AIM Industry Trade Committee Meeting Brussels, January 27, 2011
Suppliers get the global customers they deserve...So, are you investing to get what your company needs?
© Prof. Christoph Senn, Account Management Center (AMC)
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Contrasting internal views of GAM
“We don’t want to implement a global account management program because that will just allow our multinational customers to get a bigger price discount from us. It’s a lot of effort for little or even negative return.”
“Our global account management program is essential for the retention of our most important multinational customers and it contributes in a major way to growth in both revenues and profits.”
(Source: Yip, 2009)
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Agenda
1. The race has already started: Three reasons
2. How to make GAM Programs really work: Insights and examples
3. Implications for own GAM business and industry: Breakout sessions
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
The race has already started – Three Reasons
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
The race has already started – Three Reasons
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• The increasing importance of global customers
• The quest for customer-centric sales models
• Differing views of global business potential
© Prof. Christoph Senn, Account Management Center (AMC), 2010
The increasing importance of global customers
Chocolate producer Barry Callebaut announced closer strategic cooperation with Nestlé, Hershey’s, and Cadbury’s – share price rose 50 percent overnight.
European energy firm declined to introduce a global account program for multinational customers. Leading customer switched to a competitor. Total firm revenues dropped 12 percent, share price fell sharply.
IBM switched to global procurement for public relations. Britain’s Text 100 won the contract; U.S. incumbent agency TSI lost entire revenues and laid off 70 percent of employees.
Ypsomed announced that order volume for insulin pens from it global customer Sanofi-Aventis would be lower than expected. Share price dropped 23 percent in one day and CEO was replaced.
(Source: Capon, & Senn, 2010)
© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 7
The quest for customer-centric sales models
Country
Product
Customer
Future
Source: AMC, Senn (2006).
© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 8
Differing views of global business potential
EXAMPLE – Supplier‘s proposal: „We define a strategic business relationship between your company and XYZ Corp. as a long-term commitment dedicated to lowering costs and increasing revenues for both companies“.
(Source: AMC)
EXAMPLE – Customer‘s response:„You should be doing five times the business with us if you got your act together. You work with most of our organization but focus on nothing!“
(Source: AMC)
Supplier Global CustomerReality Gap
© Prof. Christoph Senn, Account Management Center (AMC), 2010Page 9
The surest way to lose the race is lack of alignment and engagement as measured by degree of collaboration excellence
Supplier Customer
Strategies
Solutions
People
Relationships
Processes
Structures
Knowledge
Systems
Information
Alignment + Engagement = Value Creation
Source: AMC
© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 10
Our research shows that many companies have only adopted a solid “Global Account Selling" approach ...
Strategies
Solutions
People
Relationships
Processes
Structures
Knowledge
Systems
Information
Source: AMC
© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 11
... but are lacking a systematic “Global Account Management" view on value creation with their most important customers
Strategies
Solutions
People
Relationships
Processes
Structures
Knowledge
Systems
Information
Source: AMC
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Agenda
1. The race has already started: Three reasons
2. How to make GAM Programs really work: Insights and examples
3. Implications for own GAM business and industry: Breakout sessions
Page 12
© Prof. Christoph Senn, Account Management Center (AMC), 2010
How to make GAM Programs really work: Insights and examples
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
How to make GAM Programs really work: Insights and examples
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• Acknowledge industry-specific situations
• Pick the right „type“ of GAM program
• Prepare for and overcome internal resistance
• Focus on relationships with „booster“ potential
• Implement with a 10-15 year planning horizon
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Acknowledge industry-specific situations
LowLow
High
HighGlobal Integration
The best computer company
The GAM Frontier
The best chemical company
The best bank
LocalAutonomy
A1
A2
B2
B1
C1
C2
(Yip, 2006)
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Pick the right „type“ of GAM program
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Power balance betweencountries and customers
Coordination GAM
Country-based salesoperation with GAM acting as coordinatoracross countries
Control GAM
Balanced matrix, GAM reports to both countrysales manager andcorporate executive
Separate GAM
Firm structured firstaround global accounts and customer groups; countries secondary
(Sources: Arnold et al., 1999; Yip, 2007)
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Prepare for and overcome internal resistance
Cost-to-serve
Margin
Margins reduced byextra volume discounts
Costs increased by new GAM structures and processes
(Arnold, 2002)
© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 18
Focus on relationships with „booster“ potential
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Collaboration Excellence
Shar
e of
Wal
let
Protect
Improve Boost
Maintain
Optimize
Secure
(Source: AMC Client Project)
© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 19
Example: Turnaround of a B2B supplier-customer relationship
Red Flags in almost all collaboration areas; but significant growth potential
