Modern Key Account Management Segmentation

Modern Key Account Management Relies on Proper Segmentation

                           

Customer relationships have moved far beyond the typical sales cycle, specifically within the B2B space. Instead of ushering clients into the traditional sales funnel, brands must now focus on bringing top-notch service to their customers at every stage of the journey. But for those companies looking to juggle growing demand and heightened expectations simultaneously, it’s essential to segment their customer bases in order to establish which accounts are most vital to their continued success and deserve “trusted advisor” services.

Beyond all else, companies must first acknowledge that it’s impossible to treat all clients equally. Not only would such an approach be taxing on sales and service associates, but it would also put undue strain on the brand’s finances. Segmentation, however, enables leaders to assess and categorize customer relationships so they may provide each client with the appropriate attention. No matter the size of your company, resources can become strained if associates are forced to devote equal amounts of time to clients that don’t ultimately yield the same level of customer lifetime value.

Segmentation offers companies an opportunity to add value through maximizing the use of their products / services. This added value (trusted advisor services) is reserved for those customers who meet the segmentation Tier I / Tier II criteria as shown below.

Below is a basic account segmentation example:

Tier I: Significant annual revenue and / or strategic value

Tier II: Potential significant annual growth and / or customer lifetime value

Tier III: Remaining customer accounts

When developing your company’s segmentation strategy, however, leaders must ask the core questions that’ll determine which accounts are essential for current / future growth:

  1. Which customers qualify for trusted advisor services now / future?

  2. What changes must the company make throughout the organization to achieve this desired level of segmentation?

  3. How will the company measure the value (ROI) of segmentation?

Forming deeper, more targeted relationships affords brands increased loyalty, sales, and profits, while customers enjoy an enhanced experience that adds value to their bottom line. Exceptional service must be the baseline for all, but leaders need to build upon this solid foundation to preserve and expand their relationships within key accounts. In recent years, Big Data has forced companies to sift through the “white noise” that threatens to cloud their understanding of those they serve. Segmentation, while not an exact science, allows leaders to organize customers into manageable groups that promise to add clarity to an increasingly perplexing, saturated market. Companies must ask themselves: Are you willing to earn “trusted advisor” role?

Once your company has developed its own solid segmentation strategy, it will be easier to determine which customers require key account protection program (KAPP). KAPP theory is based on “the process of building long- term mutually beneficial relationships with your most valuable accounts. Many of CRMI / Marketii clients of the NorthFace ScoreBoard Award (NFSB) for customer service excellence, have added (KAPP Relationship Survey) component to their existing CX strategy.

Leader must evaluate both revenue and strategic value in choosing key accounts. Leaders must also limit the number of assigned key accounts to start because overcommitting the company puts their reputation and the reputations of their customers at risk. By starting small, brands can ultimately position themselves as leaders within the given market as they strategically fine-tune their ability to help key accounts excel.

Key account managers are also an integral part of your company’s success. Though it might seem logical to promote your best salespeople to key account managers, leaders must recognize that this role requires special training and skill. These employees aren’t merely trying to sell or upsell to these clients. Instead, they’re responsible for expanding these strategic relationships. They will need to develop an intimate understanding of the client they are working with so that they may collaborate effectively and proactivity.

KAPP, after all, must become interwoven with the fabric of your brand. It’s not some lone offshoot? it’s an enterprisewide policy. Key account managers must be evaluated using metrics that prioritize the lifetime value of the customer, as these associates are tasked with establishing and maintaining rapport with clients that’ll prove most beneficial to the bottom line of both parties.

Ideally, those heading these key accounts will become so intimately evolved that clients will no longer see them as vendors, but instead as partners (trusted advisor) who have nothing but their interests at heart. At this point your brand has moved beyond selling, therefore, the buyer-vendor relationship has transitioned to the client-partner phase. If clients perceive you as their vendor after you’ve deemed them one of your key accounts, then it’s likely both the company and the account manager have failed to convey the client’s worth.

In general, vendors are seen as companies that aim to sell products and solutions even when they don’t satisfy the needs of the customer in question. They push their services despite the fact that their offerings fail to address the customer’s specific situation. They neglect to tailor their sales approach to accommodate those with which they seek to do business. Partners, however, are proactive. They foresee challenges and offer solutions before problems arise. They’re reliable and honest. They treat the client with dignity, respect, and overtime earn their “trusted advisor” role.

Trusted advisors, first and foremost, are in relationships for the long haul. They understand that the customer’s success begets their success. Trusted advisors know that, to prosper, they must communicate clearly and hold themselves accountable in their effort to lift the client up and never let them down. Ultimately, key account management depends upon services rendered after the sales team has worked its magic. Service has become an undeniable differentiator throughout today’s market, but when it comes to key account management, it’s not just ideal – it’s critical.

