Key Account Marketing - 4 Lessons from the Field
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Guest Blog post: Mike Peters, Managing Director - Whitespace Consulting Group and an Associate of Solutions Insights
I recently participated in the Solutions Insights research on Key Account Marketing Programs. The research project made me think of my own experiences designing and implementing a Key Account Marketing Program for a Big 4 global consulting firm. Our research showed that we were not being considered for large sales opportunities -- that we were qualified for -- within our key accounts. Many times, we became aware of large projects only after they were awarded. This finding was particularly troubling since our success rate, when invited to compete, was extremely high. In baseball terms, we had a great batting average once we were allowed to swing the bat; we just needed to get into the batters box more often.
To address the issue, we created a Key Account Marketing Program that assigned a senior marketing resource to selected account teams. We believed the addition of a marketing resource would increase our visibility within key accounts. Based on my experiences, here are 4 recommendations to help make your Account Marketing Program a success:
1. Pilot a Proof-of-Concept
Before you begin, you must ensure that you have the support of the executive team. Key Account Marketing Programs can be complex with a lot of variables to control. Determine the most likely source of long-term funding up front to ensure the program has time to reach its full potential. Depending on the size of your organization, a 2 year funding commitment is not unreasonable. In our case, we had global funding for an initial 12-month, six-account global pilot. After that period, we needed buy-in from the line profit-and-loss leaders to provide longer-term management and funding. In hindsight, twelve months was too short a period to prove the impact of the program and secure a long-term funding source.
2. Use Your Strategic Account Planning Process to Create an Integrated Account Team
The sales and marketing organizations should work hand-in-hand to build a strategic plan that unifies your brand and strategizes your account as a “market of one”. All account messaging and activities should adhere to the strategic sales and marketing account plan. This may require controlling or restricting account access to the primary account team. This may also mean respectfully declining to respond to RFP’s deemed to be slightly off the market of the One Brand message. As importantly, select the key account leader wisely. Whether it be a Client Service Executive, an Account Relationship Manager, an Industry Partner, or a Country Manager-- seamless linkage with, and buy-in from, the global sales organization, and as in our case--the Lead Partner--was essential. Teaming and cooperation from all sales stakeholders is critical. Even with minimal cost to the sales department, it will be impossible to effectively embed a senior marketing resource into any key account team without agreement from the sales function. Early involvement of the sales team leadership will help to avoid cultural rejection of the transplanted marketing resource.
3. Assign Your Best Marketing Resources to the Program
Avoid accepting first available or under-performers from other marketing units to staff the newly created key marketer role. The success of the pilot, and the longer-term program, is dependent upon the quality of the assigned marketing resources. A senior marketer with industry and relevant experience will quickly demonstrate their value. In our pilot, we enlisted senior marketers who could strategically position our firm verses our competitors. They were also able to discuss future industry trends. We labeled this capability “Big M” marketing skills. Previous face-to-face selling or delivery experience also increased their credibility with the account team.
4. Offer Tailored Thought Leadership and Points-of-View Marketing Materials
Too often, sales organizations print generic marketing materials that can be given to all clients, regardless of business problems or industry. To be effective, materials must be tailored to the concerns of the client and their industry. Thought leadership documents and whitepapers, that specifically address critical client issues, will help you gain credibility faster and get you invited to compete more often. Your goal is to position your organization as the one which is best suited to help solve their specific business issues-- as a “market of one”. In order to save time and effort, attempt to re-purpose existing materials rather than creating totally new content. In addition, marketers must now control their messaging across all the various online channels. Your website, blog, and social media presence should all have consistent messaging that reinforces your brand and is tailored to the client’s industry and business issues.
Understanding your key account’s industry and business issues are paramount to the success of any Key Account Marketing Program. Aligning your marketing messages with the account’s strategic direction will make you eligible to compete more often. Allocating the right marketing resources to the sales team is often the key variable in the program’s success.
About the Author:
Mike Peters is the Managing Director of the Whitespace Consulting Group (WCG)--a global business development strategy and optimization advisory firm. He can be reached through the WCG Sales Strategies Blog: www.whitespace-consulting.com/blog or by email: firstname.lastname@example.org
Very thoughtful post. I am wondering, though, if the fact that positioning the organization towards one type of solution/offering and having a consistent marketing message with the key accounts, wouldn't it block the organization as a whole of gaining new customers and using current skills to offer services in new areas? Who would be the responsible of finding new areas to cover and not necessarily with an already existing offering and/or structure? Generating new content based on existing frameworks could actually keep the organization one step ahead of competitors. I would love to have your insights on that!