Collaboration Excellence Cockpit Identified weaknesses1. Strategic level: No direction at all2. Functional level: No integration3. Organizational level: People issue
Implemented consequences"Reset" of relationship supported by top-management and nomination of new, full-time global account manager
ResultsProfit (net margin) +150 K€ p. month;new three-year contract worth 50 M€
(Source: AMC Client Project)
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Implement with a 10-15 year planning horizon
Dead-End
Limited
Lim
ited
Deep
Bro
ad
Pilot
Embedded
„Afterburner“
„Rebound“
Springboard
Source: Capon and Senn (2010)
GAMProgramCommitment
GAMProgramScope
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Example Applied Materials: GAM is a strategic choice and not just a costly marketing accessory
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810
500
1000
1500
2000
3000
4000
5000
6000
7000
8000
9000
MUSD10000
Founded in 1967, low growth period until 1987
1987: Decision to implement GAM (clear focus on fastest growing global customers, no exclusive contracts)
1988 – 2000: Strong growth period
2000 – 2010: Hit by several industry slow-downs, but fast recoveries
Today: Dominates the industry
(Source: www.appliedmaterials.com)
8382 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 0480 05 06 07 08 09 10Year
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Example P&G: Focus on global accounts as integral part of corporate strategy
78 bn 54 bn
12 bn
12 bn
100% 68% 16% 16%
• P&G’s largest global customer, Wal-Mart Stores Inc., accounts for 16% of P&G’s consolidated net sales (2008, 2009, 2010)
• P&G‘s top 2-10 global customers represent an estimated additional 16% of total business
• P&G‘s top-ten customers grow between 5-10% faster than rest of business (e.g. +8% in 2008)
(Sources: P&G Annual Reports 2003-2010, all figures in US $)
Suppliers get the global customers they deserve...So, are you investing to get what your company needs?
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Agenda
1. The race has already started: Three reasons
2. How to make GAM Programs really work: Insights and examples
3. Implications for own GAM business and industry: Breakout sessions
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
Breakout sessions: Basic idea
To have an intensive, revealing, and entertaining discussion on select topics related to “Global Account Management Implementation”
Groups discuss with each other and share their ideas and insights
Ideas, lessons learned and conclusions begin to link and connect as groups “travel” from one table to the other
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
Breakout sessions: Guidelines
Three topics, three rounds of conversation (10 min. each)
Every table discusses all three topics
Write, sketch, or draw your main ideas on the tablecloths
One person remains at the table as the “host” – briefly summarizes prior discussions at the start of each round
All other guests can freely move from one table to another (after each round) and act as “ambassadors of meaning” who carry key ideas into new conversations
Final wrap-up of the conversation results by the table hosts and Christoph Senn
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
Breakout session questions 1 – 3
Question 1: What are the obstacles for implementing cross-functional collaboration with global customers in your firm? How can you overcome those obstacles?
Question 2: What are the key challenges in providing global customers timely access to information? How can GAM leaders deal with those challenges?
Question 3: What are the risk / dangers of demonstrating the value of GAM efforts too aggressively to stakeholders ? What can be done to deal with these risks?
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
Implementing GAM is a Business Transition, not a Project
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„Global account management is the ultimate test for global business. If you are fit for GAM, you are fit for global business.
The launch and implementation of a GAM program is a significant strategic move in a company with a well-entrenched tradition of geographic and/or country line management.
It requires significant investment in resources of a different caliber than those available for business as usual, over an extended period of time, as well as the highest level of management support.
In essence, GAM has two consequences: First, it is a growth driver, but second, it is also a change driver.“
Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric SA, 2008
© Prof. Christoph Senn, Account Management Center (AMC), 2010
Global Account Management – Recommended Literature
CAPON, N.; SENN, CH.: Global Customer Management Programs: How To Make Them Really Work, in: California Management Review, Vol. 52, No. 2, Winter 2010, p.32-55.
THOMA, A.; SENN, CH.: Global Account Management. In: Encyclopedia of Business in Today's World. Thousand Oaks, CA : SAGE Publications, 2009.
CAPON, N.; POTTER, D.; SCHINDLER, F.: Managing Global Accounts (2nd ed.), Bronxville, NY: Wessex, 2008.
YIP, G.S.; BINK, A.: Managing Global Customers: An Integrated ApproachOxford: Oxford University Press, 2007.
SENN, CH.; THOMA, A.: Worldly Wise: Attracting and managing customers isn't the same when business goes global, in: The Wall Street Journal, in collaboration with MIT Sloan Management Review, East. Ed., S. R6, 2007.
YIP, G.S.; BINK, A.: Managing Global Accounts, Harvard Business Review, 2006.
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© Prof. Christoph Senn, Account Management Center (AMC), 2010
Global Account Management – Upcoming People Development and Practice Sharing Opportunities
Customer-Centric Leadership
4th Global Account Manager Certification Program (GCP)
Winning and Keeping Global Customers
11th GAM Executive Program (GAMPRO)
Identifying next, Best Practices in GAM
Global Account Management Forum (2012 onward)
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© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 31
© Prof. Christoph Senn, Account Management Center (AMC), 2010 Page 32
Making Customer Management Work
AMC Account Management Center Frankfurt – New York – Zurichwww.amc.com