sure, that we at least every 6

month, challenge the KA with ideas that can improve the KAs

business within a 1-2 year horizon

WHO HOW WHAT

Survey results

Non-existent

Excellent

Poor

Average

Good

Value proposition and proactive selling

Average:

2.8

23

Leverage operational customer insights and capabilities

commercially

Data from the daily operations is a vital source of knowledge, that can be turned into real key account specific insight.

What is the impact of our services delivered today, who are influenced by the problems we solve, and to what extent

can we improve the key accounts business?

What kind of information need to be gathered from

todays operational work? 1

How to ensure a smooth information gathering? 2

How to translate the operational information into

commercial insight that can be shared with the Key

Account? 3

WHO HOW WHAT

Ensure a full updated overview of operational performance, and establish a culture where

all Key Account facing staff is looking for growth opportunities !

FAK

24

Challenge Key Accounts with insights and Key Account specific

value propositions

In order to succeed we need to have clear value propositions, that challenge the customers existing way of doing

business. It is a matter of both what you sell and how you sell it

Make sure that your value propositions are differentiated,

resonate with the customer and can be substantiated

Make sure that your key account managers are able to challenge

customers and reframe the customers perspectives on own business

WHO HOW WHAT

Make sure to develop account specific value propositions, and challenge your Key

Accounts at least quarterly with new perspectives on their own business !

FAK