Consumer Goods Key Account

Management: Best Practices

A perspective on the issues

John Sergeant Associates Tel; (02) 9972 9900 Email; [email protected] Website;
www.jsasolutions.com
 Best Practices in Key Account Management

Consumer Goods KAM: Best Practices

Contents
Pages
1. Purpose of this paper 2
2. Macro view of Account Management Effectiveness 34
3. Robust Foundation of Sales Strategies 56
4. Key Account Strategies 79
5. Best Practice Processes 10 11
6. Driving KRAs at Store Level 12
7. Category Management: Friend or Foe? 13 14
8. The Account Manager, Today and Tomorrow 15 16
9. KAM Team Development 17 19
10. Examples of JSA Major Customer Development Projects 20

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1. Purpose of this Paper

JSA has been active in consulting and training in consumer goods key account
development since the 1980s. In Australia, our home market, we see one of the
worlds tightest concentrations of buying power, which leaves suppliers struggling
when it comes to initiatives in consumer market development or relationship
management.

There is no opportunity (yet!) to leverage global relationships, and the cost of doing business rises inexorably.
This demands high levels of efficiency (best practices). Account Managers must create the time to finesse
every opportunity to influence the way the game is played.
In emerging markets (we have extensive current experience in Asia) the global players such as Tesco, Wal-
Mart, Carrefour and Makro have telescoped a 20 year change process into just 2 3 years. Suppliers need
exceptional clarity of strategy, state of the art processes and the experience and resolve to hold firm against
the precedents that have diluted supplier profitability in mature markets.
This paper selectively illustrates JSAs views on Customer Development Best Practices from a broad view of
Account Management Effectiveness, through strategies, planning, processes, executional excellence to
Account Manager development.
It is complemented by an Account Management Best Practices audit questionnaire on our website at
www.jsasolutions.com.

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2. Macro View of Account Management Effectiveness

ACCOUNT STRATEGIES
Global Sales Strategies
translate easily to single
store.
Global, National, Business
PRODUCTIVITY & Unit, Channel, Key Account ORGANISATION &
COMPETENCIES and field strategies well SYSTEMS
aligned.
Best practice processes to
Productivity roadblocks Creativity in Account deliver strategy:
removed. Strategies. data management, account
- dominance at outlet level profiles, account planning,
Initiative and risk taking - marginalising competitors promotional control, presentation
encouraged. - service differentiation generation, in-store execution etc.

Learner driven Continuous flow of new Organisation to reflect our

development. initiatives. stratic thrust (not just the
Learning through creation of accounts need for Category
best practice processes and Management data crunching).
new initiatives.
Clear Roadmap Seamless Performance
Focus on executional Management.
excellence. Consistent KRAs from Sales
Director to Rep with measures in
See notes overleaf place.

Getting there faster Robust Engine Room

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Account Management Effectiveness: Notes

Account Management
Roadmap: Account strategies developed in the context
effectiveness is a combination of of a well articulated and understood sales strategy ideally
so simple that strategies translate easily to a single store.
clarity of direction (strategy), a
robust engine room (people,
organisation, processes) and the
ability to get anywhere faster Engine Room: The right people, in the right accounts,
doing the right things to produce the right results
(productivity and competencies). supported by best practice processes for planning,
execution and performance management.

Most of the top 5 suppliers in any

market do many things well, all Getting there faster: Productivity road blocks
removed; Account Managers willing to innovate, take risks
think they are the best, and most and learn and able to change direction quickly.
could improve significantly!

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3. Robust Foundation of Sales Strategies

In mature markets like Australia and New Zealand, Key

Accounts are the main game.
Examples of Sales Mission

We need a simple sales mission statement and sales

To dominate in distributive strategies so that the army is marching in step individual
account strategies aligned, field team clear on implementation
outlets in support of priorities etc. Without these, the risk is that we follow the
marketings mission to strategies of powerful retailers.
dominate the consumer mind.
The ideal is for Global, National, Business Unit, Channel and
Account strategies to be so simple and well aligned that they
translate easily into action at individual store level.
To meet and exceed consumer
needs on every buying
occasion in every account,
store, aisle, shelf and display.

See Strategy examples overleaf.

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Sales Strategies give context to KAM Strategies

Widespread Distribution and high impact Display
Generate efficient new sources of Growth

Coverage and
Availability
Build Brand Loyalty at POP
Local dashboards to maintain focus
Leveraging Be the everyday Category Captain
Self-measurement, self- Performance
Dashboard Market
management, self-reliance
Knowledge

Consumer
Goods
Maximise Sales impact on Profit Sales Drivers Create customised solutions
Invest in activities that create Return from Superior Present inspiring visions of the
incremental sales and profit Trade Customer way forward
Reward customer performance Investments Engagement Drive execution to maximise
mutual sales and profit
World Class
Sales Force

The right people in the right customers, doing the right

things to produce the right results
Improve engagement, competencies and talent pool

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4. Key Account Strategies

Supplier Goals

(a) Internal
Align with and execute Sales Strategies.
Minimise inter account conflict.
Drive our investment dollar further.

