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"Strategic Account Management in Practice - common mistakes and critical success factors" - Το Key Account Management στην πράξη
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Bart Logghe - PhilipsSales Management Forum - September 21 2007 - Athens
Strategic Account Management in practiceCommon mistakes and critical success factors
2CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Many of Philips businesses face similar customer challenges
Identifying, selecting and growing our business with the right accounts will determine success or failure!
– Increased concentration of sales with fewer customers – The top accounts are getting bigger and bigger– The power balance favours the customers– Increasing pressure on prices and margins– Increasing cost to serve– Organisations & systems are often structured per country or
product and not per account– The profitability per customer is unknown
3CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
SAM is all about resource management
• Making choices how to utilize time, resources and money
• Which customers to invest in?
4CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Strategic intention customer
Stra
tegi
c in
tent
ion
Philip
s
transaction
cooperation
partnership
integrationWASTE
RISK
Strategic AccountManagement
The development of Strategic Account relations
5CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Today Philips is structured in two dimensions
Europe Middle East & Africa
North America
Latin America
Asia PacificRegions (Aligned by
geography)
LightingConsumer Electronics
DAP
Medical Systems
PD’s (Aligned by products)
6CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
We have many Multi-PD, Multi-Region Customers
’
7CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Philips becomes a “THIRD DIMENSION ORGANISATION”
Europe Middle East & Africa
North America
Latin America
Asia Pacific
Retail
Hospitals
Hotels
Aligned by:• Key Account Customers• Industry Segments• Customer Groups• Channels
Regions (Aligned by geography)
LightingConsumer Electronics
DAP
Medical Systems
PD’s (Aligned by products)
Wholesale
Others
Auto-motive
Telecom
“Third Dimension Organisation”
8CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Philips 10-Step SAM Approach
1. Strategic Account Selection2. Strategic Account Plan3. M&S Competencies framework (incl. job description)4. Strategic Account Manager selection process5. Management Development, training, coaching6. Account +market information system7. Contact Network8. Contact Report9. Internal Review10. External Review
Plan
People
Info
Review
Remarks:Ø Step 1, 3, 4, 5 and 6 should be covered at the BU/BG level Ø Step 2, 7, 8, 9 and 10 should be covered per Strategic Account
9CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
We have segmented our retail accounts according to global, international and local reach
Partnership
Performance
Wal-MartCarrefour
Tesco CostcoMetro
DSGBest Buy
Ahold Casas Bahia
KESA
Auchan
TargetHome Depot
EDA
Casino
Circuit City
Euronics
Sears
Expert
Regional Key Account
Management
Global Key Account Management
N
D
EB
D
E
M
GLocal Key Account Management
High
High
LowLow
EP
Amazon.com
10CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Sales Top 20 retailers
02000400060008000
1000012000140001600018000
2004 2005 2006 2007 2008 2009
Top 20 accounts Philips B2C Business Linear (Top 20 accounts)
The importance of Philips top 20 accounts continues to rise
32%
43%
Source: Management Ventures Inc/Philips Market Intelligence
11CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Philips is showing continuous and profitable growth with its top global and international accounts
Results: 2006 YTD December – per PD
International Key Accounts
Global Key Accounts
Consumer Electronics
Domestic Appliances and Personal Care
Lighting
Total Global key Accounts
Sales YTD 06 Sales YTD 05
Consumer Electronics
Domestic Appliances and PersonalCare
Lighting
Total International Key Accounts
Sales YTD 06 Sales YTD 05
+15%
+28%
+16%
+9%
+9%
-2%
+15%
+10%
12CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
US CE recognized as Vendor of the year at SAM’s USA – 2005 and 2006
Carrefour Best supplier of Masse de Marge – Spain- DAP-2006
One Philips Award –Gold and employee vote for One Philips Wal*Mart Approach- 2006
Through which we have received significant recognition
Best Buy Bravo Award (CE)- 2005Comet Awards (CE UK) - 2005Carrefour – Best Supplier 2007 (CE)
Wal*Mart – One Billion Dollar Supplier 2006
13CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
We are investing heavily in state-of-the-art key account management and sales competencies
• More that 1,750 Philips employees trained in 2006 in the field of key account management/sales and category management
• Joint training programs on category management with key retailers focusing on end user – and shopper insights
• Master classes on Driving International Key Account Management and Alignment with business management executed for executive management in all regions
• Succession plans and management development programs in place for GKAM’s and IKAM’s
14CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
In benchmarking ourselves against leading FMCG companies we show clear areas of strength
Companies interviewedCoca-Cola Heineken
Johnson & Johnson
Sara Lee Unilever
Diageo Nestlé
Philips is clearly leading in people competency management and account profitability measurement, but can improve multifunctional key
account management/customer centric organisation.
15CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Common Mistake # 1Strategic Account Management is regarded as part of the Sales Function
16CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Common Mistake # 2Strategic Account Managers have no P&L responsibility
17CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Common Mistake # 3Strategic Account Management is not discussed in the Board room
18CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Common Mistake # 4Strategic Account Management equals Relationship Management
19CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Critical Success factor # 1Strategic Account Managers need focus and dedication
20CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Critical Success factor # 2Strategic Account Plans focus on strategic alignment
How to align the customer’sstrategy with our strategy?
Strategy comes beforeaction planning!
21CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Critical Success factor # 3A comprehensive SAM Program is required
22CONFIDENTIAL Sales Management Forum - September 21 2007 - Athens
Critical Success factor # 4Communication is integrated in the key account management system