Customer royale!: Key to good account management

MARKETING IS an achievement- oriented profession and promises quick upward mobility as well as enhancing personal and professional growth. The journey from the producer to the consumer is the one often traversed by the marketer and involves a great deal of planning, test marketing and sales forecasting before the product is actually made available to the consumer.

The last few decades of the millennium have seen more changes in marketing than at any other time. Competition among numerous brands for the finite sales in the market have led to more and more features being added to the product to make a difference to the sales. However these 'augmented products' soon became `expectations' of the customers.

TQM (Total Quality Management) has become all-pervasive, with every department in the organisation looking to incorporate standards to benchmark and be benchmarked for performance. BPR (Business Process Reengineering) began to be implemented in order to improve the market- focus, and to stay competitive with tight cost control and optimum resource allocation.

Through all this, with the focus on enhanced product functions, the cost of production went up and margins dwindled. Due to the growth of parity products, the only way to stand out was to serve the customers better. The corporate had to become "customerised" or customer-focused. The shift of the marketer now was on TCM (Total Customer Management).

Neil Borden's four Ps (product, price, place & promotion) that formed the basis of traditional marketing strategy were no longer sound. The four Ps had been propounded for industrial products, where a segment of many consumers was treated with one formula of mass production, mass distribution, and mass communication at more or less one price. The seller could get away with `body- count marketing', i.e. making volumes per sale and many such sales calls per day.

With the shift to a service product, the emphasis changed to "customisation" (making the product to the specifications of the customer) and "one-to-one marketing"(dealing with one customer or a small group of similar customers at a time). Personalisation became important, and the need came for relationships with the customer in order to assure the long- term survival of the marketer.

CRM or Customer Relationship Management caught on in the 1990s. The customer had to treat you as a friend to conclude the transaction and renew the bond. The focus was on delivering better and better value to the customer, through a better understanding of his needs. Selling became more of listening than talking, and feedback was all-important. Contact management software allowed the documentation of every interaction, and computing technology supported the strides into data warehousing and mining for customer information.

The existing customers have to be made clients and then advocates for the products. This could only be done by delighting them beyond their expectations, not just satisfying them.

In recent years, however, this has become unmanageable. With the ever-increasing demands of customers, and the premium on time and manpower, organisations have found it unviable to put in so much effort in every customer relationship. Besides, the Pareto 80-20 rule had proved itself here as well - 80% of a company's profit comes from only 20% of their customers; just as 80% of the margins come from only 20% of the products in its portfolio. The only way out was through KAM or Key Account Management. KAM requires a focus on the 20% customers, the important key accounts who add 80% to the bottom line, and satisfy them to a 100%, bonding with them so that they are retained as loyal customers with captive referral power.

This is easier said than done, however. The human implications are tremendous! It is heartbreaking for those salespeople who have nurtured relationships with the 80% who are not to be fostered any longer. How does one let go? More importantly, how do we choose these 20%? Each company evolves their own criteria for this selection. Whatever the measure, find these key accounts and focus on them. Eighty percent of the sales team's time must dwell on the information analysed about the client, in order to meld the corporate's goals with that of the marketer.

The marketer should now be seen as a partner, not just a supplier. An alliance that wants the best for the client corporate, that understands the client's needs and always looks out for the best interests of the client. Not the marketer's! The client's goals come first. In the pursuit of this, the perception of the supplier-marketer as a partner will force the client corporate into a win-win situation. He has to help the marketer grow to keep growing himself.

One corporate that has successfully implemented KAM is ITW Signode. The company has found that this programme has helped to motivate and retain its sales team.

Key sales teams, selected from the best and most experienced, are placed in position to interact with these key accounts. Incentives to the sales team are based on the deliverables to the key accounts, the rise of the CSI (Customer Satisfaction Index), and the retention of these accounts.

Other prospects are regularly fostered by a second sales team, the field engineering team. Their performance is evaluated on the basis of the conversions to key account status of potential customers, and the time span this is achieved in. A great KAM system worth emulating! Concentrate on the satisfaction indices of the key accounts. Enhance the Lifetime Value (LTV) or the CLV (Customer Lifetime Value) that these Most Valuable Customers (MVCs) can bring to your growth potential! This is the overriding mantra for marketing success today!

LEKHA SISHTA

lekha.hyd@careercommunity.co.in