About the Authors

Bill Moore is Vice President of CXDNA Practice for Customer Relationship Management Institute LLC (CRMI) (https://www.crmirewards.com/about). He delivers (CXDNA) strategies best practices training / workshops, as well as CEMPRO employee soft skills certified training programs, that raise employee’s customer service awareness – competence – operational practices resulting in employee’s who continuously exceed customers’ expectations.

Duncan Heal, President/CEO for Market Intelligence International (Marketii.com), where he oversees the activities of the company’s marketing / sales, customer experience operations team and professional consulting group. Marketii is a global market research firm that specializes in the area of customer satisfaction with service quality surveys (25 native languages), reporting, feedback, analytics and consulting.

Contact Diane Rivera, Director of Membership Services email: drivera@crmirewards.com Tel: 978-710-3269 to learn how your organization can prevent competitors from winning your accounts.

Why Your Brand Needs to Embrace a Periodic Benchmark Process

Imagine your brand’s struggling in some capacity. Perhaps sales have plummeted in the last quarter, or employee turnover has skyrocketed over the past year. You’re not sure what you’re doing wrong, but you need to find the root of the problem as soon as possible to avoid catastrophic consequences. As a leader within your industry, you’re aware that one or more of your competitors consistently excel in this particular area, and you’d love to transform their secrets into your success. What should you do now?

Brands that are looking for the “quick fix” might opt for competitive analysis or research, which IMPACT defines as the “field of strategic research that specializes in the collection and review of information about rival firms.” However, despite the notion that it’s crucial to establish what type of financial threat the competition might pose in both the short and long term, analysis and research often comes across as shady and deceptive to others throughout your given industry, putting your company’s reputation on the line. Instead of copying or mirroring brands that are making all the right moves, leaders should use benchmarking to improve obvious weaknesses and identify latent strengths in an effort to adapt and grow according to market demands.

According to the Business Dictionary, “benchmarking” can be defined as the “measurement of the quality of an organization’s policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers.” Essentially, benchmarking empowers the executives at leading companies to develop a barometer that allows them to gauge how their organization compares with others across the industry. Benchmarking serves as a valuable “reality check” that enables leaders to grasp how their organization stacks up against their direct competitors and adjacent industries in general.

Similarly, its primary objectives are:

  1. To determine what and where improvements are called for throughout the organization.
  2. To analyze how other organizations achieve their high performance levels.
  3. To use this information to improve performance and procedure.

Benchmarking reveals how your company measures up when compared to the industry standard and highlights ways in which your brand can grow over time. Not only can this process uncover issues that have gone overlooked, but it can also provide proof that improvements need to be made immediately, as C-suite executives often fail to allocate the necessary funds and resources until it’s too late.

As iSixSigma indicates, there are three basic classifications of benchmarking: internal, competitive, and strategic.

Internal — Used when a company already has established and proven best practices and they simply need to share them.

Competitive — Used when a company wants to evaluate its position within its industry or needs to identify industry leadership performance targets.

Strategic — Used when identifying and analyzing world-class performance in times when a company needs to go outside of its own industry.

“For innovation professionals who do want to take action, benchmarking best practices can provide ammunition to break internal log jams and convince the C-suite that risk can potentially be mitigated when undertaking new initiatives,” Scott Lenet, co-founder and president at Touchdown Ventures, writes for Forbes. “For those with existing programs who are struggling to communicate value, benchmarking is an opportunity to articulate strengths and address areas for improvement. No one likes to be audited or visit the doctor for an annual physical, but those practices exist for a reason, too.”

He adds, “Innovation programs aligning with industry standards may be more likely to build a positive reputation in the ecosystem, provide ongoing value to parent corporations, and avoid shut down.”

“Benchmarking by specific industry allows you to stack yourself up against other companies and improve your organization,” Berni Hollinger writes for CH Consulting Group. “Who has the best sales per salesperson and how do you stack against them? Which company has the most efficient customer service department and how did it happen?

“In a simplistic sense, it allows you to compare your company against others – not financially, but in best practices,” she adds. “Don’t get me wrong, better processes results in higher profit to the bottom line. How can it not? Each time you improve upon a process or procedure, it saves time, equipment or supplies. Less time spent on the operational end means more time available to increase revenue.”

Periodic benchmarking allows companies to continuously audit their standing within their industry and make changes as necessary in order to preserve their competitive advantage. Because the customer experience remains at the heart of each decision an organization makes, it’s in everyone’s best interest to be up-to-date on industry standards and expectations at all times. Companies that refrain from the benchmarking process until issues arise will find themselves at a disadvantage, as it’s best to be aware of the current and emerging trends throughout the industry.

