We must recognize that we are in Major Account management for the long term. It takes time to manage a Major Account and we will only receive a payback on our investment in time if we can await a long-term result.
In some of the organizations we have worked with this produces a tension, because the whole culture is about creating a short-term sales result in which product and profit are the main drivers and measures of success. We should not underestimate what a challenge Major Account management can be to the corporate culture. It emphasizes relationship more than product, profit more than volume, team more than individual, and long term-more than short-term results. At the same time, the practical short-term realities of business life need to be recognized.
One of the best ways to manage this tension is to appoint someone to act as a mentor, conscience or guide to the account manager and account team. They are not involved in the day-to-day management of the account but are invited in to preview and comment on major proposals and presentations. Their main role is to be involved in reviewing the long-term plan every few months, to ensure that the relationship is as productive as possible and is reflecting the values of the organisation as a whole.
The role of the Major Account Manager is to be responsible for the overall relationship and responsible for drafting the account plan, gaining the agreement and commitment of the team and then monitoring implementation. They influence all those involved in the account to ensure a co-coordinated, synchronized approach.
Major Account Management Involves Relationships – Not Just a Mechanical Approach
Under this heading, we should discuss three main aspects of Major Account management:
- The importance of relationships
- The complexity of relationships
- Mapping relationships
Importance
In Major Account management, it is essential that we manage people as well as processes. And, of course, we must get the product pricing right. We need to be excellent at administration. Our customer service and product range need to be strong. But “people buy from people” and “we are in a people business.” Managing the complex range of relationships within a major account is difficult and demanding, but our ability to manage relationships will define whether or not we sustain success.
Complexity
In a reactive sale, there is only one relationship – that between the seller and the buyer. In Major Accounts, the situation is much more complex. There are often contacts at many levels and many locations. In one Major Account, we have identified 1000 relationships between the account team of ten people and individuals representing the client. But it is not just a problem of number – it is often a problem of politics. Some contacts do not want us to talk to people in other departments or at different levels. It can also be that the complexity is caused by product range – the users of one product rarely speak to the specifiers for another product. And as in any complex relationship, some people will like us more than others. This is to say nothing of inter-departmental tensions. All these factors make Major Account relationships complex – and we need to recognize their complexity.
Mapping
If relationships are important and if relationships are complex, then it is essential that we find a way of mapping, analyzing, planning and monitoring those relationships. Over recent years, we have found that an approach based on the game of chess allows a very practical way of identifying the key issues.
If we can confidently answer these questions and simply and clearly communicate our thinking across the account team, then we will be half-way to success. This approach has provided a common language and way of working across a broad spectrum of organizations,.
It Can Only Be Done with Selected Customers
The final word from this definition is selected. Identifying the right Major Accounts is of critical importance for three main reasons:
- We do not have the resources to treat every customer as a Major Account
- Not every customer wants to be treated as a Major Account
- Selection allows us to prioritize our activities in line with our overall business objectives
Many organizations grade their Major Accounts simply by the size of sales for the year, but the organizations we see that are really moving forward in Major Account management take into account a number of other factors. They also make sure that everybody knows who the Major Accounts are and why they are Major Accounts.
It is important to be rigorous with the selection criteria you use! You will also need to apply some form of weighting to reflect your priorities. The fact that a Major Account does not meet all your criteria will not disqualify it from being a Major Account – it will just need to score higher in other areas to qualify.
On the basis of this scoring, organizations can grade their accounts. They might be Premier, First and Second Division – like a football league; or Gold, Silver and Bronze – like Olympic medals; or First Class, Club Class, Economy and Standby – like an airline. The analogy of an airline is an especially good one, because on one flight you can have people on standby being entirely happy with the service they are getting, even though they know there are others enjoying “better” service in Club Class. Grading your accounts is not a matter of giving some customers better or worse service. But it is a matter of giving all your customers appropriate service. When we select our Major Accounts and consistently deliver what we promise, we are professionally and effectively managing our accounts.
In Summary, Success Factors in Major Account Management
Successful development of the role:
- Effective working relationships with other members of the team
- A continuing drive to improve account team productivity
- Management commitment to the account team’s role, with opportunities for career progression
- Re-enforcement of the role through authorized career structures, job descriptions and core training programmes
The Key Skills
- Understanding the financial and legal requirements of the account
- Understanding of the company’s business objectives
- Understanding of the company’s commercial policies
- Build high levels of product awareness
- Understanding of the customer’s business objectives
- Identify the decision makers
- Understand the customer’s purchasing strategy
- Assess competitive activities
- Put together an account development plan
- Ensure effective sales order processing
- Build the right levels of revenue and profitability
The Core Skills
- Delegation
- Interpersonal skills
- Consultancy
- Financial control and analysis
- Project management
- Personnel management
- Initiative and creativity
The Secondary Skills
- Industry knowledge
- Competitive knowledge
- Product knowledge, etc.
Success Factors in Major Account Development
The Stages of a Long-term Process:
- Pre-sales
- Contract negotiation
- Implementation / Delivery
- Review
- Exploitation
Objectives for a Major Account Team
- Ensure that the customer is presented with a coherent and professional image of your company as a business partner.
- Secure a long-term business relationship with the customer as the basis for growing business.
- Penetrate the customer’s organization and decision-making unit, creating new opportunities that may be exploited to accelerate account growth.
- Understand and document, on an ongoing basis, the customer’s strategic business direction and organisation.
- Provide the company’s senior management team with feedback on the long-term growth potential in the customer’s market sector and on critical success factors for exploiting it.
- Ensure that the company’s solutions are technically solid and based on a proper understanding of the current requirements and re-enforce the customer’s perception of the benefits of the company’s market focus.
- Ensure that the company’s total resource is delivered in a way that satisfies customer requirements and supports the objectives of the account plan.
Conclusion
An effective Major Account management strategy depends on intelligently selecting your Major Accounts, creating a strong, consistent, flexible way of working with both Major Accounts and other customers, and then implementing the plan in a disciplined, effective, efficient manner.
One of the successes of the Major Account management program has been the creation of common models and language that facilitate discussion and planning across units and departments. It has also stimulated a commitment for our clients to plan long term for key relationships. Major Account management has many implications for individuals, departments and the business as a whole. It will always be demanding, but done right, it will be highly rewarding.
Copyright © 2020 by Jonathan Farrington All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means without permission of the author.
