Supplying the Right Buying Signals (from a Seller’s Perspective)

Richard Drake 3rd March 2015

Hull University

Opening Questions

By a show of hands:

How many people in the room are professional Buyers or Procurement?

How many people in the room are professional Salespeople?

Qualifying Questions

Have to consider company revenue as part, directly or indirectly, of their job?

Have to consider company profit as part, directly or indirectly, of their job?

Have to interact with external companies in their job?

Are driven by KPIs and Performance Metrics in their job?

Buyers have plenty in common with Sellers

Again by a show of hands - How many people in the room:

Agenda

Short Speaker Bio & OSL Consulting (18:00)

Account Management (18:10) References A Basis for Selling Account Types and Behaviours Behaviours that Buyers can Expect Short Group Exercise

Account Planning (18:40) Example Account Plan Key Buying Features of Account Plans Typical Spread of Account Plans

Examples of Buying Excellence (18:50)

Supplying the Right Buying Signals (19:00)

Questions and Further Discussion (19:10)

Current Role: Head of Business Development, OSL ConsultingTotal Career Experience: 17 years

OSL: Head of BD – Vision to enact the sales activity for the growth plans of the companyABB: Sales Team – Sales effectiveness and team revenue growth

Contributed to Pharma sector growth 51% YoYSales Excellence Champion / ISPE ABB Significant Contribution Award

Emerson: Product Manager, AMS Performance ProductsEmerson: Business Support ManagerEmerson: Performance Monitoring (Lead/Senior) EngineerInvensys: SimSci Technical Engineer

ABB Certificate: Manager Development Programme – (pre-MBA)Chartered Chemical Engineer: Newcastle, BEng CEng MIChemE

Background Technical Expertise:Thermodynamic & mathematical modelling, data analysis and interpretation

Paper & Tissue ManufacturingKleenex Double Velvet & Quilted – Chemical Engineer (Newcastle)Zewa Wisch & Weg and Softis – R&D Engineer (Germany)

Richard Drake Biography

• Professional Groups: Outgoing Chair of IChemE Pharma SIG

House Project

Cycling & Motorsport

Rugby League

Some Personal Interests

Buying and Selling is still all about person to person relationships…

So understanding who you work with is an important part of those relationship

Head of Business Development: OSL Consulting

Engineering and Design Consultancy to the Gas, Oil & Energy markets

Established 2005 and privately owned

Highly skilled and qualified engineers, wealth of knowledge

Conceptual engineering to full implementation

Provide innovative technical solutions

Specialist resourcing capability

Head Office & Operations – Hull

Key Operating Hubs - Aberdeen, Great Yarmouth

References for Account Management

Key account management books are certainly worth reading

Some examples of books on the subject are those from Peter Cheverton (pictured below)

Account Management – a Basis for Selling

Bowtie

Fast Forward

Diablo

Diamond

What do the following shapes all have in common?

A: Behaviour Types in Account Management

1-to-1

1-to-Many

Duet

Many-to-Many

Supplier Relative Strength or Attractiveness

Clie

nt

Gro

wth

Po

ten

tial

High

Low High

DevelopmentAccounts

Key Accounts

OpportunisticAccounts

EstablishedAccounts

Account Type Diagram - 4 Sections

Summary:Account Type

Acc Plan Required?

O Opportunistic No

D Development YES (1pg)

K Key YES (5pg)

E Established YES (2pg)

Supplier Relative Strength or Attractiveness

Clie

nt

Gro

wth

Po

ten

tial

High

Low High

DevelopmentAccounts

Key Accounts

OpportunisticAccounts

EstablishedAccounts

2 pg a/c plan

5 pg a/c plan1 pg a/c plan

No a/c plan

Account Type Typically Changes Over Time

Account Type Definition (Opp & Dev)

Opportunistic Account• Can supply and make money• Some proactive sales effort required• Lower expected revenues• Standard margins/Low effort• Relative sales effort <2.5%• Prospected for marketing purposes

