Revitalizing Key

Account Management
Its Time to Get Serious about Your Most
Important Customers

The Huge Pit of Missed

Opportunities
Why is successful key account management so elusive? Despite the best intentions of sales organizations to develop
strong relationships with their largest
and most valuable customers, too often
theyre not mustering a strong response
to the relentless concentration of buying
power. So how can suppliers shake off
the past and get it right this time?
Few executives dispute the value of having an overall plan to guide the account
team in developing new relationships or
expanding existing relationships at the
senior level. Key account management
seeks to align the best resources to
the most profitable opportunities. This
involves a thorough understanding of
the customer and its competitive environment. And it requires a continuous
engagement during every stage of the
relationship.

Page 1

While this sounds straightforward in

principle, structural challenges persist
against efforts to help achieve robust
key account management, scuttling
the best of intentions. When incentives favor individual sales metrics
over company wide performance, most
salespeople often keep their contact
information and intelligence close
to the vest and resist sharing it with
others working on an account. Without
a standard approach or templates for
sharing information, unconnected
pockets of information never coalesce
into real insight about the customers
business, existing relationships with the
supplier, or how the customer perceives
the relationship. One result can be that
the sales force gets pigeonholed into
discussions with lower-level procurement staff.

Another problem may arise with the

practice of rotating staff through frontline sales positions. People new to the
sales slot rarely are given structured
documentation about a key account, so
they must often build from scratch an
understanding of the accounts business
and history, which may impair any effort
to develop a strong relationship with
the customer.
Sales managers, moreover, often focus
on landing a few big deals, regardless
of a sales long-term profitability, or
without considering the possibility of
more lucrative offerings such as bundled
offerings. Many suppliers have different sales teams for different product
lines and different regions, and most
of the teams rarely talk with another
to leverage their relationships with
the accountmuch less to coordinate
in ways that would help deliver crossfunctional solutions.

Recent Trends Squeezing

Suppliers
Complicating the task of key account
management are several market pressures
that have intensified in recent years:

Consolidation
Buying power in many markets has
become more concentrated as a result
of the rise of big-box retail chains and,
in the past few years, consolidation
among distributors. Larger customers
have the clout to demand new pricing,
marketing, and distribution terms from
suppliers. Companies such as Wal-Mart
want to simplify their interactions by,
for instance, talking with a small team
representing the supplier, rather than
fielding multiple calls from different
product lines of the suppliers organization. This trend has swept through
industries ranging from tires to pharmaceuticals, food, consumer electronics,
and computer hardware.
Some petroleum companies, for instance,
formerly went to market through regional
wholesalers and now must also sell
directly to large grocery chains and
big-box retailers. Many manufacturers
of over-the-counter drugs and pestcontrol products now deal with huge
home improvement retailers as well as
distributors. Most tire makers that used
to sell only to specialty tire dealers now
must supply discount warehouse chains.
In each case, these new customers play
on a different field and require a different, tailored response.

Sophistication
Large corporate customers increasingly expect their supply partners to
understand their business and help them
accomplish business objectives, such as
assisting in speeding time to market or
reducing risk, training their personnel,
not just provide a good product at
lower cost.

Large retail chains, for instance, want

suppliers to take a hand in streamlining
the buying process and even taking on
category management responsibility
for competitor products. A Global Tier
1 Automotive Supplier organizes one
clients distribution system, electronicexchanges payments and co-marketing
programs, which boosts volume and
revenue. Some 1,200-1,500 suppliers
have opened offices near Wal-Marts
headquarters in Fayetteville, Arkansas1
helping to manage competitor product
categories and the supply chain. And a
global consumer products company is
changing the nature of its relationship
with strategic customers moving from
a focus on product sales to consultative engagements, collaborating with
partners to bring complex solutions to
business challenges.

