Section 2 - Key Account Management - Core Skills - Critical Success Factors in the Transition to KAM

Transcription

1 Section 2 - Key Account Management - Core Skills - Critical Success Factors in the Transition to KAM 1. This presentation looks at the Core skills required in Key Account Management and the Critical Success factors that need to be in place for a company to successfully transition to a Key Account Management Approach. 2. First we will look at the core skills required to become a Key Account Manager 3. Successful Account Management requires 6 core skills. Such skills may be already present in a good salesperson, or additional up-skilling may be necessary. These 6 skills areas are; Commercial Awareness, Account Planning, Customer Relationship Management, Influential Selling, Influential Negotiation and Colleague Relationship Management. We will now look at each of these areas in more detail. 4. Being commercially aware is about fully understanding the context within which you plan to do business. Firstly this requires that you identify key external factors that can influence sales. These may be Political, Economic, Social or Technological. Understanding these factors fully will enable you to better see how and why your customers make the decisions that they do through knowing what are their needs and drivers. Always keep your company s internal financial targets and pressures in mind so that you can make sound business decisions in relation to individual accounts such as deciding on what is the appropriate investment level in order to develop business with a customer that will result in a solid return in sales. An accurate financial forecast should be created and maintained for every key account. These should lay out the exact amount of resources and their associated costs that you plan to invest in a customer, and what level of business you expect to produce as a result.

2 5. Having created your forecasts, performance versus budget should be monitored on a regular basis, for example monthly, quarterly, half-yearly. This enables you to proactively identify under-performance in any accounts and to take corrective action in a timely manner. Look for opportunities to deliver alternative costeffective ways to support customers which add value to both parties. For example, marketing is a key internal resource for most Pharma companies but not typically a strength among healthcare providers. Providing additional marketing support for a customer-led project therefore would require little financial investment but would have a very high value for the customer. Opportunities may also be found to maximise financial returns through collaboration with 3rd parties; for example co-sponsorship of an event or project with another company where there is no conflict of interest or where complimentary agendas may exist. 6. Planning your accounts thoroughly is a cornerstone of the Key Management Approach. We will be looking at Account Plans in greater detail in Section 3. However as Account Planning is one of the core skills of Key Account Management we will briefly cover some of the main points here. It is essential that you seek and document detailed and accurate information on key accounts in the form of account plans. This information is then used to plan the strategy for each account. A SWOT analysis to identify strengths and weaknesses, opportunities and threats, and SMART objectives for each customer group within an account should all be incorporated into the account plan. Remember that objectives and strategies should be aligned to the customer opportunities that are likely to be present within a given account. 7. When dealing with any account, issues and barriers to business will arise and these should be identified and solutions created to overcome them. Creative brainstorming can generate a range of options from which the most appropriate can then be selected. Make sure to utilise all the expert internal and external resources that may be required to overcome challenges and achieve the set business objectives. Information and activities from all company functions should be incorporated into the business plan, not just your own. Key elements of data such as sales figures can be used to manage accounts day-to-day, and other background details can be accessed as required.

3 8. Excellent customer relations is not just about having a good rapport with a customer. It requires the Key Account Manager to possess an in-depth understanding of individual customers needs. This understanding then enables the development of solutions to those needs that are mutually beneficial to the company and its customers at all levels; prescribers, payers and patients. It is vital that you be open and honest with customers about how any proposal will benefit the company, while at the same time meeting the needs of the direct customer (physician and/or payer) and ultimately the patient. If a proposed project or solution does not meet the needs of all 3 parties then it should be rejected. The exception to this may be when you are at the beginning of a relationship with a new customer such as a payer. At this point you may be willing to deliver on solutions that will be of benefit to the customer and the patient, but which may not have much or any return for the company at that point. Choosing to implement such solutions is a strategic choice with the objective of building solid integrated relations with the customer in the future. 9. As we will see in Section 3 not all accounts will have the same business value. A core component of Key Account Management is a commitment to rigorously prioritise accounts and allocate time and resources accordingly. Another element of good customer relations is to aid customers in recognising and meeting needs they may not be aware of. Shared objectives with key decision makers allow for the development of strong business relationships. The Key Account Manager should ideally be the one to facilitate the introduction of other company functions to customers when appropriate. This ensures a streamlined approach between the company and the customer. 10. Traditionally the pharmaceutical industry has been very product focused. Getting the customer to prescribe the product was the main focus of all companies activities. Influential selling however seeks to understand and acknowledge the real needs of the customer in order that genuine value propositions can be developed. The product therefore should be just one element of an overall value proposition designed to deliver enhanced patient care. The customer should feel pulled towards an integrated solution for the needs of their customers (i.e. the patients) rather than pushed towards a specific product. Any value proposition should be clear, concise and tailored to the needs of the individual account, both clinical and commercial. A one size fits all approach is no longer appropriate. It

