DRAFT PROPOSAL

TO

YOUR BUSINESS
ON

KEY ACCOUNT
MANAGEMENT
STRATEGIES
 CONTENTS

Page #

METHODOLOGY 1
RIGHTS OF CLIENTHOOD 2
KEY ACCOUNT MANAGEMENT - HOW, WHEN AND WHY 5
OBJECTIVES 6
KEY ACCOUNT MANAGEMENT PLAN 7
CUSTOMER PROFILE 8
KEY ACCOUNT MANAGEMENT PROFILE 10
SALES OPPORTUNITIES 12
COMPETITIVE ACTIVITY 13
SALES STRATEGIES AND ACTIONS PLAN 14
SALES TARGETS 16
CLIENT AGREEMENT 17
MAJOR ACCOUNT MANAGEMENT TIMING 19

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 KEY ACCOUNT MANAGEMENT STRATEGIES
[YOUR BUSINESS NAME]

METHODOLOGY

Based on a market survey recently conducted on behalf of [YOUR BUSINESS NAME], it was
assessed that its major accounts would seriously commit to an annual joint account plan, on
which the business relationship between the client and [YOUR BUSINESS NAME] can be
based.

In considering the headings in this document, it may be appropriate to highlight the single
most important factor for the establishment of a major account planning process, as
assessed during the recently concluded market survey.

It was assessed that, in order to minimise the effect of severe price competition leading to
the erosion of profitability, the direction of sales effort should be better positioned at the
twenty percent of clients who are contributing eighty percent of revenue. An assumption is
made that this same 80/20 rule applies to profit as well.

The principle behind changing a customer's thought processes from being price orientated
to value orientated is in simple terms, to change the customer into a client.

Based on a document from a book called “Consultative Selling” by Mack Hanan, the
concept is promoted, that while a customer buys on price, a client buys on value. The client
however, will then request an improved business relationship or partnership with the supplier.
This has been referred to as “The Rights of Clienthood”.

In order to assist the management team in their final formulation of key account
management strategies, the following Rights Of Clienthood are outlined for their evaluation,
and should be the basis of their final strategy.

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THE RIGHTS OF CLIENTHOOD

1. "Cure me"
Get things done - respond to my needs - produce results fast, because I
have more needs.

2. "Talk my language"
Speak to me in profit improvement terms - show me you identify with me and you
know my business.

3. "Don't surprise me"

Install a control system so I can be comfortable - let me share in evaluating our work
together.

4. "Level with me"

Tell it like it is - criticise constructively - tell me what's wrong, but let me know what's
right too.

5. "Get into my business"

Become a part of my team - be around - ask questions and don't be disruptive.

6. "Be reasonable"
Give a superior value in relation to your superior price - superior service makes a high
price reasonable.

7. "Be competent"
Give me the best you have - be a real professional.

8. "Teach me"
While you sell or perform, teach me how - share some of your experience and
expertise with me and my people.

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9. "Take leadership"
Get out in front of my problems, roll up your sleeves and get your hands dirty in my
business.

10. "Worry for me"

Think hard about my problems - let me know that you think, even without being asked
- give me immediate access to you when I am worried - be available.

11. "Innovate"
Give me something that's better than you've given anyone else - make me proud -
make me stand out - apply yourself in ways that transcend normal boundaries.

12. "Be faithful"

Keep our business confidential - make your relationship with me personal and
continuous - don't pass me along to others.

13. "Be motivated"

Show a strong desire to achieve our objective - be really interested in my problems.

14. "Be flexible"

Compromise with me once in a while, but don't give in when you know it's vital.

15. "Treat me like a person, not just a client"

Treat me like an equal - deal with me one to one - advise me on closely related
matters, even if you're not being paid for them - throw in a few little extras every now
and then.

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THE RIGHTS OF CLIENTHOOD (cont.)