Globalization
As suppliers expand to new international
markets, they must build their brands,
differentiate their offerings from local
competitors, and acquire a deeper
understanding of local cultures, infrastructure, and buying behavior.

the new competition, suppliers will be

pressed to develop defensive strategies
that protect their revenues and profits,
such as bundling products and services
into complete solutions that are hard
for upstarts to imitate or commoditize.
Conversely, for the emerging-market
challengers entering mature markets,
mastering the complexity of large
account management in a foreign language and culture is a major challenge.

Commoditization
Greater competition in many industries
and markets has put relentless downward
pressure on prices and profit margins.
One way to resist commoditization is
to sell complex solutions that have a
consulting component. But such highermargin solutions may hinge on the disciplined coordination of many parts of the
organization, across a longer sales cycle.
Planning for these accounts becomes far
more important. To engage a customer in
moving from product to solution requires
knowing a lot about its business and
building credibility through many conversations with the customer team.

Multinational suppliers also have to be

more attentive to coordinating account
information. One automotive parts
manufacturer, for instance, found itself in
a weak position with a global customer
that knew the suppliers pricing practices
across countries better than the supplier
itself. Coordinating information is crucial
for helping to optimize the account
portfolio so that, say, a small engagement by the New Zealand office of a
multinational law firm does not impinge
on a more critical client relationship in
the United States.
At the same time, incumbent suppliers
are seeing incursions on their home
turf by new, sophisticated competitors
from emerging markets winning deals
with low costs, innovative technology,
and rapid-response service. To counter

Page 2

The Way Out of the Pit

Key account management, practiced
effectively, can provide a structure to
navigate through each of these trends,
rather than being buffeted by them. But
it does require a shift in mindset and
behavior, and a commitment to build better capabilities, not just tweak a template
or designate an account lead. Many organizations are geared to generate product
sales volume, not to help a customer run
its operations better. Acquiring insight
about the customer takes hard work
over a period of months, and fostering
key accounts properly requires coordination, discipline, and scaling up to meet
customers needs.
Indeed, many suppliers acknowledge
that their key account management
falls short. CSO Insight recently did a
survey, sponsored by Accenture, of sales
executives in large companies around
the world.2 We found that 52 percent of
respondents say their key account plans
need improvements, and 60 percent say

they lose deals because competitors

establish a better relationship with the
customer. In addition, 38 percent say
they need to improve their understanding
of the customer buying process, and 47
percent need to improve on the ability
to sell based on value rather than on
discounted price.3
The survey showed that strong relationships and a strong account process make
a material difference to the business, as
shown in Figure 1. Companies at the top
of the sales relationship matrixthose
that are perceived by customers as delivering high value and that have a dynamic
account process in placeperform better
across the board. They have higher win
rates, more sales people making their
quotas, and fewer turnovers in the
sales ranks.
As per the study, the sales relationship/
process matrix has two components:
what value your customer perceives you
are bringing to the table, and the process
by which you engage and work with your
customers. Companies fall into one of

five levels of relationship with customers

and prospects, and one of four sales
process levels when it comes to the practices they use to find, create, and expand
customer relationships. We segmented all
of the study participants by both factors,
and then looked at the sales performance
for each segment, using responses from
the 2011 CSO Insights survey.4
There are lessons to be learned from
companies that have mastered the
discipline of key account management.
These leaders have changed the nature
of their engagement with customers,
elevating the discussion from input to
output, product to business outcome,
and from services for fees to services
with gain-sharing features. They are
elevating customer relationships from
the operations level to the C-level, and
expanding beyond product sales to help
meet the customers broader needs.
Fundamental to this approach is a
common, organization-wide understanding of the customers challenges and
strategic agenda, along with coordinated,

Figure 1: Strong Relationships Combined with a Dynamic Sales Process Can Shift the Performance Curve

Trusted Partner

Performance Level 3
29% of Firms

Strategic Contributor
Solutions Consultant
Preferred Supplier

Performance Level 2
46% of Firms

Performance Level 1
25% of Firms

Approved Vendor
Random Process

Informal Process

Formal Process

Dynamic Process

Sales Performance Across Levels Comparison

Performance Level 1

Performance Level 2

Performance Level 3

% Reps Making Quota

55%

60%

65%

% Company Plan Attainment

82%

86%

90%

% Forecast - Wins

42%

47%

52%

% Forecast - Losses

34%

30%

27%

% Forecast - No Decisions

24%

24%

21%

% Sales Force Turnover

28%

26%

22%

Source: CSO Insights, Sales Performance Optimization, 2011.

