Key Account Management

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Key Account Management

Marketing and Sales Excellence

Deliver “World Class” Key Account & Territory Management

Knowledge. Experience. Results

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Operating model relationship overview

Key Account Manager

Customer

CompetitionGovernment

Technical Support.

MarketResearch

MarketingProductMgmt

GeneralMgmt

SalesMgmt

TerritoryMgmt

SalesSupport

ProductDevelopment

SupplyChain

HumanResources

Finance

RegionalMgmt

• Trade Shows• Publications• Promotion Material

• Visits• Internet• Phone/Fax

Distribution

Analyzeaccount

Set objectives

Plan strategy

Take action

Reviewaccount

BizDev

Partners

Market Factors

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Key Account Management - best practice actions

Set account objectives

Set account objectives

Plan accountstrategy

Plan accountstrategy Take planned

action

Take planned action

Review account Review account

Analyze Account Analyze Account

Rank accounts on “Improvement Potential” index Re-deploy resources to highest potential channels/accounts

Target category management efforts to accounts with “capability” Understand

account requirements/ needs/ capabilities

Plan account actions to “fix” problem P&L line items

Target account goals/ accountability for profit improvement

Match strategy to “improvement” potential Include customer in account planning

process Develop both internal and customer targets

Tie actions/events to improvement opportunities

Monitor performance against tactical plan

Hold account team members accountable

Tie account team incentives to customer metrics

Reflect “balanced scorecard” in account metrics

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Key Account Management

Process diagrams

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Objective

The principle objective of Key Account Management is to provide the following benefits to the Sales Organization and Customer…..

MARKETING AND SALES

• Improved customer insight• Understanding of customer

needs• Understanding of usage patterns• Better product knowledge• Better access to marketing

material• Better competitor information• Improved performance

information• Measurable goals• Link between Business Plan

strategy and customer strategy

CUSTOMER

• Better product information• Better information on services• Better understanding of

reimbursement• Better product benefits knowledge• Ability to raise individual profile• Increased end users• Provide resource input

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Process Overview Level 1

1Analyze & Classify

Customers

2Key Account Management

3Territory Management

4Management Reporting

5KAM Management and Administration

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1 - Analyze and Classify Customers

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1 - Analyze and Classify Customers Level 2

1.1Identify/AddCustomer/

Modify

1.2Analyze Customer

Details

1.3Segment

Customers

1.4Validate

1.5Identify Key

Accounts

3.3Review

Performance

KA?

Non KAs

KAs

3.1Plan CallActivity

2.1Profile Account

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2 - Key Account Management

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2 - Key Account Management Level 2

2.1Analyze account

2.2Set account objectives

2.3*Create account

plan

2.4Execute plan

1.5Identify Key Accounts

1.2Analyze Customer

Details

2.5*Evaluate account

performance

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Key Account Criteria

Some characteristics defining a Key Account :

Key account classification criteria

• Customers responsible for ( example factor 80%) of revenue

• Customer with over (example factor: $ 1.5 mio) sales

• Customer with potential of (example factor: $1.5 mio. sales within 2 years)

• Customer generating ( example factor: $800’000) profit

• Customer responsible for ( example factor: 2 or more %) of the market in units or value

• Customer with contribution (example factor: > 5%)

• Opinion leader influences ( example factor: 20% )

Account screening criteria

• Ability to sustain long term profitable relationship ($X net over Y years)

• Account values products and services as distinct from competition

• Relationship has strategic value and can create differential advantage by serving the customer

• We can create considerable barrier to entry by serving the customer

• Customer relationship based on more than price negotiation

• Potential for growth greater than the current major clients

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Key Account Based Selling - Advantages

KAM can deliver the following benefits :

Increase sales effectiveness by pursuing high potential accounts and opportunities

Increase market share and revenue within existing accounts

Increase profitability through development of the appropriate product & service offering for the customer.

Provide opportunities to contribute to the success of the customer

Improve customer retention through stronger relationships and increased client satisfaction

Facilitate the allocation of marketing and sales resources

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General information on the accountAccount history

• share of customer• profitability• spending and service requirements• past account plans• product performance• issues• service effort

Classification criteria

2.1 -Analyze Account Level 3

2.1.1Develop / update account profile

2.1.2Assess position

2.1.3Re-evaluate account

classification

2.1.4Complete account

profile

1.5.4Validate Selection and Criteria

2.2.1Define account

strategy

Output

• Business overview of the customer• Understanding of key players and

relationships• Map of influencers• Review of relationship history and

performance of the customer

Input

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2.1 -Analyze Account Level 3

2.1.1Develop / update account profile

2.1.2Assess position

2.1.3Re-evaluate account

classification

2.1.4Complete account

profile

1.5.4Validate Selection and Criteria

2.2.1Define account

strategy

• Rank customers by order of importance, segmentation

• Develop a map to guide networking

• Consider account’s influence / reputation

• Be familiar with account’s business

• Estimate account’s expenditures and constraints

• Consider account’s buying history

• Determine account’s buying cycle• Identify influencers / decision

makers• Identify prospect by product line /

treatment modality ; 3rd party information

• Conduct needs assessment• Identify, probe ,qualify needs /

concerns• Seek alternate sources of

information on the account

• Assess account’s potential / financial viability

• Establish prospect segment / priority

• Identify account’s current situation

• Identify benefits of offering to meet need / opportunities

• Develop and maintain account profiles

• Identify process for product approval

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2.2 - Set account objectives Level 3