(b) External
Manage account perceptions: the most efficient,
professional, innovative supplier etc.
Be rewarded for our efforts: share of activity, minimal
relationship conflict (e.g. terms!).

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A menu of Key Account Strategies

Profiles, research, reviews.
CLOSE TO THE
Multiple level contact.
CUSTOMER Joint projects.

First input on all major category issues:

CATEGORY
In an environment CAPTAIN - Range, Section size,
where strategy options Planogram, Multi Location,
Promotion Strategy, Pricing.
are increasingly
Open access to data.
constrained by
account policies, we
need multiple
Corporate vertical blocking.
pathways to the DOMINATE
consumer, some of Facings to share.
which will be DISPLAY Best Sellers above share.
unproductive.

All SKUs listed.

DOMINATE Best Seller focus in small store grading.
RANGE

Pay for performance.

WORKING
All investment into activity.
FUNDS

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A menu of Account Strategies (continued)

Permanent Gondola Ends/Pallet Displays.
MULTIPLE Checkouts/Front end Merchandisers.
POINTS OF Miscellaneous racks/bins.
INTERRUPTION

Clear consumer/ impulse buy orientation.

IMPULSE Multiple location/high visibility displays.
PROMOTIONS Rigorous aim high objectives at store level.

Tailor to key stores:

MICRO - range, visibility, weighting, store
promotions, pricing, etc.
MARKETING
Target Store planning.

Rep/Merchandiser frequency/intensity.
SERVICE
Sales Driver Tracking: Store self-sufficiency.
INTENSITY

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5. Best Practice Processes

Sound processes are the foundation for efficient key account communication,
planning, execution and control from which you can aim higher: exercise
creativity, do things differently and delight your customers.

Closer to Customers Key Account Development Plans Share the Vision

Customer Business Partnering

Strategies
Research Analysis Practices

Key Account Opportunity Key Account

Profiles Search Plans

Customer Investment Joint

Wiring to Drive plans Initiatives

Continuous Improvement Executional Excellence

Measurement and Implementation
Control Processes

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Keep KAM processes simple!

The essence has to be simplicity, otherwise task 1 (lower left) becomes a

monthly pump priming imperative at the expense of any strategic account
development initiatives.
Account Managers have some chance of success if they have the right
toolkit:

Performance data at the touch of a button.

Account Managers Account profiles which contribute to effective customer wiring.
only have two main
Comprehensive checklists of ideas.
tasks:
Account Plans which can be expressed on just 4 5 pages.
1. Bring in the
numbers month A Toolkit of promotional options that have worked.
by month. Ability to model promotional options and financial outcomes quickly.
2. Develop their Powerful proformas for all presentations.
Accounts.

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6. Driving KRAs at Store Level

Q. If you cant measure sales by individual
store, and your information system is
too inflexible to measure activity, how STORE SALES DRIVERS
do you drive field sales force (a simple Yes/No scoring on exit)
performance?

A. Focus on the sales drivers and build 1. Core range carried.

an independent performance 2. New lines stocked and in the window (waist to
management system around these. eye level shelf position).
3. Compliance to planogram (chains) or our layout
in place (independents).
4. % Shelf space = market share.
Every Store, Every Call:
5. No out of stocks.
Maximise Availability & 6. All shelf tickets in place/accurate.
Visibility
7. Major promotion compliance (chains) or
Leverage Paid Activity participation (independents).
8. Major promotion commitments increased at store
Maximise Unpaid Activity level.
9. Unpaid secondary display(s).
10. Monthly/cycle priorities implemented.

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7. Category Management: Friend or Foe?

The Scorecard for Category Management is less

encouraging in Australasia than in, for example,
Europe where buying power was less concentrated.
Retailer problems have included:

Attempting to do too much too soon over

complexity; data overload.

Internal cost efficiency focus supply chain costs

(inventory in particular).

Low consumer focus no real micro marketing.

They are just discovering Shopper Behaviour.

Little progress on some key drivers: - efficient

assortment; efficient promotions.

Lack of retailer/supplier trust not surprising: we

compete for consumer mind space and the
survivors are quite powerful (typically duopolies on
both supply and retail sides)

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Catman Opportunities for Suppliers

Mindspace
Continue to build/support brands simplify assortment/brand
decisions for consumers.
Be the consumer experts.
Efficient Assortment
Reduce consumer choices provided the retailer supports the
move.
Efficient Promotions
Tight financial control on traditional trade promotions, whilst switching
emphasis to consumer activity.
Micro Marketing
As category expert, drive the testing of Store cluster micro
marketing.

Category Management is the filter through which we must communicate

whilst protecting our own interests and delivering our strategies.
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8. The Account Manager, Today and Tomorrow

This is a typical knowledge/ skill/ attitude profile for an Account Manager.

