SELLING AND

SALES MANAGEMENT
Birat Shrestha
BBA Hons/Emph, KUSOM
August/September 2018
BOOK REFERENCE

Selling and Sales Management -

David Jobber, Geoff Lancaster,
Prentice Hall, 8th edition

Management of Sales Force,

Rosann L. Spiro, William J. Stanton, Gregory A. Rich,
11th Edition, 2011, Tata Mc Grawhill
3. KEY ACCOUNT MANAGEMENT
AND SALES STRATEGY
WHAT IS KEY ACCOUNT MANAGEMENT
(KAM)?
 In response to increasing buyer concentration, companies are
reducing the size of their sales-forces
 Companies often find over 70 per cent of sales coming from a few
key customers - these key customers require special treatment
 Key accounts that are geographically widespread are often called
national accounts
 Key account management
 A strategy used by suppliers to target and serve high-potential
customers with complex needs
 Providing key customers with special treatment in the areas of
marketing, administration and service
 Key account status
 A customer must have high sales potential
 Should have complex buying behaviour
 Customers willing to enter into a long-term alliance or partnership
 Key account features
 Preferential treatment of major customers (areas of pricing, products,
services, distribution and information sharing)
 Dedicated key account managers
 Requires a multifunctional effort involving (cross-functional team)
CONDITIONS FOR SUCCESS OF KEY ACCOUNT MANAGEMENT
(HISE AND REID)

1. Integration of the key account programme into the

company’s overall sales effort
2. Senior management’s understanding of, and
support for, the key account unit’s role
3. Clear and practical lines of communication between
outlying sales and service units
4. Establishment of objectives and missions
5. Compatible working relationships between sales
management and field salespeople
6. Clear definition and identification of customers to
be designated for key account status
CRITERIA FOR SELECTING KEY ACCOUNTS
 Accounts should have growth prospects
 Accounts should be in a good position in their industry
 Customers should be willing to be partners in innovation
by allowing joint new product development with a supplier
 Customers should be early adopters of new products and so
aid the diffusion of such products in the marketplace
offered by the supplier firm
 Highly prestigious accounts that improve the image and
reputation of the supplier and can be used in reference
selling by the salesforce
 Accounts that are important to and currently served by
competitors that the supplier has decided to attack
 Accounts that provide a high contribution to the supplier’s
profits
THE TASKS AND SKILLS OF
KEY ACCOUNT MANAGEMENT
 Selecting the best person requires a full understanding
of the tasks and skills required of the job
 Its not just choosing the top salesperson to handle
KAM - the salesperson’s skills should match the
demanding service level of the buyer company
 Salesperson should act as partners in creating
strategic solutions to their problems
 Understanding and analysis of the buying criteria of
DMU (Decision Making Unit)
TASKS PERFORMED AND SKILLS REQUIRED BY KEY ACCOUNT MANAGEMENT

Tasks Skills
Develop long-term relationships Relationship building
Engage in direct contact with key customers Co-ordination
Maintain key account records and Negotiation
background information
Identify selling opportunities and sales Human relations
potential of existing key accounts
Monitor competitive developments affecting Focus on specific objectives
key accounts
Report results to upper management Diagnosing customer
problems
Monitor and/or control key account contracts Presentation skills
Make high-level presentations to key Generating visibility,
accounts reputation
Co-ordinate and expedite service to key Communication
accounts
Co-ordinate communications among Working in a team
company units servicing key accounts
TRADITIONAL (BOW-TIE) BUYER–SELLER RELATIONSHIP:
COMMUNICATION IS BETWEEN SALESPERSON AND BUYER
Interfirm contact being almost exclusively between the
supplier’s salesperson and the customer’s purchasing
manager

This is called the ‘bow-tie’ relationship

 KEY ACCOUNT (DIAMOND) BASED RELATIONSHIP:
KEY ACCOUNT MANAGER CO-ORDINATES COMMUNICATION WHICH IS
DIRECT BETWEEN FUNCTIONS
The key account manager co-
ordinates and encourages
multifunctional levels of interaction
involving various relevant functions
of both organisations such as
marketing, engineering, research
and development and finance

An important responsibility of a key

account manager
is to establish and maintain a
harmonious and mutually beneficial
relationship between supplier and
customer

Key account managers must have

the skills and/or power to
encourage functional specialists
within their own company to
interact with their counterparts in
customer organisations
 KEY ACCOUNT MANAGEMENT RELATIONAL DEVELOPMENT MODEL

