5. Relationships and interaction

5.D.1 Customer relationships

Rationale

The primary role of the key account manager is to develop and manage for profit the relationship with his/her strategic customer and to orchestrate the process of interaction between the two companies.

 

Competency requirement

Customer attractiveness

  • Understands the link between customer attractiveness and the achievement of corporate strategy
  • Recognises and accepts that customer attractiveness is dependent upon their potential for superior returns on investment rather than current turnover.
  • Understands and accepts the quantitative and qualitative criteria used to identify strategic customers by their potential for profit.
  • Rates customers objectively and accurately against criteria when requested.
  • Categorises own customer portfolio similarly.

Relational states

  • Is aware that different states of relationships with strategic customers exist, with different characteristics, climate and potential.
  • Makes informed choices about the nature/state of the relationship that should be developed with each key customer
  • Develops relationships to the agreed level and does not invest time or money to develop them beyond the appropriate stage.
  • Recognises opportunities and action appropriate to the relational state and works with them.

Relationship management

  • Prioritises key customers over others.
  • Maintains relationships at all levels in the customer’s organisation, particularly senior managers.
  • Seeks, develops and maintains relationships across a range of the customer’s functions.
  • Feeds key contacts with appropriate and timely information and support.
  • Identifies contacts open to competitors and is particularly supportive of them.
  • Takes care to protect confidential communications.
  • Demonstrates trustworthiness to the customer and actively maintains it, personally and organisationally.
  • Sets up a system of explicit relationship governance with the customer that specifies participants in the relationship, meetings, access to information, decision-making powers etc.

Relationship development

  • Adopts a purposeful approach to building and maintaining relationships and has a plan of action for it.
  • Recognises valid relationship constraints and works with them: e.g. both parties’ perceptions of the strategic importance of the other.
  • Identifies gaps/missing/poor relationships in the customer organisation and pro- actively develops them.
  • Appreciates the personal professional issues and needs of contacts (e.g. reputation, innovation, management capability) and develops relationships by responding to them.

 

Examples of relevant theory
  • Relational states with key customers

 

Evidence

Document describing how you have used your understanding of relational states to successfully manage and develop key customer relationship(s). You could also submit, as supporting evidence for example, an annotated customer organogram, relationship development plan, analysis of relationship status and potential.

 

Some sources

Papers

Wilson KJ and Millman AF ‘The Global Account Manager as Political Entrepreneur’ in Sheth, Parvatyar and Shainesh (Eds) (2000) ‘Customer Relationship Management: Emerging Concepts and Applications’ Tata McGraw-Hill

Wilson KJ (2014) ‘Developing strategic key account management relationships in business to business markets’ in Woodburn D and Wilson KJ (Eds) (2014) ‘The Handbook of Strategic Account Management’ Wiley pp495-515

Books

Gibbs and Humphries (2009). 'Strategic Alliances and Marketing Partnerships: Gaining Competitive Advantage Through Collaboration and Partnering', London: Kogan Page.

Woodburn and McDonald, ‘Key Account Management: the definitive guide’, 2011 (3rd Ed.), Wiley, Chichester, UK.

 

5.D.2 Internal relationships

Rationale

Key account managers cannot deliver value to customers alone, they are dependent upon the alignment of their whole company around delivering value to the customer. They need to be able to mobilise the supplier’s resources without direct line authority, through working with multi-disciplinary key account teams and identifying centres of influence and potential allies.

 

Competency requirement

Internal allies

  • Respects colleagues and understands the role of internal relationships in achieving goals.
  • Takes time to build internal relationships.
  • Identifies key allies across the organisation and proactively builds relationships with them.
  • Builds relationships with several senior managers, at least.
  • Identifies the interests of potential allies and adapts approach accordingly.
  • Is aware of geographical and cross-functional boundaries, why they exist and how they operate.
  • Understands how to overcome internal boundaries.

Cross-functional working

  • Recognises what the KAM function can and cannot itself supply to customers.
  • Recognises the role of other departments in delivering benefit to key customers
  • Understands the needs, concerns, culture and capabilities of internal functions and responds appropriately.
  • Introduces customer-involved members of other departments to their counterparts in the customer.
  • Keeps customer-involved people up-to-date on customer developments, objectives, strategy and tactics.
  • Encourages customer-involved members of other departments to work directly with the customer.
  • Clarifies his/her requirement for feedback and decision making in the interactions with the customer of customer-involved people.

Effective collaboration

  • Understands the nature and needs of collaboration.
  • Appreciates the positioning of collaboration in conflict resolution and when it is productive, and when other approaches are more appropriate.
  • Identifies his/her personal preferred conflict resolution style and, if that is not collaboration, adapts style to collaborate when appropriate.
  • Proactively pursues initiatives with mutual benefit.
  • Recognises that initiatives with significantly unbalanced benefits are unlikely areas for collaboration.
  • Makes plans to collaborate, particularly focusing on the people involved and their issues.
  • Allows enough time to make collaboration work.

 

Examples of relevant theory
  • Conflict resolution
  • Organisational behaviour

 

Evidence

Document describing internal relationships and how they fit together, how they have been forged and the issues encountered in developing them, plus how cross-functional activity is working. You could also submit, as supporting evidence for example, an annotated customer organogram, internal relationship development plan, analysis of relationship status and potential.

 

Some sources

Books

Genefke and McDonald (Eds) ‘Effective Collaboration: Managing the Obstacles to Success’ 2001