In the end, your company will reap an array of benefits, including improved quality and performance because, as an organization that’s constantly in-tune with the current industry standard, your brand will continuously strive to bring its products and services up to par with—and inevitably surpass—the norm. Doing so will also remove the tendency to become complacent, as you and your employees will have the insight and incentive necessary to push performance beyond the industry standard to remain competitive in an increasingly saturated market.

Consistent benchmarking will reveal weak spots early, allowing your organization to initiate proactive measures that reinforce your leadership and dedication to the overall customer experience.

 

In Business, Data Analytics Will Always Be Critical to Gain the Competitive Advantage

It’s an adage as old as capitalism: to know the customer, one must become the customer. It’s imperative that companies keep up with customer sentiment in order to remain one step ahead of any complaints or concerns that might arise. Business analytics, however, enable organizations to collect customer feedback in an effort to provide structure amongst the unstructured data that pours in continuously. But when there’s so much chatter to weed through and decipher, it’s not always easy to decide what your brand’s next steps should be.

That’s why customer data plays an important role.

Business Analytics (BA), of course, refers to the data-driven practices, skills, tools, and techniques for continually analyzing business performance and exploring new ways of gaining a competitive advantage. BA provides actionable insight relative to decision makers, recommenders, and influencers according to loyalty and satisfaction scores. BA also makes it possible to combine satisfaction and operational data to gain further insight into purchase behavior by nature of the job or role within a customer organization.

Yet, despite countless years of data talk, many organizations have yet to master the analytics walk.

In an article that preceded his groundbreaking 2007 book, “Competing on Analytics: The New Science of Winning,” Tom Davenport explored the importance of analytics when describing the future of business. More than a decade has passed since its publication, but Davenport’s wise words still ring true.

“Organizations are competing on analytics not just because they can—business today is awash in data and data crunchers—but also because they should,” the Babson College professor of Information Technology and Management, and independent senior advisor for Deloitte Analytics, wrote for Harvard Business Review. “At a time when firms in many industries offer similar products and use comparable technologies, business processes are among the last remaining points of differentiation. Aand analytics competitors wring every last drop of value from those processes. So, like other companies, they know what products their customers want, but they also know what prices those customers will pay, how many items each will buy in a lifetime, and what triggers will make people buy more.”

Modern companies now recognize, without a doubt, that business analytics can differentiate them from the competition, but many are still behind when it comes to bringing the data to action. They’ve instituted the technology necessary to collect customer information, but they have yet to establish processes for parsing the data and using it to fine-tune operations. Instead of sitting on this data and allowing it to go to waste, they must develop a team that can transform said information into actionable insight.

Davenport also noted that the companywide embrace of analytics requires changes in culture, processes, behaviors, and skills for many employees. Thus, as with any major transition, this requires leadership from executives at the top who “have a passion for the quantitative approach.” Ideally, this advocate will be the CEO, as top-down buy-in provides the entire organization with a solid foundation on which to build its evolving analytics initiatives.

“Culture is a soft concept; analytics is a hard discipline,” Davenport explained, noting how the two aspects might clash upon introduction. “Nonetheless, analytics competitors must instill a companywide respect for measuring, testing, and evaluating quantitative evidence. Employees are urged to base decisions on hard facts. And they know that their performance is gauged the same way. Human resource organizations within analytics competitors are rigorous about applying metrics to compensation and rewards.”

Teams that effectively learn how to bring the mounting data to action will ultimately be able to predict how customers might react to impending updates or upcoming campaigns. Such insight will allow these employees to curb any issues before they arise, resulting in peak performance and peak results. Predictive analytics also serves as an important differentiator in today’s competitive landscape, as employees can detect what consumers want from their customer experience and make these dreams into reality before other companies can target weaknesses within the industry and lure the consumer to their rival brand.

However, as Davenport emphasized, not all decisions should be grounded in analytics. When it comes to building an effective team, it’s often best to let your conscience be your guide.

“Personnel matters, in particular, are often well and appropriately informed by instinct and anecdote,” he added. “More organizations are subjecting recruiting and hiring decisions to statistical analysis. But research shows that human beings can make quick, surprisingly accurate assessments of personality and character based on simple observations. For analytics-minded leaders, then, the challenge boils down to knowing when to run with the numbers and when to run with their guts.”

Successful leaders understand that success requires both instinct and intuition. While it’s essential for all employees to have the technical skills necessary to execute the company’s mission, it’s also important to create a team of people who can make the connection between facts and feelings. Customer relationship soft skills training for your frontline is a key ingredient to enable this balance. These are the people who will advance your business analytics strategy to the next level and develop an indomitable customer experience that excels far beyond anything the competition has to offer.