Hi Mike, It is a very interesting article that you have posted here. I wanted to understand further from you whether the Account Marketing Program that you are talking about, incorporates elements from Account Based Marketing or is different from it? Point No. 2 where you have mentioned about the close collaboration between sales and marketing organizations to build a strategic plan for the account, seemingly has a concept very similar to ABM but I am not sure if it is really indicating towards an ABM philosophy?
When companies decide to be solutions focused, there would be a solutions council that they usually form. This council consists of the decision makers from various P&L's and also from different departments of the organization. This council will make decide what could possibly be a good solution that the company need to focus on. Also, it is a part of the council responsibility to come up with new and dynamic offerings based on the customer pain points and what is keeping the customers awake at night.
A very insightful article on Key Account Marketing. I wanted to ask the author if having a solid 5-6 years experience in consultative selling experience, (not necessarily from the IT industry) would be a good fit for identifying a suitable marketing resource for the KAM program? Would it be a more compelling case for the other key stakeholders in the solutions team; the sales and delivery teams, to "BUY -IN" to the key account management processes and the solutions marketing initiative, under the marketing resource, if the resource had a strong prior practical knowledge of consultative sales?
I totally agree with this approach towards Key Account management and marketing, especially the importance of allocating the necessary budget for it to be a success. Many times top management can seem enthusiastic about an initiative or idea, even assigning resources like skilled people and valuable time to a project. However, if there is no funding behind this support, there is really no point in going forward because it is most likely to fade out. As it is mentioned, long term funding is critical and demonstrates that there is not only interest, but there is also a commitment by the company to back-up the project, win or lose. And this ultimately shows the rest of the company also that there is faith.
As mentioned throughout the post, I totally agree with Mike Peters that Key Account Marketing Program helps companies identify the areas where in a pilot may lead to huge success. The best way to mitigate risk is to have a pilot project. But the major challenge remains on how to co-ordinate effectively between sales and the marketing team. Also, the decision of who will be on-board of Solutions council has to be very thoughtful and clear. Since it is hard to measure the ROI on the marketing activities, often times it will be tricky to assign the best marketing resource to the program. Value based communications is very critical and now companies are finding innovative ways to deal with it.
Hi Roland, Remember we are strategizing this account separately as a “market-of-one” in our planning process. Gain a thorough understanding of their strategic direction and challenges and prioritize the problems you will attempt to solve for them. Aim your marketing messages and thought leadership content to address only the specific issues this account is addressing now or in the near future. In other words, position yourselves as being the most knowledgeable experts available to help them with their most immediate and important problem(s). Minimize the other things you can do for them that might dilute your primary messages for now. We can position ourselves as “expert” in these additional areas after their next strategic planning (and funding) cycle. To your second point, innovation can come from many places: top-down, bottom-up third-party sources, or a combination of all three. All would necessarily include market input. The best source of new offer ideas will vary by domain and industry. Scrutinizing your major account plans by industry will provide you a good feel for common issues and trends. Most major firms will then have an executive review board and associated process to evaluate and fund potential new offers. Our firm used this same process for internal investments, as well. Read/skim the "Blue Ocean Strategy" book if you haven’t already – I think it will help you build upon your innovation and competition ideas.
Hi Nishant, The experience I describe in my blog post is from the 1998-2000 timeframe while I was a member of a marketing organization for a $15B global consultancy. I worked closely with the team currently at Solutions Insights in the past so I’m sure the program philosophies are compatible in many ways - in thought and approach. In most organizations the sales function owns the account – from creating new and nurturing existing relationships through account growth goals. I emphasize the need for close (seamless?) collaboration between marketing and sales in the joint account sales and marketing planning process. This teaming will create the best strategic account plan possible. As a side note, although both sales and marketing stakeholders are equal in theory, the program budget-holder always gets the tie-breaking vote!
