-Advice to Successful Key Account Management

Here’s a disturbing fact. While engineers study engineering, doctors study medicine, and accountants study accounting, none of your sales people have studied sales. That’s right, none. They might have gone to university and studied ‘business’ or ‘management’, but that was as close as they got to sales. And we all know that ‘business’ and ‘management’ have little to do with sales – it’s the interpersonal touch, that they don’t teach at school, which defines the ordinary from the talented.

This weakness is even further amplified in China where the ‘best practice’ sales approach is relatively fresh. Deng Xiaoping might have ‘opened the door’ to the West in 1978, but it took another decade before famous sales authors William Ury, Herb Cohen, and Dale Carnegie became available in the business section of Chinese bookshops. That means that your sales people are ill-prepared, regardless of how confident they say they are.

This is especially true for Key Account Management (KAM) in China. Once the globalisation door was opened, China experienced a vast increase in the level of competitiveness, particularly in the 1990s, as multinational companies (MNCs) first targeted lethargic State-owned enterprises (SOEs) and then turned upon one another. Consequently, the role of the salesperson shifted from simply a coldcaller and relationship builder, to one focusing on strategic accounts with long term relationships, not just short term contracts.

What buying model do your KAM salespeople follow?

Eight years ago I devised an equation to define the buying psychology in China, allowing my sales team to see sales as both an art and science. This equation is:

Needs + Features = Benefit

Goodwill + Reputation = Trust

Benefits + Trust = Agreement*

With reference to the above equation, a Key Account, by definition implies that you know what the client ‘wants’, but that doesn’t mean you necessarily know what they ‘need’. A salesperson, say at a hotel, knows that their list of 50 clients in their Client Relationship Management (CRM) system are aware of the hotel’s location and star rating. When a client calls to enquire into room rates, it is also clear what that client ‘wants’ – they want a room, or rooms. But what do they ‘need’? Are they looking to be close to their own client’s location? Is the booking for a foreign manager who needs to do shopping for his six year old boy’s upcoming birthday? Or did they completely forget about booking the hotel until today, when their visiting manager called from the airport and asked for directions to the hotel? Geographic convenience, central location, or speed are three clear ‘needs’ that a sales person should be able to identify in a split second from the three scenarios, and more importantly, the sales person should be able to take advantage of this identification.

Matching the hotel’s ‘features’ to the clients ‘needs’ creates a benefit. In sales, we sometimes call this ‘benefit’ building or adding value. But that still only means that the client ‘might’ buy. We still have one other half of the buying model to satisfy, and this is where it gets difficult as your sales people need to build ‘goodwill’ and ‘reputation’ if they are to excel in KAM.

“We like to buy from people we like, and hate to buy from people we hate”. That’s a quick and simple definition of ‘goodwill’ with respect to sales. KAM salespeople are not conducting cold calls, so we can assume that there is at least some ‘goodwill’ in the salespersonclient relationship. So how does one maintain, and build upon this foundation?

The first step is to ensure that your entire organization is a conduit to collect information from Key Accounts. This is called TALK, and I wrote about this technique, which stands for Tell, Ask, Listen, and Know, in the last issue of Network HR. Essentially, an organization that collaborates organically will be more sensitive to the changing ‘needs’ of all of our Key Accounts.

The second step is to get your staff off e-mail, and on the phone, particularly when there’s a foreseeable problem. Sending a cold standard e-mail will only result in reducing ‘goodwill’, but a phone call, or better, a face to face meeting, allows for discussion and, with luck, an opportunity to cross- or up-sell.

Step three is to have a set of standard operating procedures for when things go wrong. Whether it is a delayed delivery, a missing component, or a forgotten order, if your clients know that you have a procedure to deal with problems they will be confident that you can also fix the problem.

Step four is to add value. Are your sales people aware of trends in your Key Accounts’ industry? Do they skim the newspapers looking for news snippets relevant to your Key Accounts? Do they attend industry networking groups (see Linked in with LinkedIn, p.36). The answer to all these questions should be a resounding “Yes!” and this means that your KAM salespeople are at worst maintaining ‘goodwill’. Ah, but this is one half of the equation. The other is ‘reputation’.

How is your company seen in the eyes of your clients? Wait, before you answer that, I’ll emphasise the words ‘eyes of your clients’ – not your eyes. This was a major mistake made by eBay, who entered the Chinese market, only to quickly leave, when they realized that the Chinese consumer were unfamiliar with the American giant, and preferred local startup, Taobao. If, like eBay, you think your ‘reputation’ needs improving, then you’ll need to build your KIIs and KOLs.

A KII, or Key Internal Influencer, works for your clients. They are not the decision maker, however, their opinion counts to those who do decide. During Bill Clinton’s presidency, Hillary Clinton was his KII. Now their roles have been reversed with her role as Secretary of State. But a KII doesn’t have to be as high up as Hillary. In the case of FedEx and DHL, the opinion of the receptionist could influence the yearly courier contract. General Managers will delegate and this is where the KII is invaluable.

The KOL is similar, in that they influence decisions, however, they may also be outside a decision maker’s organization. The “9 out of 10 dentists recommend…” television advertisements are examples of using respected figures to influence the buying behaviour of others. In the pharmaceutical industry, medical representatives from big drug companies build strong relationships with respected doctors whose prescribing habits affect the junior doctors around them. And before you say that this kind of advertising has no affect on you, did you buy a pair of Reeboks because you like Yao Ming? KOL advertising in China has run amuck.

The level of ‘goodwill’ and ‘reputation’ that a sales person has with a Key Account influences the overall ‘trust’ level. Ultimately, the more ‘trust’ a client has, the more likely that they are going to buy from your company. But wait, there’s more!

That ‘more’ is price. Yes, even a great ‘reputation’ and regular dinners in expensive restaurants to build ‘goodwill’ isn’t going to convince your client to pay twice the market price – a 10% premium perhaps, but certainly not double. But imagine if your entire sales team were regularly signing contracts with a 10% premium. This is possible because both ‘goodwill’ and ‘reputation’ increase perceived value of a product or service – a fact often forgotten in China, where the act of providing a discount from the onset of negotiations is habitual.

The process of KAM, combined with a comprehensive client relationship management (CRM) system, and not simply an Excel spreadsheet, added to regular reviews from senior sales staff, will ensure increased sales from the top 20 percent of clients who represent 80 percent of value to your organisation, and more importantly, secure your end of year national team building in Sanya!