If you are a Key Account Manager trying to build consultative partnerships with your customers, you are surely grappling with this question:
“How do I build a strong trust relationship with my Key Account, so that they are comfortable giving me the information I need to plan the development of our business relationship and to create Killer Profit Improvement Proposals?”
Whether you work in FMCG, industrial, channel management, B2B, products, services (whatever!), there are many benefits of building close consultative relationships. Here are just a few:
This type of partnership leads to continuous improvement in the services and/or investment the Supplier is willing to provide and in the information, time, trust and/or investment the Account is willing to share.
But the process is both labour intensive and information intensive, particularly in it's early stages, and cannot usually be applied in full to all of our Accounts or Prospects.
In some industries, the revolution in Information Technology has been a catalyst for the emergence of this new breed of supplier-customer relationship, as first EDI, and then web-enabled systems, have improved sales information and efficiency of consumer response.
Some retailers, for example, have been working more closely with Suppliers, sharing information on:
But many of us know we will have to work with imperfect information; we are going to have to gather most of that data from discussions with our customer, rather than poring over dashboards and metrics from AC Nielsen!
This post describes an innovative use of SWOT Analysis at Key Account Level to facilitate this information exchange, build trust and provide a platform for growth. The methodology has been tried a tested with many clients in industries as diverse as petrochemicals, packaged goods, energy retailing, scientific supplies, educational services, electrical appliances, and many more. It works!
It is at the heart of our StrAcPlan© process for Strategic Account Planning, which will be covered soon in other blog posts and supported with downloadable tools and checklists.
Swot Analysis is a Strategic Tool
Originally credited to Albert Humphrey at Stanford, for many years SWOT Analysis has been a tried and tested tool of strategists wishing to plot their course through the competitive minefield. But it can also be applied really usefully at individual customers.
Whether you are in Marketing, Sales Management or Key Accounts, your role is to satisfy consumer requirements profitably, and this can only be achieved if a correct balance is struck between opportunities, company goals, and available resources. SWOT analysis attempts to bridge this gap, so it is potentially one of the most powerful tools at your disposal.
However, to be strategically useful, a SWOT Analysis should identify the critical factors that can be leveraged for a sustainable competitive advantage, and those that must be countered. So if all of your competitors share a similar strength, then it probably has little relative value as a differentiating factor.
If you are unsure of how to use the “normal” SWOT Analysis approach, click here to read our White Paper on SWOT Analysis.
The Two-Way SWOT Approach
As shown in the flow diagram near the top of this post, the Two-Way SWOT Analysis is at the heart of a partnership approach to Account Planning. The intent is to combine Supplier and Account business objectives and situation analyses. In the example shown in the above flow chart, the customer is a retailer (or reseller of some sort) in a B2C context. The inputs from “Consumer Needs”, “Customer SWOT” and “Supplier SWOT” are combined to identify joint opportunities to exploit and threats to counter.
For example, assume we are a leading Supplier of small domestic appliances, with a strong brand image and established expertise in merchandise and category management. We might assume that our leading position will automatically win us new ranging recommendations or shelf allocations.
However, we must remember that only what the market (in this case the Account) considers to be relevant strength or weakness should be included, which challenges the Account Manager to assess the “normal” aspects of our SWOT, in relation to the particular Account in question.
The Opportunities and Threats portion of the analysis is externally focused. We need to look at both our business and the Account's business, to isolate present and future threats to each organisation's strategy, and to isolate opportunities to add value or achieve incremental growth. Once again, there needs to be an open dialogue to agree on the significance and attractiveness of opportunities (and the severity/likelihood of threats).
The summary SWOT Analyses are placed alongside each other to identify areas of common interest, as depicted in the graphic below.
“How do I build a strong trust relationship with my Key Account, so that they are comfortable giving me the information I need to plan the development of our business relationship and to create Killer Profit Improvement Proposals?”
Whether you work in FMCG, industrial, channel management, B2B, products, services (whatever!), there are many benefits of building close consultative relationships. Here are just a few:
- clear direction provided for customer relationships
- improved professionalism, skills and performance
- competitive advantage achieved for both parties
- preferred supplier status gained
- increased market share and profitability gains for both parties
This type of partnership leads to continuous improvement in the services and/or investment the Supplier is willing to provide and in the information, time, trust and/or investment the Account is willing to share.
But the process is both labour intensive and information intensive, particularly in it's early stages, and cannot usually be applied in full to all of our Accounts or Prospects.
In some industries, the revolution in Information Technology has been a catalyst for the emergence of this new breed of supplier-customer relationship, as first EDI, and then web-enabled systems, have improved sales information and efficiency of consumer response.
Some retailers, for example, have been working more closely with Suppliers, sharing information on:
- the market and consumers/shoppers
- shopper marketing and category management
- their marketing mix and plans
- their financial performance and KPIs
- etc.
But many of us know we will have to work with imperfect information; we are going to have to gather most of that data from discussions with our customer, rather than poring over dashboards and metrics from AC Nielsen!