• 1-to-1 Account Management Style

Development Account (1pg plan)• Large effort vs return• Pushing to grow further• Potential high revenue growth: 20% pa• Value products and services being sold• Significant sales effort required >15%• Can be regional area selling

– May have more than one site• Should have simple account plan

– Break in and build position• Single service to single offer

• 1-to-1 & 1-to-Many & Duet Account Management Style

Account Type Definition (Key & Est)

Key Account (5pg plan)• Typically buy multiple products or

services• Highly value products and services• Very high growth potential• High level customer engagement• Agreed TCs and price book• Multi-site• V significant Sales effort 30%• Stretch the initial position• Targeting multi-service to multi site

• Duet & Many-to-Many Account Management Style

Established Account (2pg plan)• Further growth limited• Demonstrate care & account

nurturing• Aggressively maintain

position/income• Keep competitors out at all costs• Multi point contact active• Relative Sales effort <5%• Agreed TCs and price book

• 1-to-Many Account Management Style

Behaviours that Buyers can Expect

Supplier Relative Strength or Attractiveness

Clie

nt

Gro

wth

Po

ten

tial

High

Low High

DevelopmentAccounts

Key Accounts

OpportunisticAccounts

EstablishedAccounts

2 pg a/c plan

5 pg a/c plan1 pg a/c plan

No a/c plan

Standard Prices Low number of

contact points Risk of not working in

the past Could have a new

technology? Lots of unknowns

Multiple people in the org know sales person

Considering framework agreements

Offers better ways of doing things & bigger picture

Multiple opportunity

Strategic pricing & framework

Considering market forces and pain/gain share models

Know long term views

Proactively look for value add

Many people known

Long term pricing Will work to

maintain position Might end up

“Opportunistic” if little revenue

Exercise – Define Example Account Type

You’re all going to be salespeople for a moment…

We’ll take 4 well known company names: East Coast Trains / HSBC / Rolls Royce / Apple

Arrange those companies onto the Account Types based upon:-

Exercise 1 – Small IT supply company

Exercise 2 – Large manufacturing company

Once we’ve completed them - we’ll hear a few reasons from the audience

Account Planning

An account plan gives us an insight into the selling/buying interface

Whilst these are a tool for salespeople – the content drives behaviours and what buyers will be offered

Its worth reading some of those behaviours to understand how salespeople are trying to help your business

Personal example: Quick form account plan - Quad chart. Used for account plan review with a team

OVERALL STATUS: Account needs support

Example Account Name #1

Account Manager – Richard Drake

Current Status 1 – Just taken over the account – need to verify existing account plan

Current Status 2 – Good relationships with some contacts Latest Org chart required. Don’t know new ops manager

Current Status 3 – We are on preferred supplier list – how can we offer other products?

Track Record: Engineering Support - Prod #1 and Prod #2

2015 Top 3 Prospects

ProspectName

Product Value £ (% )

QtrDue

Engineering Support 1 Prod #1Continuation

£AA.aa(70%)

Qtr 2

Engineering Support 2 Prod #3 Trial £BB.bb (50%)

Qtr 3

Engineering Support 3 Prod #4 Trial £CC.cc (20%)

Qtr 3

2015 Year End ForecastYTD (£k)Mar 2015

Target (£k)2015

Forecast (£k)2015

£ ~ XX.xx £~ YY.yy £~ ZZ.zz

Account Team and Future ActionsLead Process Eng, Lead Mech Eng, Snr EC&I Eng

Run next account meeting

Follow up customer request to visit (specific topic)

Consider how we can offer extra support

Offer time line to trial of Prod #4

White space analysis

Support Required / Biggest Problem Incumbent has good track record

2015-16 framework agreement needs renewing

0 0

1 5

2 10

3 15

4 20

5 25

Historical Revenue & Profit

£k %

Q4 2013 Q1 2015Q3 2014 Q4 2014Q1 2014 Q2 2014

Key Buying Features of an Account Plan

Any specifics we should be looking out for?