What "The Rights of Clienthood" amounts to, is an expression of a client's concern for the
investment in a system, and for the need for visibility of commitment, together with the
dependency that must be placed on a business relationship. The seller must be sensitive to
the client's needs, and the client must know that the seller will diligently adhere to them.

In simple terms, what this leads to is the need for a system selling process. As far a [YOUR
BUSINESS NAME] is concerned, this system is suggested in the format of a key account
management plan.

To enable the management of [YOUR BUSINESS NAME] to use a catch phrase for this new
format, the word 'APACHE' is suggested. It stand for -

ACCOUNT
PENETRATION
AT
CLIENT
HIGH LEVELS OF
ENTRY

The following strategy on which key account management document can be formulated,
has been designed with the concept of APACHE in mind.

Once all of the appropriate client information has been gathered, the account manager will
effectively penetrate and control the decision-making process affecting the client's dealings
with [YOUR BUSINESS NAME].

It is respected that in many instances, this process has already been activated, and success
has already been achieved by the [YOUR BUSINESS NAME] sales team.

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It is our belief however, that the formalising of this key account management plan will
provide greater and more profitable sales.

KEY ACCOUNT MANAGEMENT - HOW, WHEN AND WHY

The objectives of any key account management strategy, must be to provide an improved
partnership relationship between [YOUR BUSINESS NAME] and its key accounts.

This presentation has not tackled the format on which key accounts must be assessed;
however, it is recommended that the management of [YOUR BUSINESS NAME] develop a
simple checklist which should be based around the following criteria:

1. Dollar trading value.

2. Strategic importance regardless of trading value.
3. Opportunity for reduction of opposition activity.
4. Risk of market penetration by competitors.

It is our belief that the management of [YOUR BUSINESS NAME] will add to and develop this
checklist which in itself, needs to be flexible and constantly reappraised as market conditions
vary.

The object of this key account management document, is to suggest a simple format on
which a personalised [YOUR BUSINESS NAME] key account management document and
strategy can be developed.

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 GUIDELINES FOR KEY ACCOUNT MANAGEMENT PLANS

A. OBJECTIVES

The key account management plan refers to a single client as part of an account manager's
portfolio, and must be developed to obtain the following objectives:

1. To provide background data about a major account, and where appropriate,

highlighting business trends and issues that will allow the account manager to
effectively penetrate and control the decision-making process for [YOUR
BUSINESS NAME].

2. To logically display, and if appropriate, document sales opportunities and competitive

threats that allow for the greatest possible protection of overall corporate
revenue, and stimulate new product sales.

3. To establish strategic, but simple guidelines for future account managers to follow.

4. To provide basic account documentation which will guarantee the continuity of the
handling of the account, and any other contacts the client may have with
[YOUR BUSINESS NAME].

5. To be the basis for an annual submission to the customer of a business review

document, which specifies the mutual understanding between [YOUR
BUSINESS NAME] and the client, and in particular, reviews the past activity from
both a client's and [YOUR BUSINESS NAME]’s point of view. In addition, this
submission will then project a new and improved understanding of a
partnership plan between [YOUR BUSINESS NAME] and its client, for the next
twelve months.

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B. KEY ACCOUNT MANAGEMENT PLAN

Following is a list of basic parameters for your consideration and development, under the
following sub headings:

B1. Objectives of the Key Account Management Plan:

This initial objective overview is to ensure that all appropriate information has been
considered for the development of a key account management plan, and
that specialist strategies have been developed and/or considered for the
gaining of client-and industry-related information, on which this key account
management plan will be formulated.

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B2. Customer Profile:

It is too basic to point out that one needs to know the following information:

Customer name

Customer address

Who owns and runs the business

All it’s contact numbers (incl After Hrs), website & email addresses.