Page 3

well-planned steps to put that agenda

to work.
Their experiences, combined with our
work helping clients in this area, suggest
a set of principles to build a powerful key
account management system.

Gain a Uniform Understanding

of the Customer
For account teams, a vital first step is
to acquire a deep understanding of the
business context: the customers business
needs, its industry dynamics, and its
position relative to competitors. Account
teams tend to default to identifying
opportunities for existing products they
can exploit with customers, but they
may not take the time to understand
the customers competitive position.
Such insights can inform conversations
on matters other than price, including
potential strengths and weaknesses that
could result in new opportunities or new
executive relationships.
Equally as important is to share this rich
picture of the customer widely across

the account team, so that it becomes

the common platform for all subsequent
strategies and tactics. This means
documenting key relationships between
supplier and customer staff, upcoming tenders, possible legislation that
could impact the customer, significant
organizational changes, how regulators
are measuring the company, likely budget
changes, and so.
Without a common understanding
of the customer derived from shared
information, its nearly impossible to
present a coherent, unified front. When
Accenture assessed account activities
for a manufacturer of communications
equipment, we identified numerous
account plans spread among different
geographies. Each plan was duplicative,
separate from, or even in conflict with
at least some of the other plans, causing
major inefficiencies as well as aggravation to the customer. Because planning
was not synchronized, the supplier could
not capitalize on the insights in each plan
or grasp the totality of the customers
business.

Figure 2: Customer Power Map

Far more effective is to deploy a consolidated plan thats shared among the
whole team and top management. This
allows a supplier to move beyond transactional sales and service to the more
lucrative business of addressing customers higher-order needs. For a consumer
electronics company selling photographic
products to a public sector organization,
making the transition to an organization
selling imaging services leading to storage, analytics and technology opportunities that make a bigger business impact
than previously considered.
To reach a common view of relationships
across the customers organization,
the routine use of a customer power
map, as shown in Figure 2, is a great
way to solicit the involvement of the
entire direct and indirect account team.
Various interactions with key accounts
produce many relationships and streams
of information, yet the intelligence is
rarely assembled and documented in an
accessible format. The power map shows
where relationships are strong or weak
among sales, credit, marketing, and supply chain personnel, each of whom have
important interactions with the customer.

Xx Xxx
CEO

Xx Xxx
R&D

Xx Xxx
VP Purchasing

Xx Xxx
Lead

Xx Xxx
Chassis Purchasing

Xx Xxx
Title

Xx Xxx
Title

Xx Xxx
Title

Xx Xxx
Title

Quality of the relationships

Positive
Neutral
Poor

Xx Xxx
VP Marketing

Xx Xxx
VP Services & Parts

Competitor 1

Xx Xxx
Title

Competitor 2

Xx Xxx
Title

Xx Xxx
Title

Xx Xxx
Director of Programs
Xx Xxx
Vehicle Project
Manager

Xx Xxx
Vehicle Project
Manager

Automotive
association

Unknown

Decision power
3 High

2 Medium

1 Low

Non-hierarchical influence

O Owner of the relationship

Copyright 2011, Accenture LLP. All rights reserved.

Page 4

Including information about the relationships your customers have with your
competitors, if available and accurate,
can add another important and strategic
dimension to the power map. Knowing
who has whose ear can be very valuable in the customer relationship
equation. This type of map helps the
team anticipate what is needed for all
stages, from pitching for the business to
completing the job. Too often, we hear,
Lets win this first, and then well see
how we can deliver it. One company
we worked with paid the price for that
attitude. At the outset, company seemed
a shoo-in to clinch a contract, because
it offered the best technical solution.
But sales representatives did not realize
that delivery would have to be done in
collaboration with two other companies
that had signed exclusive agreements
with competitors.

