With a price war breaking out, is it
time to read your job description and think how much emphasis is put on
relationship building within the account and whether you (and your colleagues)
can tick all of the boxes? Now think how far you need to go to achieve a special
relationship, focused on joint value creation, that captures key growth
opportunities whilst helping the customer to focus price investment where it
matters…
The Essential
Multi-functional/Multi-faceted Dimension
So we know that the KAM has to develop
a multi-functional/multi-faceted relationship within the account, in order to
not only get the job done, but importantly grow the business and generate
value-adding projects to balance the constant threat of price erosion from
stopping still.
From in-store execution of promotions,
following listings through to planograms, getting in-store marketing away and
producing accurate forecasts, the KAM needs more than the support of the buyer
to deliver the basics of what has been agreed (and paid for!).
To create joint value, grow the
business and deliver like-for-like sales increases for the retailer, the KAM
needs the broad support of the trading team to get new ideas away – especially
if this involves the customer doing extra work e.g. creating a seasonal feature.
Realising Relationship Goals
In order to meet
relationship objectives, the KAM has some options:
-
to fire-fight
and rely on personal charm to smooth over problems as a “jack of all trades”
-
to turn up
with more colleague each time until they have all met the buyer, or the
buyer feels unfairly outnumbered and starts inviting colleagues along for
support
-
to chuck a
“wildcard” into each meeting, as an excuse to bring along colleagues, even
though the buyer is not sufficiently prepared or close to the topic to make
real progress
-
to tackle
this as a real priority and develop a “Customer Development Experience”,
designed to create value and growth, away from the normal day-to-day issues
e.g. price increases
What Is A “Customer
Development Experience”?
A “Customer
Development Experience” is a dedicated, off-site session, focused on sharing
information, looking at the longer term trends and generating new ideas to
create joint value and increase sales and profits.
The customer is
invited by the KAM and a joint agenda is agreed, involving both business teams
(normally 4 or 5 from each company).
The session is
externally facilitated in order to be credible, thus avoiding bias or potential
conflict, and importantly to ensure that the end result is achieved – a shared
project shortlist focusing on those with the greatest joint value. Choosing a
facilitator with practical experience of customer marketing is therefore
essential. (Tip: Avoid a company Director taking this role, or an academic – the
former is too close and the latter too far removed.)
The process is
geared around joint exercises, rather than presentations, and involves both
companies working together in groups and making joint proposals for evaluation
by all. At the end of the session, all of the proposals are evaluated and
prioritised, with a commitment to do further work on maximising value from at
least two new opportunities.
What Can Be Achieved?
Consider two real
and different examples:
Example A:
The supplier
had a very pressing need to develop a better working relationship with a top
multiple account. The relationship was confrontational and even disruptive, when
it came to new product launches that were well received by the rest of the
trade. The supplier lacked its fair share of promotions and under-traded.
During the
Customer Development Experience, both parties were surprised at how well they
worked together and they both committed to a shortlist of projects.
Following the
session, the cross-company team worked on developing a new category occasion,
with the supplier having an exclusive run on it, with off-shelf support.
Day-to-day
relationships improved significantly and the supplier was soon invited to
provide an objective analysis of non-competing listing proposals from
competitors. Whilst adding value to the customer, the supplier began to see its
share of the category advance.
Example B:
The supplier had the dominant share of the customer’s business and a very good
existing relationship. However, both parties needed to generate new ideas to
grow their joint sales.
A “Customer
Development Experience” was designed to explore opportunities in the wider
market and, as a result of sharing information and ideas, an entirely new range
of products was developed to meet this need, with the supplier having exclusive
supply.
Of course, the new
range had winners and losers, but the customer’s share of the usage occasion
advanced and the supplier’s sales with it. A classic example of joint value
creation.
Fit With Category Management
A “Customer
Development Experience” can fit inside or outside Category Management. It is a
simple and fast way to identify joint business opportunities (or sources of
joint value creation). Importantly, in generating a joint understanding of the
opportunities, the cross-company team has already begun working together and
focusing on their future together. In itself, it is a very enjoyable and
productive experience.
It can front-end
the CM process, to provide focus on new opportunities (rather than process), or
it can run as a relationship-building project in its own right.
Getting Started
As a KAM, you can
begin sending out signals to the buyer that there’s a lot of support for them
within the company and eagerness to look at some new projects.
As long as you are
not asking them to take on extra work, just attend a session with colleagues to
exchange ideas, you’ll be surprised at how receptive the customer can be.
Once you get the
signal, be first in and make the most of the opportunity….
For further information on designing and facilitating your Customer Development
Experience, please contact Barney Byfield at POW Marketing Ltd on +44 (0) 20
7993 6137, email:
team@pow-marketing.com,
web:
www.pow-marketing.com
KAM IMPLICATIONS:
-
Why not
calculate the value to your business of reversing, say, a 3 per cent
under-trade into a 3 per cent over-trade?
-
What-if
your customer could tap into a new usage occasion – what extra sales would
that generate for the customer?
-
What if
you and the buyer could mobilise colleagues around new opportunities to
create joint value……?
-
What if
the buyer doesn't ask you where price investment really matters within your
category......?
Date
article published: 06/2007
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