4 may be helpful to seek and use account specific financial information when building proposals; for example, how many bed days are currently taken up by patients receiving IV antibiotics, what is the cost per day, and what savings could be made by the use of effective oral antibiotics. Ultimately the best solutions will be created when both customers and other internal specialist colleagues, (e.g. marketing, health economist) are involved. 11. When drawing up value propositions and solution in collaboration with the customer it may be necessary to negotiate different options so that the needs of all 3 parties - company, customer and patients - will be met. To negotiate effectively it is important to be aware of what environmental factors may exist that may influence the negotiation process either positively or negatively. We referred to this previously in the Commercial Awareness piece. It is helpful to draw up a wish list that reflects the interests, priorities and values for both the company and the customer in order to decide where shared objectives may lie. Understanding the costs and implications of any asks that the customer may have is essential if you are avoid agreeing to something that may not prove costeffective for your business or that may have negative consequences further down the line. Be prepared with a variety of optional proposals in anticipation of a negotiation. That way if a customer s requests are not in line with your business strategy you have immediate alternatives to offer them. Ideally any solutions proposed and agreed should draw on the existing expertise and resources of your business, e.g. marketing, PR, project management. These services while of relatively low cost to you provide high value to the receiving customer and should therefore be key elements of any proposed solution. Effective negotiation is a skill that is not typically used on a daily basis within the normal sales call and additional training and up-skilling in this area may therefore be required.

5 12. Other important aspects of negotiation skills include; - Awareness of the short, medium and long term cost and benefits of any option, both for the company and for the customer - Anticipation of potential barriers and issues that may arise and preparation of a response to them - Be prepared to say No respectfully to any requests that the customer may have if they will not deliver a good business outcome - Be open to exploring other proposals which may be more beneficial and costeffective - If a proposal may have associated risks ensure that you place conditions on it in advance; e.g. ensuring full communication of proposed project with all members of staff that may be involved. You do not want to take the risk that some key prescribers would be opposed to such a project and will not appreciate the involvement of your company. - As mentioned negotiation is a skilled process and abilities such as intelligent questioning, active listening, clarifying and summarizing may all need to be developed by a Key Account Manager in order to be carry it out effectively. 13. Key Account Management is a team approach to interacting with customers. We have already identified that companies are in the process of creating many new internal roles and these colleagues/stakeholders will all have an input or interest in an account. In order to maximise the business potential in each account it is therefore vital to build effective cross-functional relationships with these individuals. The foundation for these relationships is excellent communication links across all the relevant functions. Such links may be based on shared account plans, group s and regular scheduled cross-functional meetings where appropriate. 14. Such communication links should enable the Key Account Manager to impart the relevant account information and insights that they have acquired to these colleagues. In turn you should seek to learn what other account information they might have and use to build a complete picture of a given account. It can be very easy for a situation to arise within a company where different roles have individual agendas and objectives and the result is almost an internal competition for key customers and accounts. This reduces the overall effectiveness of the company s interaction with the account as well as often putting pressure on customers who may be faced with a plethora of individuals