Speak With a Unified Voice

Once the team has a common understanding of the customer, it should
develop a common approach that
everyone follows. Sales managers from
different business units should be viewing the same documents and work from
the same plan.
Key account work will involve many
people interacting with the customers
organization, not just in sales but also
in credit, the supply chain, accounts
receivable, and so on. A big challenge
is to coordinate that effort so that the
customer receives a consistent message.
On a single day, one of our clients was
contacted by three people from the
same supplier: the project manager
trying to fix some problems, the marketing lead assessing customer interest in
a new technology, and the sales lead
following an opportunity. None of them
knew about the others actions, and
the inconsistent message and lack of
coordination did not sit well with our
clients staff.

Page 5

Communicating with a unified voice

entails a mandate from senior management to enlist the participation of
business unit leaders beyond the sales
team in setting up a clear governance
structure. The key account manager
should clearly define communication
channels, roles and responsibilities
among sales, marketing, customer
service, and other business units. The
manager should bring all of the players
who interact with the customer into the
account planning process, give them an
ongoing view of that process, and talk
regularly with them about what they
should be doing.
In this regard, we have seen two common organizational models. One is a
multi-local model appropriate for a
mid-tier key account thats not large
enough or strategic enough to warrant
a fully dedicated team. The key account
manager serves as a coordinator, working with sales teams across geographic
or functional units, aligning on price,
strategy and so on.
A strong-central model is more rigidly
structured and appropriate to the largest and most strategic key accounts
that demand a dedicated team globally.
The global account manager has local
account teams reporting directly, with
dotted line responsibility to local sales
management.
The strengths of both modelsthe
efficiency of a strong center and the onthe-ground effectiveness of local staff
can be combined in a hybrid model,
shown in Figure 3. In a large country
market, you can have a dedicated,
multi-function account team, while a
small country market can rely on a local
account representative reporting to a
country manager. To make this model
work well across many countries, sales
management must tightly control its
pricing and capital allocation. Otherwise,
the customer can take advantage
of price disparities at the suppliers
expense.

Figure 3: How a Hybrid Model Works

CSO

Key Account
Director

Country/Region
Director A

Country/Region
Director B

Dedicated Support
Resources

Shared Resources

Shared Resources

Key Account
County/Region
Manager

Local Account
Executive

Local Account
Executive

Key Account
County/Region
Manager

Local Account
Executive

Local Account
Executive

Elements
Strategy

Process

Multi-local

Strong-central

Suites early stage key

accounts; lower cost
Weak management structure,
negotiating priorities

Best for strategic, multicountry, partnership level

accounts

Places premium on process

and joint planning

Facilitates development and

execution of plan

High-cost, not most efficient

where account has small
locations widely spread

Difficult to align plan across

sales teams

Great development position

for more role responsibility

Combines dedicated management

with cost efficiencies of local
sales force in smaller account
locations
Requires negotiating budgets
targets and priorities with
County/Region Sales management
Places premium on process and
joint planning
Requires negotiating budgets,
targets and priorities with local
sale management for small
account locations

Account information is more

difficult to collect

People

Hybrid

Senior level leader with P&L and

executive authority

Same as Strong-central

Superb relationship development

and entrepreneurial

Technology

Difficult to maintain standards

on process and templates
without systems
Premium on standard methods

Copyright 2011, Accenture LLP. All rights reserved.

Strong management
ensures uniformity

Multiple locations and account

structures demand systems

P&L is more easily managed

Page 6

The Four Elements of Key Account Management Capability

Technology

Strategy
u s t o me r I

ed

Cus
t

Tru
st

v a l u a t e P e r f o r ma

4. E

latio n ship

ht

r e at e Ac c oun t P l a

Re

er
om

Joint
Business
Success

ns i g

2. C

ha r e C

n ce

1. S

3. E

xecute Plan

Process

To make key account management

work well requires mastering four
areas: strategy, organization, process,
and technology. The four work in
concert; getting one or two right
without adequate attention to the
others is the difference between
baseline and high performance.
Strategy
Determine Which Customers Qualify.
Criteria include a customers existing
and likely future revenue growth
and strategic position in its industry.
By these measures, some smaller
company accounts merit key account
designation, as do channel partners
that are growing through mergers.
To prevent sales people from being
spread too thinly, take care to focus
finite resources on the handful of
accounts worth designating as key,
and to have a consistent definition
across regions and parts of the
organization.

