Dull maybe but effective – CRM and major account planning

April 26, 2012 Richard Boardman

I was working with a professional services client a few years back. As our interview process progressed a recurring theme emerged which was the gains one of their key competitors had been making in recent years. Both companies sold to large corporate customers and the competitor seemed to have developed an uncanny ability to unseat or undermine my client in its key accounts. My client had been consistently surprised to see what had previously been exclusive supply arrangements become shared, and shared ones become exclusive to their competitor.

As time went on we started to piece together what was happening. The competitor had developed an account planning process which was proving very effective in focusing business development activity and resources in the right place at the right time. The planning process was performed to a mandated set of time-lines, and, critically, was supported by the executive team, with the CEO reviewing and monitoring each and every plan.

I’d long been convinced of the benefits of major account planning, but this was a particularly powerful example of how a company could significantly reshape the competitive landscape of an industry by using the process so rigorously.

Major account planning tends to be effective for a number of reasons:

• Without wishing to over-generalise it’s surprising how little many salespeople understand about their customers, particularly the major ones. It’s often only when they go through a structured planning process that they start to explore and understand the full potential of their customer base.

• In the natural order of things, sales activity tends not to align well with account potential. Where we’ve undertaken research that plots sales activity against current and potential customer value, there’s often a mismatch of effort versus account potential. In other words there may be a tendency to spend as much time and resource with an account that is only generating, or has the potential to generate £x, with an account that can generate ten times £x. This can be the result of the natural inclination of many salespeople to focus on new business or the tendency to work with the accounts they feel most comfortable with rather than those that realistically have the greatest potential. The planning process tends to identify these disparities and allows resources to be focused where the greatest opportunities lie.

• With salespeople under pressure to hit often demanding sales targets there’s a tendency to focus on the here and now rather than developing for the future. The planning process helps the sales approach become more proactive, focused around developing the most promising opportunities rather than being driven by the most urgent. Major account plan also provides the salesperson and their management with the means to measure progress towards the agreed objectives.

• Given the tendency for major accounts to span different geographies, markets, and product sets, and the likelihood that they will interact with many different teams and staff members, the planning process helps everyone understand that there is a plan, what it is, their role in it, and, in so doing, helps channels energies towards the defined goals.

The components of a plan will vary from business to business depending on the nature of the products and services being sold as well level of detail required, but key areas will typically include:

General profile data – which sets out a profile of the account and its markets and covers areas such as revenue, employees, market capitalisation, locations, subsidiaries, products/services, competitors, news, issues, challenges, and key initiatives

Customer profile data – sets out a profile of the trading relationship such as current and historic revenues, profitability, spend on individual product and service lines, share of wallet, contract end dates, purchasing approach

People – sets out a profile of the key customer contacts, which we have a relationship with, who is responsible for the relationship, and the strength of the relationship

Account team – profiles the responsibilities of internal staff in relation to the account and their roles

Relationship profile – considers the strength of the relationship with the customer and may include analysis of competitive activity, key threats and the strategy to mitigate them

Targets – identifies potential business opportunities, defines revenue/margin targets, and tracks progress year to date

Objectives, and supporting activities – sets out the plans the long and short term plans to develop the account, tracks the associated activities, who is responsible for them and target dates.

The key challenge of the major account planning process is to make the plans actionable. Too often they get hidden away in a filing cabinet, hard-disk or shared drive, and are only dusted off to begin planning for the next year. This is where CRM technology has a role to play. In my earlier example one of the reasons the approach was so effective was the tight integration into the competitor’s CRM system. Managing the major account planning process within the CRM system has a number of benefits:

• It increases the visibility of the plan to those that need it
• It avoids creating and maintaining data in two places as a lot of information such as account profile data, contact data, sales opportunities, news feeds and trading history may already exist in the CRM system
• It’s easier for the management team to monitor progress

In terms of how to integrate major account planning within a CRM system, there are a number of account planning add-on modules available on the market, but, given the flexibility of most of the leading CRM applications, it’s generally relatively quick and cost effective to custom build the capabilities to meet an organisation’s individual needs.

Assuming you can marry up the major account planning process with the right supporting technology, and, critically, achieve the necessary user adoption, the impact can be extremely significant. It may not be the most glamorous use of CRM technology, but it’s one that’s often overlooked, and one that can rapidly make a big difference.