2.2.1Define account

strategy

2.2.2Set account goals

2.2.3Establish account

objectives

2.1.4Complete account profile

2.3.1Develop action plan

• Account profile• Company/ Business Unit strategy• Financial targets

Output

Customer strategy• Long- medium -short term• Customer team

Input

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2.2 - Set account objectives Level 3

2.2.1Define account

strategy

2.2.2Set account goals

2.2.3Establish account

objectives

2.1.4Complete account profile

2.3.1Develop action plan

• Define end users of products and services

• Establish selling goals

• Identify growth opportunities

• Identify specific product opportunities

• Look for long range opportunities

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2.3 - Create account plan Level 3

2.2.3Establish account objectives

2.3.1Develop action

plan

2.3.2Determine resource

requirements

2.3.4Finalize & approve

account plans

2.4.1Execute plan

2.3.3Consolidate & assess

account portfolio

• Opportunities identified• Account objectives• Product and service offerings• Customer needs• Critical success factors• Competitive position

Output

• Account plan including actions, resources, responsibilities, timelines, quantitative and qualitative targets and progress measurements for the next period.

• Key account portfolio consolidated

Input

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2.3 - Create account plan Level 32.2.3

Establish account objectives

2.3.1Develop action

plan

2.3.2Determine resource

requirements

2.3.4Finalize& approve

account plans

2.4.1Execute plan

2.3.3Consolidate & assess

account portfolio

• Design call cycle (day, week, month)

• Select appropriate contact method

• Build a regional action plan

• Add customer to call cycle

• Strategic process and position product

• Communicate sales approach to team

• Identify growth opportunities

• Identify specific product opportunities

• Integrate marketing strategy / concept

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2.4 - Execute Account Plan Level 3

2.3.4Finalize & approve

account plans

2.4.1Execute Action Plan

2.4.2Identify new opportunities

2.4.3Modify account plan

2.5.1Measure

performance

• Action plans • Responsibilities• Resources

Output

• New opportunities identified• Actions executed• Results of actions• Customer insight• Market intelligence

Input

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2.4 - Execute Account Plan Level 3

2.3.4Finalize & approve

account plans

2.4.1Execute Action Plan

2.4.2Identify new opportunities

2.4.3Modify account plan

2.5.1Measure

performance

• Demonstrate proof (clinical)• Present clinical information• Refer to other successes -

testimonial• Explain products in terms of

competition, feature benefit selling

• Reassure account of our value• Confirm benefits of offering to

meet needs• Use appropriate selling tools• Gain account agreement• Negotiate order / terms and

conditions• Receive order

• Enter order or recognition of order in system

• Alert account to any changes (reimbursement)

• Resolve disputes• Arbitrate differences, make

adjustments• Assure account satisfaction• Show appreciation of

business• Question all influencers

and decision makers• Grow advocates for

feedback• Reinforce prior purchasing

decisions

• Follow up on plan

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2.5 - Evaluate Account Performance Level 3

2.4.3Modify

account plan

2.5.1Measure

performance

2.5.2Assess plan achievement

2.5.3Evaluate position and account status/ portfolio review

1.2.1Historical

Review

2.1.1Develop / update account profile

2.3.3Review and assess account portfolio

• Results of actions• Cost of actions• Resources consumed• Sales• Cost of goods• Services and goods provided• Promotion effort• Revised targets and budgets

Output

• Assessment of account performance

• Review of the return on the account

• Review of the Key Account portfolio

• Performance rewards

Input

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2.5 - Evaluate Account Performance Level 3

2.4.3Modify

account plan

2.5.1Measure

performance

2.5.2Assess plan achievement

2.5.3Evaluate position and account status/ portfolio review

1.2.1Historical

Review

2.1.1Develop / update account profile

2.3.3Review and assess account portfolio

• Get feed back from account

• Analyze win / loss• Compare

performance against goal

• Benchmark own performance against competition

• Calculate ROI• Review sales

records• Re- evaluate sales

strategy

• Evaluate relationship with account

• Evaluate skills to deal with account

• Build skills

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3 - Territory Management

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3 - Territory Management Level 2

3.1Plan Call Activity

3.2Execute Contact

3.3Review Performance

1.5Identify Key Accounts

1.2Analyze Customer Details

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3.1 - Plan Call Activity Level 3

3.1.5Schedule

Calls

3.1.6OrganizeLogistics

3.3.4Individual

Sales EffectivenessAssessment

3.1.3Review Segment

Strategies &Definitions

3.1.4Define Call

Plan

3.1.1Collect/Review

Customer Information

3.1.2Targeting

ONGOING

ONGOING

Internal SalesInformation

External SalesInformation

FinancialInformation

•Cost•Revenue•Profitability

•Cash sales and volume

•Ex-factory data

3.2.1Preparefor call

3.3.6Change

Process/Plans

1.5.4Validate

Selection andCriteria

Marketing andProduct Strategy

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3.2 - Execute Contact Level 3