 Pre-KAM
 It is the prospecting stage
 Breaking into an account
 Early-KAM
 Exploration of opportunities for closer collaboration by knowing the customers better
 Convince the customer of the benefits of being a ‘preferred customer’ – offering
adaptations
 Mid-KAM
 Trust has been established and the supplier is one of a small number of preferred
sources
 The number and range of contacts increases – social events
 Partnership-KAM
 The buying firm regards the supplier as an important strategic resource
 Sharing sensitive information, joint problem-solving, collaborative efforts
 Synergistic-KAM
 Buyer and seller see each other as part of a larger entity
 Transparent costing system
 Uncoupling-KAM
 Transactions and interactions cease - breakdowns due to changes in key personnel
and relationship problems
 Key account manager leaves to be replaced by someone who in the buyer’s eyes is less
skilled
 Breach of trust, product or service quality, account unattractiveness
KEY ACCOUNT RELATIONAL DEVELOPMENT MODEL
 GLOBAL ACCOUNT MANAGEMENT (GAM)
 GAM is the process of co-ordinating and developing mutually beneficial
long-term relationships with a select group of strategically important
customers (accounts) operating in globalising industries
 The growth of globalization of business activities is making GAM an
important issue for many multinational organisations
 Multinational customers are increasingly buying on a centralised or co-
ordinated basis and seek suppliers that are able to provide consistent
and seamless service across countries
 Creating global account managers to manage the interface between
seller and buyer on a global basis
 GAM issues – cross-cultural issues, global vs local conflict, managing
global logistics and global communication, global account manager
location
 Global account managers perform a boundary-spanning role across two
important organisational areas
 Internal interface between global and national account management –
headquarter and subsidiary company
 External interface between the supplier and the dispersed activities of its
global accounts
 BUILDING RELATIONSHIPS WITH KEY
ACCOUNTS
1. Personal trust (build confidence and reassurance) –
keep promises, reply to complaints, contact frequency,
visits, social activities with client, warnings to problem
2. Technical support (provide know-how/improve
productivity) – R&D cooperation, sales service, training,
dual selling
3. Resource support (reduce the buyer’s financial burden) –
financial facilities, cooperative promotions, counter-trade
4. Service levels (improve the quality of service) –
reliable JIT delivery, install computerized recording
system, fast and accurate quotes, defect reduction
5. Risk reduction (lower uncertainty in the customer’s
mind) – demonstration, trial period, product & delivery
guarantees, maintenance contracts, pro-active follow-ups,
reference selling
HANDLING RELATIONSHIPS WITH KEY ACCOUNTS
 Key account do’s
 Do work with the account to agree an actionable account plan.
 Do understand key account decision-making:
 Key choice criteria
 Roles of decision-making unit
 How decisions are made.
 Do only ever agree to what can be delivered
 Do resolve issues quickly
 Do confirm agreements in writing
 Do communicate internally to identify unresolved problems (e.g. late delivery)
 Do treat customers as ‘experts’ to encourage them to reveal information
 Do view issues from the customer’s (as well as your own) perspective
 Do ask questions: knowledge is power

 Key account dont’s

 Don’t let a small issue spoil a relationship.
 Don’t expect to win everything, giving a concession may improve the
relationship
 Don’t divulge confidential information from other accounts
 Don’t view negotiations as win–lose scenarios. Try to create win–win situations
 Don’t be afraid to say ‘No’ when the circumstances demand it
 Don’t deceive: if you do not know the answer, say so
KEY ACCOUNT INFORMATION AND
PLANNING SYSTEM
 Consistency (consistency and co-ordination between
managers)
 Monitoring of change (review the impact of change on
the account)
 Resource allocation (resources dedicated to accounts)
 Competitive advantage
 Buyer behaviour data
 Hard data record the facts and figures of the account such as
the products sold and markets served and the sales volume
(units), revenue and profits – quantitative
 Soft data complement hard data by providing qualitative (and
sometimes more subjective) assessments of the account
situation
 SWOT analysis of the supplier
 External environment analysis
 A KEY ACCOUNT INFORMATION SYSTEM
Types of Data
Hard Soft
General Name, Address, Contact, DMU members
Products, Sales, Profits Choice criteria
Perceptions
Attitudes
Buying process
Relationships
Strengths/weaknesses
External environment
Specific Sales by account,
Sales by product
Discounts,
Competitor’s product,
price levels & sales
KEY ACCOUNT PLANNING SYSTEM
 Objectives
 Stated in terms of sales and profit-by-product for each
account for the planning period
 Objectives in terms of gaining customer commitment
rather than of achieving a sales close
 Objectives must be set in terms of customer responses, not
seller actions
 Strategies
 The means by which objectives are achieved
 Guiding framework and the actions to approach and
persuade potential customers
 Control
 Review meetings to compare both quantitative and
qualitative performance against expectations
 Cost controls – sales staff and support staff costs, sales and
marketing costs (servicing and delivery)
KEY ACCOUNT PLANNING SYSTEM

ACCOUNT AUDIT

SWOT ANALYSIS
• Strength
• Weaknesses
• Opportunities
• Threats

ACCOUNT PLAN
• Objectives
• Strategies
• Control
KEY SUCCESS FACTORS FOR
KEY ACCOUNT MANAGEMENT (KAM)
1. Suitability of the key account manager
2. In-depth knowledge and understanding of the key
account customer’s business
3. Commitment to the partnership
4. Delivering value
5. Trust
6. Proper implementation and understanding of the
KAM concept
THANK YOU/BEST WISHES
Questions/Answers/Discussions