6 from the same company who may not have a shared purpose. By creating compelling shared business objectives for key customer accounts the Key Account Manager can ensure a streamlined, co-ordinated approach between the different roles and functions and their customers. Effective Account Plans which contain tools such as the Relationship Matrix are a core element of organising and maintaining this co-ordinated approach. It is important to remember that while it may be the task of the Key Account Manager to pull together the different activities of his/her internal colleagues, such colleagues are often peers or even senior to the KAM with no direct reporting lines. Therefore the ability to influence without authority is a crucial skill of the accomplished Account Manager. 15. In summary then, successful Account Management requires 6 core skills; Commercial Awareness, Account Planning, Customer Relationship Management, Influential Selling, Influential Negotiation and Colleague Relationship Management. Such skills may be already present in a good salesperson, or additional up-skilling may be necessary. 16. Now let s look at the factors that are critical in achieving the successful transition to Key Account Management within an organisation. 17. Understanding of Key Account Management is very diverse and varies widely from person to person and company to company often depending on their background. Sometimes it merely involves a re-labelling of the sales representative role. Other companies create a team of people from across the business whose task is to introduce a product or solution to customers, either individuals or organisations. Even within companies there can be much confusion and debate about what key account management is and what their own Key Account Managers should be doing. Therefore in the evolving pharmaceutical marketplace currently the Key Account Management role and structure may vary widely depending on the different needs and strategy of different organisations.

7 18. A Critical Success Factor (CSF) is something that must be gotten right in order to achieve your stated objective. Firstly companies wishing to move to a genuine Key Account Management Approach with their customers need to challenge and change their mind-set. Critical Success Factors exist at all levels of the Account Management process as we will see further in Section 4. However a number of pre-determining Critical Success Factors are required at a top-line organisational level, if these are not in place they may become barriers preventing the full implementation of a pure Key Account Management approach within the organisation. 19. Successful Key Account Management requires a co-ordinated proactive company approach: if implemented as a stand-alone role it will not have the same potential to drive business. Multiple company contact points with the same customer require precise co-ordination and alignment. Value propositions and messages need to be tailored to individual stakeholders, not mass produced. A culture and mind-set which tasks people with proactively seeking, recognising and maximising opportunities as they present will ensure that all avenues to increased sales are exploited. Key Account Management should firmly reject the traditional emphasis on coverage, frequency and activities and replaces it with a focus on networking, planning and prioritisation. 20. This in turn requires a clear acknowledgement that not all accounts are of the same importance. Therefore what is needed is a willingness to direct company time and resources to specific customers based on account prioritisation and potential, and not on ease of access or positive personal relationships. Such an approach puts the business focus on long term strategic outcomes not shortterm tactics and gains. This major shift in the way that companies view their business demands a full commitment to a change of mind-set company-wide if it is to be fully implemented. 21. This change of mind-set will see the emphasis shift in a number of key areas. It is no longer about how many customers seen but about which customers are seen (i.e. the key accounts). Outcomes not activities are a measure of success. Long term commercial rather than personal relationships need to be developed. The focus should be on providing solutions to the customer not just making sales. Key product messages are replaced with compelling value propositions. The objective is to create win: win partnerships for both sides that will sustain and drive future business relations, sales and positive patient outcomes. In order to achieve these outcomes re-training of sales people on additional skills such as

8 people management, project management, negotiation, account planning and environment knowledge will most likely be necessary. 22. While the concepts we have discussed in the previous slides are critical to the implementation of an effective Key Account Management strategy, there are a number of existing barriers to putting these elements in place in the industry generally and within individual companies. Traditionally we may have been product not customer focused, also Key Account Management is often perceived as being only about contracts and tenders. While new positions are created and put in situ, caution is advised around a lack of a co-ordinated approach, leading to frustration and confusion both between colleagues and among customers. Because the skill sets and competencies differ from those of traditional sales, albeit with many overlaps, significant re-training of existing colleagues may be required and may not always be carried out. Ensuring an agreed understanding of what Key Account Management means for your company is essential in order to implement an effective Key Account Management Strategy but often the process is only partly implemented, resulting in mixed outcomes and successes. 23. In summary then, we have seen that a successful transition to a Key Account Management strategy within a company requires a number of Critical Success factors including a company wide-change in mind-set. There are many potential barriers to its implementation and a clear awareness of these and how to overcome them is critical to future success. Now lets move to the final presentation where we will look at the Key Account management process and Account Plans.