This post describes an innovative use of SWOT Analysis at Key Account Level to facilitate this information exchange, build trust and provide a platform for growth. The methodology has been tried a tested with many clients in industries as diverse as petrochemicals, packaged goods, energy retailing, scientific supplies, educational services, electrical appliances, and many more. It works!
It is at the heart of our StrAcPlan© process for Strategic Account Planning, which will be covered soon in other blog posts and supported with downloadable tools and checklists.
Swot Analysis is a Strategic Tool
Originally credited to Albert Humphrey at Stanford, for many years SWOT Analysis has been a tried and tested tool of strategists wishing to plot their course through the competitive minefield. But it can also be applied really usefully at individual customers.
Whether you are in Marketing, Sales Management or Key Accounts, your role is to satisfy consumer requirements profitably, and this can only be achieved if a correct balance is struck between opportunities, company goals, and available resources. SWOT analysis attempts to bridge this gap, so it is potentially one of the most powerful tools at your disposal.
However, to be strategically useful, a SWOT Analysis should identify the critical factors that can be leveraged for a sustainable competitive advantage, and those that must be countered. So if all of your competitors share a similar strength, then it probably has little relative value as a differentiating factor.
If you are unsure of how to use the “normal” SWOT Analysis approach, click here to read our White Paper on SWOT Analysis.
The Two-Way SWOT Approach
As shown in the flow diagram near the top of this post, the Two-Way SWOT Analysis is at the heart of a partnership approach to Account Planning. The intent is to combine Supplier and Account business objectives and situation analyses. In the example shown in the above flow chart, the customer is a retailer (or reseller of some sort) in a B2C context. The inputs from “Consumer Needs”, “Customer SWOT” and “Supplier SWOT” are combined to identify joint opportunities to exploit and threats to counter.
For example, assume we are a leading Supplier of small domestic appliances, with a strong brand image and established expertise in merchandise and category management. We might assume that our leading position will automatically win us new ranging recommendations or shelf allocations.
However, we must remember that only what the market (in this case the Account) considers to be relevant strength or weakness should be included, which challenges the Account Manager to assess the “normal” aspects of our SWOT, in relation to the particular Account in question.
The Opportunities and Threats portion of the analysis is externally focused. We need to look at both our business and the Account's business, to isolate present and future threats to each organisation's strategy, and to isolate opportunities to add value or achieve incremental growth. Once again, there needs to be an open dialogue to agree on the significance and attractiveness of opportunities (and the severity/likelihood of threats).
The summary SWOT Analyses are placed alongside each other to identify areas of common interest, as depicted in the graphic below.
So, going back to our earlier case study, a Retailer who sees an opportunity in small cooking appliances would be likely to turn to us because of our acknowledged strengths, (S>>O). Our Business Development team could be used to help an Independent Retailer combat the presence of a new competitor, (S>>T). In store training would allows us both to capitalise on market growth, (O>>O).
What Process is Usually Used?
Some Account Managers start within their their own business before approaching the Account, which is of course useful provided you remember that it is best done by brainstorming with a group of colleagues. Personal introspection is rarely sufficiently objective!
In an ideal relationship, the Account Manager would table a review meeting (or a “BRAD” meeting) with the customer to obtain customer input to the process. This is usually a good investment in the relationship, even if at times it feels “Character Building” :)
This part of the process is essentially a brainstorming of all possible ways to add value to the relationship, including both logical and "creative aspects". Much of the information comes from the (Two-Way) SWOT but we should consider other sources too, such as any suggestions from previous business review meetings and the ongoing relationship. There may be gaps in our Account Profile that need to be addressed, or a one-off issue that presents an opportunity.
Some companies empower their Account Managers to look for possibilities outside the normal parameters of the relationship, such as:
The subsequent steps in the Account Planning Process can be summarised as:
These will be covered in future blog posts, downloads and tools.
What Process is Usually Used?
Some Account Managers start within their their own business before approaching the Account, which is of course useful provided you remember that it is best done by brainstorming with a group of colleagues. Personal introspection is rarely sufficiently objective!
In an ideal relationship, the Account Manager would table a review meeting (or a “BRAD” meeting) with the customer to obtain customer input to the process. This is usually a good investment in the relationship, even if at times it feels “Character Building” :)
This part of the process is essentially a brainstorming of all possible ways to add value to the relationship, including both logical and "creative aspects". Much of the information comes from the (Two-Way) SWOT but we should consider other sources too, such as any suggestions from previous business review meetings and the ongoing relationship. There may be gaps in our Account Profile that need to be addressed, or a one-off issue that presents an opportunity.
Some companies empower their Account Managers to look for possibilities outside the normal parameters of the relationship, such as:
- systems
- management and information
- operations
- finance
- sales and marketing
- industrial relations issues
- environmental control
- training activities
- legal advice
- safety issues
The subsequent steps in the Account Planning Process can be summarised as:
- opportunity ranking and selection
- risk assessment
- strategic alignment
- resource availability
- overall return
- time frame
- action plans
These will be covered in future blog posts, downloads and tools.