Page 7

Organization

Organization
Align the Sales Organization.
Supplement with a system to share
awards among the sales force and
ensure that each person shares his or
her knowledge about the customer;
engage the extended team in planning
and execution. Review and build
organizational capacity to support key
accounts with in accepted cost-toserve parameters.
Synchronize the Organization with
the Customer. When possible, have
single account leads paired with the
customers similar functional head for
product, supply chain, marketing, and
operations. Work at the customers
pace, rather than a pace set by
internal operations.

Select a Team with the Right Set of

Skills to Develop a Robust Account
Plan. This should be a cross-functional
team composed of dedicated and
indirect personnel (such as supply
chain and marketing) not the same old
sales team built around established
relationships. When considering how
to grow the account, it pays to tap
fresh thinking from subject-matter
experts and support staff, who are
sometimes outside of the account
team.
Process
Define the Key Account Planning
Process and Link with Annual
Business Planning and Budgeting
Processes. Account planning typically
is viewed as an annual reporting
activity with each step in the process
timed to annual reviews, customer
reviews, budgeting and business
forecasting. More frequent, regular
meetings will help to keep the team
coordinated, so that day-to-day
activities stay aligned to the strategic
objectives. And define a responsibility
assignment matrix for support
personnel, so their roles are clear.

Conduct Regular Key Account Review

Meetings to Monitor the Action Plan
and Sales Results, Integrated Into
Company-wide Review Cycles. Instead,
one should regularly take the pulse
of customer expectations and the
extent to which the services provided
meet those expectations. Introduce a
quality assurance process to ask the
difficult questions and break through
impediments.
Update the Key Account Power Map
Frequently. Youve got to keep tabs
on whom you know and whom you
dont. Maintaining the power map
ensures that the team has an accurate
picture of the different players within
the customer, their perceptions, social
styles, and relationships. It also helps
to identify areas of the business
where the supplier has no established
relationships, or where competitors are
making inroads.

Establish Joint Processes with the

Customer. This is particularly useful
concerning product improvements
and measurement of results.
Joint processes help foster a true
partnership.
Technology
Establish a Common Repository
of Account Information. Customer
insights are often dispersed widely
throughout an organization, leading
to duplicate efforts compiling and
analyzing information or one-off
exercises that dont get scaled up. A
common repository should include the
customer profile, power map, sales
data, win/loss analysis, and internal
organizational charts. The goal is to
foster coordinated communication at
both tactical and operational levels,
promoting one common message.
Action plans can even be automated
to automatically track assignments
and status.

Make the Sales Plan Visible to All

Team Members Electronically. Some
companies demonstrate a lack of trust
in their own team (which becomes
evident to the customer) by limiting
visibility to account objectives,
relationships, and strategies. Yet for
key account management to succeed,
each team member must share a
sense of responsibility and ownership
in developing the account. Sharing
all information is central to that
philosophy.