Sure Ashish, I think a sales person with 5-6 years consultative sales experience could be proficient at identifying and selecting a good, dedicated account marketing resource. Look for the skills I mentioned in Lesson #3 in the blog post. I would use a team approach to the hiring process including the roles you mentioned above. As you suggest, team buy-in to the role and individual resource is key. Client-facing experience, with either consultative selling or delivery, will go a long way helping the marketing individual selected “earn their spurs” with the account team. I have an article on my website on improved team hiring if you’d like to take a look at adding some additional structure to your candidate selection process.
Hi Maria, Yes, great comment. The general downturn in the economy in 2001 and the dot.com bubble burst caused us to lose program funding even though we in marketing management kept the faith! In hindsight, we would have been better served to get a 3-5 year commitment from our Global CMO, rather than relying on line P&L management, to assure the program had the timeframe necessary to demonstrate financial return. This reduced funding risk would have also made it easier for us to attract the best marketers to the role. Even with such a commitment, management and business model change can nullify any agreement for extended funding.
Agree Varun, sales and marketing integration remains a challenge in most organizations. Even when one leader owns both functions, as in smaller entities, the synergy is strained at best. Revenue is a lagging indicator in most marketing investments so “proxy” measurements are helpful. Although somewhat subjective and not always a valid indicator, I’ll measure face-to-face account activity as indicator of future revenue success. As you suggest, a well-built Solutions Council, with cross-functional executive representation, can be helpful approving the design of any KAM program, including roles, responsibilities, measurement and metrics.
Agree Shyam. No better experts at ideation and innovation than the company stakeholders/subject-matter-experts themselves. All levels/titles should have a voice – from sales, to product marketing, to customer support, to product maintenance professionals. I’m a big believer in bottom-up “solutions” ideas from customer-facing personnel. The more experience with customers and their business “pains” the person has, the more credibility their ideas have with me. Something to consider I guess as we all manage our careers.
Here is the url for the hiring post(s) I mentioned to Ashish: http://www.whitespace-consulting.com/blog/bid/160898/Improve-Your-Sales-Hiring-Success-Rate-One-Method-That-Can-Help
Thank you so much! It is very easy to get so involved in a specific project, product, idea, or solution that we loose sight of the bigger picture. These are four very easy to remember steps from a broad view to assist in preparation. For those of us that are working with a smaller budget this information is very helpful (I also very much enjoyed the baseball example). I was wondering, however, if there is a further strategy in place to maintain a relationship with the client after Step 4. Is there a "Step 5" perhaps that helps with the transition to a full time client? Also how much time do you think it would take to establish a Key Accounts Marketing Program, and with how many on the team?
Great Post Mike Peters. All of your ideas are very thoughtful and are important steps in building Key Accounts. I wanted to stress the importance in understanding and analyzing your Key Accounts. If you are going to spend vast amounts of energy in one account, spending even more time analyzing your Key Account should be complemented. Improper planning, analysis, and execution in any one of these factors can damage the company and your relationship with your Key Account. To offer true value, the team should understand the account’s DNA including its corporate culture, operations, financials, stakeholders, vendors, key issues for the account’s customers, etc. In addition to analyzing your Key Account, try walking in their shoes by creating multiple scenarios and understanding their business imperative, then finding initiatives for those imperatives, followed by developing criteria’s. This will help better reach your Key Account’s goals. When implementing these very important 1-4 lessons, the last step before executing the plan I kept seeing in examples of creating a Key Account Marketing is Review. Demings cycle PDCA, checking each step is a critical factor in best providing insights or solutions into whether or not your meeting your account’s original objectives and not steering the other direction.