3.2.1Prepare

for contact

3.2.2Open

Contact

3.2.4Match

product toneeds

3.2.6Close

Contact

3.2.7Document

Contact

3.2.3Understand

Needs

3.2.5Gain

commit-ment

3.3.4Individual

Sales EffectivenessAssessment

3.1.6OrganizeLogistics

3.3.2Individual analysis of

sales performance data

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3.3 - Review Performance Level 3

3.3.1Management analysis

of sales performance data(including training function)

3.3.4Individual Sales Force

Effectiveness Assessment

3.3.6Change

Process/Plans

3.3.2Individual analysis

of sales performance data

3.3.2Management Sales ForceEffectiveness Assessment

(including training function)

ONGOING

ONGOING

ONGOING

PERIODIC PERIODIC

PERIODIC

3.2.1Preparefor call

3.1.1Review History

and Targets

3.2.7DocumentContact

1.2.1Historical

Review

3.1.4Define CallObjectives

Internal SalesInformation

External SalesInformation

FinancialInformation

•Cost, revenue, profitability•Cash sales and volume

•Ex-factory data

3.3.5Understand linkbetween actionsand performance

PERIODIC

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4 - Management Reporting

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4 - Management Reporting Level 2

4.1Company Information

4.2Marketplace Information

4.3Performance Information

4.4Customer Information

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General requirements of management reporting

GENERAL REQUIREMENTS• Information entered once only (ensures motivation, quality and consistency)• Ability to roll up data at a number of levels (global, national, regional, territory)

Ability to cut information in a number of different ways :•Segment•Therapeutic Area•Region or Territory•Sales Rep.

• Tool to assist in the identification of patterns and trends in large volumes of data• Ability to access specific relevant information (push or pull) as opposed to the

traditional “push” of large volumes of often irrelevant data• Ability to generate standard reports• Flexible and configurable ad-hoc reporting suitable for a wide range of user types• Ability to configure a “favorites” dashboard of reports drawing on standard reports

and ad-hoc reports (either created by the user or by other users)

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4.1 - Company Information Level 3

4.1.1Planning Information

4.1.2Products and Services

.1.3l Information

4.1.4Marketing Materials

•Product Encyclopaedia•Up-to-date Clinical Work•Papers written•New studies (internal and competitor)•Product bebefits (safety profile, efficacy, AEs, price/cost

4.1.5Company Knowledge/News

•Queries from customers•ADRs•Protocol Information•Different Usage patterns

•Company best practice•Newsflashes about events which may impact operations•Ability to share important information across regions - not just vertically

•Details of marketing messages by product and segment•Catalogue of marketing materials•Calendar detailing key events (e.g. launches, new materials, available)•Ability to view availability of incentives (e.g. tickets, conferences, etc.)

•Marketing Plans•Sales Plans•Account Plans•Planned and actual details available•Plans which roll-up at global, country, regional and territory level

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4.2 - Marketplace Information Level 3

4.2.1 Government Policies

•Gguidelines•Reimbursement levels• Budget eligibility

4.2.2Competitor Information

•Marketing messages/materials and recommended response•Competitor strengths and weaknesses by product and segment•Global/country level activity - launches, campaigns, etc.•Account level activity - products offered, share of wallet, incentives, etc.

4.2.3Information

•End user profile•Treatments•Research•Future trends

4.2.4Practice Trends

•Prescribing patterns and trends•Economic and regulatory influencers

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4.3 - Performance Information Level 3

4.3.1Sales Performance

4.3.2Marketing Performance

•Market share by product at (account, territory, region and national levels)•Comparison at these levels to competitor products

4.3.4Financial Performance

•Budget spend against plan (account, territory, region and national levels)•ROI vs. forecast (account, territory, region and national levels)

4.3.5Performance against plan

•Contacts/Calls (actual vs. target)•Monthly actions and objectives (actual vs. target)

4.3.6Incentives Performance

•Individual performance against incentive targets•Percentage contribution (territory, region, etc.)

•Forecast vs. actual vs. target (at account, territory, regional and national levels)•Following planning horizons available : weekly, monthly, quarterly, annually

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4.4 - Customer Information Level 3

4.4.1Demographic Information

•Name, title and role•Account type (e.g. hospital, clinic, GP, etc.)•Size, estimated budget, etc.•Interests and decision drivers of key players at account

4.4.2Contact Information

•Fax•Phone•e-mail•Geographical location (to post code level)

4.4.3Sales history and plan

•Sales by product category over time (historical)•Planned sales by product category (future)

4.5.4Contact history and plan

•Names and roles of person who made contact•Purpose of contact•Results and actions or questions arising•Planned future contacts (when, where, by who, for what)

4.5.5Relationship Profiles

•Relationships within account (influencers, decision makers, etc.)•Relationships between account and external bodies/individuals•Relationships to Customers

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