Page 8

Get Everyone on Board

Convincing a sales force of the benefits
of a structured key account management can be a tall order. When this
approach is first presented, its typically greeted with a range of reactions.
Some sales people appreciate having a
structured approach that will help them
position their offering to the customer
and better align internal resources to
support that offering. Others believe
they know how to hit their numbers
and resist a new process or paperwork
as distractions from working the next
sale. They often feel quite proprietary
about their relationship with members
of the customer team, and thus dont
want to share hard-won information.
To counter these perceptions, senior
executives can make a strong business
case that makes clear the risk of shortterm thinking: Continuing down the
current path will lead to a commoditization of the product, and sales people
will not be able to make any numbers
within a couple of years. Further, the
greatest opportunity for sales people to
personally benefit is for the company
to develop differentiated, higher-margin
offerings that have high value for large
customers, and to join forces with colleagues to serve those accounts.
Bringing to life this united we stand,
divided we fall strategy can be accomplished through a key account boot
camp of sortsa safe environment
for brainstorming and experimentation. Here, participants review the key
account sales process and learn the
utility of a new common understanding
of customer needs.
The course has three phases:
Preparation. The account team prepares a customer profile, a recounting
of recent client engagements, a
relationship map, offering material,
and a client survey with feedback
results. The team outlines objectives
and assigns roles to members.
Planning. The account team develops
a detailed, prioritized strategy and
action plan, related to account
positioning, relationship development,
and opportunities.
Page 9

Simulation. In a simulated client

meeting, the team learns to engage
with the client, listen, and receive
feedback. The goal is to establish
credibility and trust, with instructors
reinforcing important behaviors and
instilling the ability to glean insights
from client discussions.
To help ensure that the plans are insightful and grounded in the customers
world, its useful to discuss them with
the customer before they are finalized.
The account manager would show
the customer the high-level strategy
and objectives for the planning period
(increase the customers volume, say, or
improve its margin by changing the product mix) through specific tactics (such as
a co-marketing program). The customers
representative, meanwhile, can provide
details about business challenges, organizational changes, and other information
thats hard to glean from the outside.

Build a System for the Long Term

Some suppliers argue they cant afford
the luxury of losing a single opportunity.
But not all opportunities require the
same degree of attention. To identify
which are the most important, analyze
the array of opportunities using a set of
questions that will uncover the critical
success factors. The findings allow management to make sound decisions based
on facts rather than solely on instinct.
Keep in mind that as time goes on,
key account management does not
run itself; the process will have to be
refreshed and reviewed regularly, so that
it doesnt lapse into just another fad of
the month. Senior management needs
to reinforce its importance during field
visits, by reviewing the account plan and
suggesting how practices in other parts
of the organization might help with the
account. Senior management should also
insist that key account plans get woven
into other processes, such as overall
annual business planning, and marketing
and supply chain budget planning. After
all, key accounts are segments of one
with unique requirements for crossfunctional cooperation.

From time to time, its useful to step

back and assess progress by enlisting
a senior executive from another part
of the business to conduct an account
audit. He or she interviews a few
members of the account team, as well
as the core customer team to get their
feedback on how well the supplier is
serving their needs. Having this fresh
perspective on the account can reveal
pockets of inefficiency or new opportunities for business.
Changing the nature of the relationship
with key customers takes substantial
effort and a different mindset among
the sales force. But the rewards may
well be worth the efforthigher sales,
more profitable and more sustainable
revenues, and the status of a trusted
partnership. Key account management
can even help improve the innovation
process, by making it more customercentric. Instead of inventing new
products and then handing it over to
the sales team with their marching
orders, a supplier starts by listening
to the customers priorities and allows
that information to inform the R&D
process. The tides of globalization and
commoditization cannot be turned back,
but suppliers can thrive amidst this
turbulence by continually nourishing the
relationships with their best corporate
customers.

References
1. Two Arkansas counties have big
population increase, MorningSun.net,
http://www.morningsun.net/news/
x1568449763/Two-Ark-countieshave-big-population-increase, posted
February 19, 2011.
2. CSO Insights, Sales Performance
Optimization, 2011.
3. Ibid
4. Ibid

Page 10

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 233,000
people serving clients in more than 120
countries. Combining unparalleled experience, comprehensive capabilities across
all industries and business functions,
and extensive research on the worlds
most successful companies, Accenture
collaborates with clients to help them
become high-performance businesses and
governments. The company generated net
revenues of US$21.6 billion for the fiscal
year ended Aug. 31, 2010. Its home page
is www.accenture.com.

Copyright 2011 Accenture

All rights reserved.
Accenture, its logo, and
High Performance Delivered
are trademarks of Accenture.

About Accenture CRM

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