Hi Mike, KAM is widespread in IT outsourcing industry; especially the last decade has seen many organizations mobilizing its human capital to focus on specific accounts. It is very common in IT companies to hear “Which account you working with? “. However, most of the technical team never realizes or analyzes the KAM principles and the benefits as well as the risks associated with it. I certainly appreciate your insight that covers the organizational capabilities, pre-planning and budgeting, organizational structuring and customization required for KAM. With my experience in IT industry in recent years, I would like to highlight a few more aspects of KAM as mentioned below: 1. The widespread use of KAM concept among competitors, leading to its ineffectiveness in being a competitive advantage. In porter 5 forces dynamics, this widespread usage has definitely increased the bargaining power of Customers (Key Accounts). 2. As a follow-up of the point 1, lot of local service providers snatch business due to the cost advantage especially in the recession time when most of the companies are looking for cost benefits. This raises the question ‘Can KAM overheads justify its benefits in the recession market?’ Hope to discuss it in detail. Regards, Brijesh
Mike – This is a great and concise outline of the key success factors in developing a Key Account Marketing Program. You mention something only in passing that I think is a critically important activity in building such a relationship with clients – the act of declining an RFP. Particularly in an environment where the KAM program has been developed to increase “follow-on” opportunities with clients, and increase the number of times you get called up to bat – as you put it – I think one of the biggest challenges can be saying NO when necessary. In my experience, developing a powerful brand and marketing strategy, either for yourself or for your clients, can often depend more on having the strength of convictions, and strategic vision to decline opportunities and save yourself for like-minded projects. In sum, more is certainly not always better, and I think highlighting the importance of strategically deciding which pitches to swing at, and driving more home runs, is an incredibly critical part of the KAM relationship. I did also want to humbly propose a fifth recommendation – that may actually exist somewhere in a sub-bullet point to your discussion on though leadership. You spend time discussing the importance of a seamless and mutually supported marketing + sales team. I would like to suggest that developing an integrated account-client team, and building a new, more intimate relationship or partnership with the clients is absolutely critical in achieving the buy-in and support necessary to driving success. Thought leadership and point-of-view marketing materials is a great way to start this kind of relationship, but it’s not enough. Demonstrating on a daily basis your value to the client needs to be more than just “I really understand your business.” One of the best compliments we received from a client was a reference they provided to a potential new client – they said we had integrated ourselves so deeply into their organization, and proved to be such invaluable partners, that they often caught themselves giving our team members email addresses with their company’s suffix. This closeness enabled our team to be a true steward of their brand, and by extension, our own.
Mike, As a person who is just starting to gain experience in the solutions marketing field, I just can think of the vital importance that the success of a Pilot program plays in the implementation of the KAM and all the simple mistakes that an inexperienced people can make during the planning stage. I think your post provides very valuable insights towards the success of a pilot and also highlight the importance of alignment, and self awareness. I think this post heads towards building a community within the sales and the marketing firm, a community wherein all the members know perfectly the how, where, why and when to swing the bat, hence the importance of allocating the best resources in terms of senior executives and thought leadership. I would like to know what considerations should you take in terms of getting the buy-in from the client to be involved in a program of this nature, do you have some lessons from the field regarding this aspect? Regards!
Hi Mike! I have encountered into the same problem during implementation of solutions approach in my company. It is interesting article and I agree with you points, but I think there is one more important challenge - the consistency of information. What we faced, was that we knew information that our potential clients have plans in the future, say 1 year or 6 month, to start a new project. During the time this information was changing, the project could start earlier or be delayed. Key account managers, responsible for that particular project were assigned to contact with particular frequency, but always there is a human factor presents and not all information in the CRM was according to the date. Another main issue was if key account manager left the company, insight information was gone with him, although main data was still in the CRM. I am wondering if you had the same issues and how you solved them?
Hi Peter, Thank you for sharing this insight. One important key you mentionned is the ability to communicate to the client tailored thought leadership that proves our deep insight on the issues our clients face and our successful records in dealing with such issues. But what if we don't have initially any significant experience or insight on those specific issues, how can we still convince the client of our ability to understand his issues and provide the adequate solutions? This case happens quite often espescially with the new businesses that switch to a solutions model.
Hi Richard, You are absolutely correct. Whether large account sales or marketing planning, understanding the client’s business is paramount. We coach account teams to understand their client’s business issues and opportunities as well as their client’s do. Only then can they be confident they are in-alignment with the account’s strategic direction and becoming the most valuable partner possible. If you have additional interest, see our sample strategic account sales plan scorecard on our website. Here’s an example. While recently helping a large, global account team strategically plan their account, we found the majority of their sales investment and brand-building efforts were in a small percentage of the client’s business. Unfortunately the businesses they were investing in were for sale as part of the account’s divestiture and retrenchment strategy. Additional analysis revealed > 95% of our client account team’s sales opportunities were outside of the prospect company’s long-term strategic plan as documented in their most recent annual report. Lastly, on planning and execution review. The Deming Cycle (Deming called it the Shewhart Cycle) can certainly improve the results and reduce the implementation risk in any key account marketing program. In our case the pilot process, establishment of the program steering committee, and the periodic account reviews all served to support our “PDCA-like” activities.