Organogram Any account above opportunistic Who are the people that will benefit - service / technology (etc)

High level Company background What are the values of the business Cost structures / where is value added

Increasing volume Allows more efficient pricing

Multi-site activity Drive an overall price structure Cross site learning – very cheap way to generate ROI Best practice can be adopted easily

Long term benefit analysis Ensure executive teams hear about company improvement & best practice

Typical Spread of Accounts / Plans (%)

Typical spread of where effort is put on generating account plans

Supplier Relative Strength Or Attractiveness

Cu

sto

mer

Gro

wth

Po

ten

tial

High

Low

High

Development Accounts KEY Accounts

Opportunistic Accounts Established Accounts

10

50 20

20

Low

Typical Spread of Accounts / Plans (%)

Account Plan Required

Supplier Relative Strength Or Attractiveness

Cu

sto

mer

Gro

wth

Po

ten

tial

High

Low

High

Development Accounts KEY Accounts

Opportunistic Accounts Established Accounts

10

30

2020

155

Low

Summary: Before % After %

Total Accounts 100 100

Accounts WITH Plans

90 55

Accounts Without Plans

10 45

Account management best practice involves continually assessing accounts and the appropriate behaviours needed for them:

Accounts ‘needing’ plans Bottom half can be reduced

for required account plans Generates more effective use

of the plans in place Creates time for account

meetings and account teams

Examples of Buying Excellence

Good Practice

Example of selling to buyer who explains the longer term process

Search for efficiencies with bigger picture discussion

Asks for value add and how to achieve this

Allows innovation to take place

Prepared to share favourable / less favourable market conditions

Not Good Practice

Example of selling to buyer who only wants discount regardless of volume

Resulting in account type downgrade

Reducing positive behaviours

Not considering the selling process

Blocking discussions with rest of organisation

Supplying the Right Buying Signals

Summary of Good Practice

Look to build relationships – externally and internally

Knowing the selling account type

What behaviours can you expect

Talk about the bigger picture

Support seller’s understanding of your business

Allowing sellers to offer innovative solutions

Share market conditions – both directions

Providing Better Solutions Both Technically & Economically To

Our ClientsThank you for listening…

Any Questions?

OSL Consulting

Engineering and Design Consultancy to the Gas, Oil & Energy markets

Established 2005 and privately owned

Highly skilled and qualified engineers, wealth of knowledge

Conceptual engineering to full implementation

Provide innovative technical solutions

Specialist resourcing capability

Head Office & Operations – Hull

Key Operating Hubs - Aberdeen, Great Yarmouth

OSL Market Sectors

Gas Production and Storage

Oil

LNG

Petrochemical

Low carbon and renewables

Target sectors for the business remain firmly in the energy arena, with gas and oil at the heart of the OSL client base.

OSL Products and Services

Process engineering Rotating equipment design &

operation Conceptual design work Feasibility studies Front End Studies Project development Design and management Provide a team of engineers &

designers

Optimisation and Modelling Detailed Engineering Project Management Technical Assurance Design Review Due Diligence HAZOP, EIA, SIL, COMAH etc RAM, Ops and Maintenance Project Lifecycle Support

OSL bring together skills in process, mechanical and E,C&I engineering. This is balanced with the key operating knowledge of process plant, equipment, its design and operation.

OSL Specialist Resourcing

Specialist permanent gas and oil engineering recruiter

Large network of qualified, proven engineers

Most Engineers are already known to OSL and all are interviewed in advance

Accessible head office technical support

Effective contractor management process

OSL Candidate Management Process First Day Checks > Client/Candidate

First Week and First Month (Key Call)

OSL Commitment to maintain contact

(3-monthly)

Always available to hear from clients at

any time

Transparent and competitive resourcing rates