4.2.2 Individual KA analysis

Once the 15 key accounts have been selected a detailed analysis of each key account must be undertaken. This preplanning analysis for each key account is necessary to understand how they run their business and/or processes. Furthermore, we need to get knowledge about what their challenges and pain points are. This knowledge is the prerequisite to be able to help them to increase their productivity as well as profitability and help them to lower their TCO.

In the KAM concept of MTPRO in chapter 5 to 7 many analyses will be conducted. Some of these analyses are designed on the basis of tried and tested theoretical as well as practical examples of KAM-related literature. The theoretical foundation of two of theses analyses are now highlighted. They are called value chain analysis and buying centre analysis.

(1) Value chain analysis

The value-chain is an invaluable tool in understanding how a major account actually functions. It is assumed that the readers are familiar with this concept. Figure 12 illustrates the primary activities of bought-in goods entering the organisation, passing through operations and then moving out to their markets by means of marketing and sales and services. (McDonald/ Woodburn). The support activities comprise human resource management, procurement and so on. With regard to a system fabricator/system integrator key account, MTPRO could make valuable contributions along the whole chain of primary activities. Since the majority of the selected key accounts will be end-users, in particular CPI key accounts, the value chain is adapted to the activities for which MTPRO can deliver added-value. This adaption is shown in chapter 5.2.2. figure 16.

Value chain analysis (Source: McDonald/Woodburn, Figure 7.10)" class="wp-image-9087 size-full" height="286" src="https://sgbs.ch/wp-content/uploads/Figure-12-Value-chain-analysis.png" width="461"> Figure 12: Value chain analysis (Source: McDonald/Woodburn, Figure 7.10)

(2) Buying Centre Analysis

Buying influences and their degree of influence

As outlined under 2.2.2 there is a growing complexity of customer’s buying centre with more people and departments involved in purchasing decisions. That means several people have to give their approval or input before a supplier’s sales can go through. It is key to identify them accurately and understand their role each of them plays in connection with our sales proposal. Miller Heiman (The New Strategic Selling) states there are four critical buying roles present in every complex sale. These buying roles are called buying influences. There may be four, or fourteen, or forty people in the buying centre who can influence a given sale. In addition, in some sales scenarios, certain players may take on more than one of the four key buyer roles. (Miller Heiman, The New Strategic Selling, page 56).

Table 10: Roles and attributes of buying influences (Source: On the basis of Foundation Series, Strategic Selling, page 24 – 27)

Some of the buying influence above may exert a major influence on the outcome of our sales proposal. Others may exert less of a direct influence on the outcome than their roles (economic buyer) might lead you to believe. (Miller Heiman, The New Strategic Selling, page 56). The degree of influence of all buyers needs to be analysed carefully. Miller Heiman defines three degrees of influences, namely High, Medium and Low.

Level of Receptivity: Buying Influence Response Modes

Every sales proposal means a change for the customer. The buying influences view change in different ways. People are only ready for a change when they perceive a discrepancy between reality and their desired results. That means a supplier has to gauge the perception of a need for change with the individual buying influences. Table 11 presents the four possible response modes or perceptions of urgency. (Miller Heiman, The New Strategic Selling, page 101 – 124).

Table 11: Buying Influences Response Modes (Source: On the basis of Foundation Series, Strategic Selling, page 39 – 42)

After understanding each buying influence’s mode the supplier needs to develop a different approach for each response mode. These approaches are determined according to the win-results, explained in detail further below this page. The resulting actions are part of the individual key account plan, see chapter 8.

Before moving on the win-results the supplier needs to assess where it stands with each of the buyers by asking the question: How does each person feel right now with regard to my current sales proposal? Miller Heiman rates their buyers on a scale of -5 to +5 (Miller Heiman, The New Strategic Selling, page 119 – 122). In chapter 5.2.4, figure 17, the rating descriptions can be seen in detail.

Win-Results

Miller Heiman states that delivering results, e.g. productivity increase, to a buying influence alone is not enough. The basic goal is to show each of the buying influences how your product or service can serve his or her self-interest. (Miller Heiman, The New Strategic Selling, page 137 – 156). They differ between results and wins as follows:

Results

1. Impact of a product on a business process
2. Tangible, measurable, quantifiable
3. Corporate

Examples are high return on investment, reduced costs, low cost of ownership and increased productivity and profitability.

Wins

• Fulfilment of promise made to oneself
• Intangible, not measurable, not quantifiable
• Personal

Examples are the buyer enhances reputation with management, increases responsibility, achieves control over others, is looked on as a problem solver or contributes to the organisational success.

The described Miller Heiman approach is the most comprehensive and also most effective buying centre analysis I have come across during my entire sales management education. It can easily be summarised in a matrix form, shown in chapter 5.2.4, figure 17.