Knowledge Skills Attitudes

Roles Planner Many and varied, including:

KRAs/KPIs Market Research

Segmentation Analysis A continuous flow of new ideas
lifts us up the value chain
Competition Planning
Manager
Customers
Team Leadership Service excellence must be real
Account Profiles and promoted
Performance control
Processes
Investment
Information management
Management Salesman Every joint project changes
Planning & Control Presentation perceptions, opens new doors
and creates new information
Reporting Negotiation sources.
Communication Customer Wiring
Service Package Relationship Manager
Great strategies wont work
Deliverables Execution unless we drive them at the
Business Reviews sharp end.
Communication

It is traditional and sound.but is it adequate for todays environment?

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Contemporary KAM Competencies

Understands
6. Performance Performance Drivers
Manager "Less is More"
Measurement
Promotes
"self-management"
Aligns Team Strategies 1. Shares the Vision
Team Visioning
7. Committed People Prioritises Learning
Coaching Style of Creative Coach
Management Developer
2. Concise Inspiring Development Planner
Concise Presenter Communicator Facilitator
Persuasive Presenter
Effective Use of
Systems Assesses Motivation
Communicate 8. Motivational
Leader Builds Self-Reliance
Vision into Action Act
3. Sales Planner Demonstrates "Success is...."
Team Objective Setting
Lead "Housekeeper"
KRA Focus

Selector/ Retainer 4. Organiser Promotes Team

Territory Organiser 9. Teambuilder Responsibility
Meeting Facilitator
5. Flexible Sales Innovation Manager
Persuasive Selling
Skills Person
Win-Win Negotiator Leads by Example
10. Guardian of the Brand Builder
Culture Trust/ Integrity
Promotes Self-Reliance
and Continuous
Improvement

This contemporary view de-emphasises the traditional competencies of basic supply chain
management, selling and negotiating, whilst acknowledging that they are still important. It places
much more emphasis on business management and value adding.
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9. KAM Team Development Big Issues

1. Teambuilding
KAMs who are isolated, managing too many accounts
and doing it all themselves will take their talents elsewhere.
Support, including great processes and full team training is
critical.

2. Accelerated Learning
Accelerated learning takes place when the team creates the strategies, processes, plans and new
initiatives.

3. Minimal theory, maximum live applications

The most successful account management skills development is intensely customer focused
involving customers throughout the development process.

4. Focus on executional excellence

The best strategies can fail through poor execution. The skills of presentation, negotiation,
communication, point of sale reinforcement (retail) and project management remain essential.

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A Typical KAM Team Development Process

Development Objectives
As a result of this process, Key Account management teams will develop, own and
be able to implement best practices in customer development.

Desired Outcomes
Strategic clarity Executional excellence
Professional image Services rewarded
Preferred supplier Profitable accounts!
Concise processes

Phase 1: Best Practice Processes

Consultant Team Workshop 1 Process Projects (Examples)

Familiarisation Account classification
Fieldwork Business and Service Needs Research
Process Review Best Practices
in Customer Account Profitability Analysis
Customer Research Selected Account Plans
Development
Pilot
Service package/Standards
Plans review

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A Typical KAM Team Development Process (continued)

Phase 2: Key Account Plans

Team Workshop 2 Customer Commitment Team Reviews

Refine Plans Account specific reviews:
Account Joint Business - with teams
Strategies Development - with customers
and Plans Presentations
Identify implementation
Present and negotiate priorities
plans

Phase 3: Execution

Team Workshop 3 Implementation Projects Team Reviews

Monitor and report back on Account specific reviews:
high priority initiatives
- with teams
Executional - with customers
Excellence
Identify implementation
Priorities

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10. Examples of JSA Major Customer Development Projects

KAM Clients 1982 2007
Bayer (Philippines/ Australia)
Bristol Myers Squibb (Thailand)
Cerebos Greggs (NZ)
Cadbury Confectionery (Australia/NZ)
Nestle was our very first FMCG key account
CUB/ Fosters
management client in 1982.
Frito Lay Asia (Thailand, China, Singapore)
Gillette Asia (Hong Kong, Malaysia)
Guinness-UDV
Strong focus on emerging Asia markets with
clients such as Bristol Myers, Pepsi Cola
HJ Heinz
International and Frito Lay Asia.
Johnson & Johnson SPC
accelerating a change process that took 20
J Wattie Foods (NZ) Sterling Pharmaceuticals
years in Australia into 18 months
KR Darling Downs (Hong Kong)
Mars Confectionery Taylors Wines
Masterfoods Tegel Poultry (NZ)
Continuing interest in the New Zealand market
Nestle Uncle Bens
due to its higher potential for innovation and
speed of change.
Pepsi Cola International Uncle Tobys
Philip Morris Unilever
Philips Electronics Wella (NZ) Surprisingly, even apparently sophisticated
Pioneer Electronics clients in Australia have a strong need to get
Rover Mowers back to basics.
Sanitarium (NZ)
Schweppes

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