The account number

Financial structure

In addition to the listed parameters, information relating to the personnel in the account,
should be documented under the heading 'Executive Summary':

The name of the chief executive

Key decision influencers

The company accountant

Sales managers or representative (if appropriate)

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B3. Key Account Management Profile:

The account must be qualified under the following guidelines:

Industry/company's position in the market

The business environment

The account's competitors

Client philosophy and business objectives

Financial situation

Client operations and locations

Decision-making and purchasing

Trading and payment history with [YOUR BUSINESS NAME]

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B4. Sales Opportunities:

The sales opportunities available to [YOUR BUSINESS NAME] should be assessed under the
following headings:

1. The importance of the sale to the client

2. The importance of the sale to [YOUR BUSINESS NAME]

3. The anticipated value of the sale

This would then lead to, and become part of the objectives of the key account
management plan.

B5. Competitive Activity

In the highly competitive environment that exists in the any industry, it may be important to
qualify the potential risks of competitor position and/or activity within each account. A
simple evaluation may be devised under the following headings:

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1. Which companies do they presently deal with?

2. Which companies have they dealt with in the past?

3. What reasons have been assessed for the gaining or losing of this
account by competitors

B6. Sales Strategies and Action Plans:

The sales strategies for any key account management client must be designed to provide
[YOUR BUSINESS NAME] and its client with a relationship edge. A simple guideline to be
followed is the following:

1. Describe business opportunity

2. Qualify specific sales opportunity

3. Analyse how this can be achieved

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4. Develop an action plan to achieve the desired result

B7. Sales Targets:

For any key account management program to be valuable, it must analyse all sales
opportunities, and provide some target profile on which the success of the key account
management plan and the account manager can be based.

The broad arenas on which this sales targeting process can be based, are the factors of
formal product sales, and secondly, the area of improved client relationships on which future
sales can be based.

A key account management plan correctly formulated, will normally provide fair and
realistic sales opportunities. It should be stressed that the responsibility of an account
manager is to eventually develop the account, with a view to improving the quality of
revenue provided to [YOUR BUSINESS NAME], with an appropriate defence strategy to
protect his increased revenue once it is received.

It is also important to stress that the account manager's responsibility is to regularly analyse
sales targets, so as to maximise sales opportunities and adjust the annual sales targets, as
projected at the onset of the key account management plan.

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As an initial basis for the development of sales targets, it is suggested that the present levels
of client performance be used as a guide on which future account sales strategies will be
based.

B8. Client Agreement:

Should [YOUR BUSINESS NAME] consider the possibility of using a client agreement
document, the following parameters may be all that is required to gain client commitment:

1. Provide a short resume of [YOUR BUSINESS NAME]’s account manager, the support
staff available from [YOUR BUSINESS NAME], and what their functions are in servicing
the major account.

2. A brief overview of the existing relationship between [YOUR BUSINESS NAME] and its
major account.

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3. An overview of key industry trends and issues that are specific to [YOUR BUSINESS
NAME]’s client business objectives, and this is stated from [YOUR BUSINESS NAME]’s
point of view.

4. A list of [YOUR BUSINESS NAME]’s requirements of any major account, with regard to
communication links, calling strategies, public relations gestures, etc.

5. An understanding of the partnership relationship between [YOUR BUSINESS NAME],

and each major client, with reference to future sales opportunities, joint marketing
practices, etc.

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6. A schedule and date for the regular review of this relationship, which will consider
[YOUR BUSINESS NAME] and its clients' viewpoints.

C. MAJOR ACCOUNT MANAGEMENT TIMING

In certain instances, it may be opportune to consider the extension of the key account
management plan to take in a two or three year horizon.

If this position can be attained, it will enable [YOUR BUSINESS NAME] to lock in to its major
accounts' organisational plans, and thus build an impenetrable barrier for [YOUR BUSINESS
NAME]’s opposition.

The section in this document that refers to Timing, should also consider the simple targeting
process of not only achievement to target in terms of volume, but also in terms of timing.

This is of specific significance if the key account management plan has built into it, a pricing
structure, related to volume purchase over a given timeframe.

Without the significance of a realistic timeframe, the value in the sale will be eroded, and
profitability of the account will be seriously questioned.

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