Hi Brijesh, Thanks for the note. I agree with your thoughts on the IT Services industry. I’ve always said it is the most complicated, simple business I’ve ever experienced. There are "commoditization" and margin pressures from every direction. The strength and direction of the pressure of course depends on the type of services offered. Unfortunately, there is always a lower-cost model competitor. Keep in-mind that customer survey data typically shows pricing about 4th on customer’s list of vendor selection criteria. Try to convince the business users of your offer’s unique benefits, they will be much more valued there than in the purchasing organization. Regarding your KAM questions; I think KAM investment is the only way to differentiate and survive in a recession market. You may also need to consider using the key account marketing program as part of a larger, more defensive strategy to maintain market share and critical mass (for now) to live-on and fight another day. Also, I would consider supplementing your Porter “forces” model thinking with one from the Blue Ocean Strategy. http://www.blueoceanstrategy.com/abo/what_is_bos.html The person or team responsible in your organization for innovation, including differentiated strategy and messaging, may need to create some unique new service offers, methodologies, approaches and templates. Once done, the KAM program will be invaluable helping you deliver your messages to the audiences you’ve targeted.
Hi Juan, Welcome to the world of large account solutions marketing. A major benefit of a KAM program is the synergy it creates between marketing and sales efforts. This efficiency created alone can pay for the KAM program investment. The pilot approach allowed us a safe and somewhat sheltered development environment to learn and perfect the program as we went. It also ensured we were on-track to achieve the highest ROI possible from the program investment. Regarding client buy-in for a KAM project. Like in any potential consulting engagement, you’ll have to prove to prospects you have the models, templates and experience to implement their program faster with greater quality and less risk than they could do themselves. The accelerated account growth and ROI you provide should far off-set your fees.
Hi Ryan, Thanks for your comment. My experience drawn upon for this article was implementing a key account marketing program as part of a global marketing team for a $7B consulting business. We were market planning for 7 major service offers, from technology implementations to operations improvement to business strategy. My suggestions are meant to save companies planning similar “market of 1” account investments time, money and risk. Here are a few more details about our investment. Our KAM program funding request was led by our global CMO who sought approval from a senior investment committee comprised of a global geography, service offer and industry profit and loss leaders. The design, implementation and operation of the program was then assigned to a senior marketing project team selected by our global CMO. This more hands-on implementation team included geography sales and marketing leaders, industry and services marketing leaders, a global brand manager, a thought leadership marketing leader and a full-time key account marketing program “owner”. This team then selected and assigned one dedicated, high-performing key account marketer to each account targeted for investment. The responsibility then fell on the program project team (us), sales, the key account marketer and the account team delivery staff to prove program value and secure long-term funding based on investment return. KAM program investments will vary based on your cost of marketing personnel and the availability of leading-edge, thought provoking marketing materials relevant (or relevant with minor customization) to the targeted account. If relevant and differentiating marketing materials are not available within your organization, you’ll need to budget additional funds to develop new, more noteworthy materials and/or research to distinguish your organization's value as a business partner.
I can tell by your comments you have experience on the baseball diamond. Diplomatically declining to respond to "blind" RFPs, ones your organization didn’t help influence or develop, can be one of the most effective ways to increase overall sales productivity. Research tells us sales organizations have < 4% chance of winning an RFP they didn’t help “shape”. Sales organizations are much better off reallocating time not spent answering blind RFPs to building relationships with top prospects. One of the goals of a well designed KAM program should be to reduce the number of times you receive blind RFPs. An effective KAM program should provide a more intimate customer relationship earning your organization advance knowledge of the account's business issues and plans to solve them, including budget, hopefully sooner than competition. If you would like more detailed information on this topic, review “shifting buyer concerns” in Michael Bosworth’s Solution Selling:Creating Buyers In Difficult Selling Markets book. Also, thank you for your input adding a 5’th recommendation. From the client’s perspective, external resources being perceived as knowledgeable on the client’s business as their internal staff is the ultimate compliment.