Key Account Management Presentation

2013-06-11/V81/Mkl· Key Account Management · 1
Key Account Management
The SAMSON GROUP Approach to Key Accounts
Abey Mankulam
Head of Department / Key Account Management

SAMSON AG

Contents
1. What is a Key Account?
2. What is Key Account Management?
3. Key Account Manager (Skills & Qualities)
4. How to develope a Key Account?
5. Key Accounts at SAMSON
6. Why Key Account Management is Important for SAMSON GROUP?
7. Examples for Key Account Management at SAMSON
8. Key Account Management (Conclusion)

1. What is a Key Account
 Is a consistent high revenue producer.

 Is offering opportunities to increase sales.
 Is looking for a loyal business partner/adviser.
 Is a strategically important industry or market opinion leader.
 It could be an existing customer that spends a lot of money year on year
 It could be an existing customer whose ´reference´ is of particular value even
though they don‘t spend much.
Most companies now do more business with fewer customers than ever before. But
each of your key customers takes on critical importance to the companies business.
Losing even one of them would be disastrous: although keeping them can be
financially punishing too.

1. What is a Key Account (the Benefits)
 The Key Account as a Business Partner (the Benefits)
 Profit from a mutually beneficial business dialogue
 Lock out your competitors
 Be able to focus on long-term planning
 Secure a constant and reliable revenue stream.

 Key Account Management (KAM) is a professional sales approach which involves

the supplier and customer’s business working together to achieve common goals.
 Key account management is a strategic planning approach that goes beyond
traditional selling to tackle today’s customer issues.
 This is not a Buyer-Seller relationship, you need to involve people from all aspects
of your business and they should be talking with people working in all the activities
of your customer’s business.
 Both parties combine their expertise, working together to find better ways of doing
things. They achieve cost savings by re-engineering processes, reducing inventory
and avoiding unnecessary activity. Cost savings are achieved as a result of a better
understanding of each other’s business. Importantly, the cost benefits achieved are
shared by both parties.
 This describes a customer-oriented coordination unit within a company, in which
activities associated with very important customers are consolidated.
 In this context, the focal point for the coordination of marketing tasks is a small
number of selected customers who are of great significance to the company. The
objective of key account management is to gain a thorough understanding of key
customers. Furthermore, the coordination with them has to be done in such a way
that different employees display a uniform approach towards these customers.

 How would you define a Key Account?
 What are the objectives of a Key Account Strategy?
 How does a Key Account Approach differ from a traditional Sales Approach?
 What are the most importatnt issues in Key Account Management?

 The Role of The Sales Organisation
If most of the orders which the company receives are repeat orders from existing
customers, then the role of the sales organisation is customer development rather
than traditional selling.

 The Key Accounts can be divided in to three categories:
 Global Accounts
 Regional Accounts
 National Accounts
The principles are the same,

The complexity is different

 The Account Portfolio Matrix

The Competitive Position of Supplier
Strong Average Weak

Attractivenesss of the Key Account to the Supplier
High
Develop/ Develop Maintain
Defend selectively
Medium Defend/ Maintain

Develop maintain minimally
Low Defend/ Maintain

selectively minimally Withdraw
Accounts targeted for key account management must be mutually beneficial for both
the supplier and customer

 Development of Global Key Account Management
Number of Future
Accounts
Global Partners Importance
Key Global Accounts
Key Regional Accounts
Key National Accounts
Development National Accounts
Target National Accounts
The principles are the same

The complexity is different

 Why a Key Account is different
 Your competitors are constantly trying to win them from you.
 Multiple decision makers and many staff influence the buying decision.
 An anti-sponsor may exist in the key account-someone who may subtly try to sabotage
your sales efforts or relationship.
 It is especially important to understand your Key Account‘s business.
 Strong relationships need to be developed across numerous levels between the two
companies.

 The Key Account Manager
The role of the Key Account Manager
Understands all aspects of the Key Account´s business.
Proactively develops more business with the customers.
Establishes strong relationship with the decision makers in the customer´s

organisation.
Builds a wide awareness of your firm´s capabilities throughout the Key Account
Handle the Key Account in a professional manner on a day-to-day basis
Develops a true business partnership with the Key Account

 The Key Account Manager
The role of the Key Account Manager
Be the main link into your company for all issues
Understand his business, market needs and competitive environment
Help to sell them products/services that achieve their business objectives
Add value to the business relationship with your firm, for example, acting as a
consultant on issues not directly related to your main business
Help exploit market opportunities and, when possible, identify new and exciting
business challenges

The Key Account Manager

Skills and Qualities
Key Skills Key Qualities

Planning Focused
Marketing Diplomatic
Relationship building Tenacious
Problem solving Flexible
Negotiating Independent
Opportunity creating Team player
Organisation Opportunity seeker
Communication
Presenting
Selling

Who is a good Key Account Manager?
Someone who is interested in more than a short term sale.
Someone sees the customer as strategic to their own success as well as the
companies.
A good problem solver who is able to bring a customer always back to a state
of ´glad´regardless of the issue.
Someone who can think outside of the immediate environment and project
issues the customer is likely to have before they have them and provide
solutions to the same.
A person who is willing to input time and effort without immediate financial
compensation.

 How to develop a strategy?
Now that we know who our key accounts are, we have to have a strategy to
manage them so that not only will they stay with us, remain as “key,” but
also grow in value for us. This is accomplished through a strategic plan, the
main steps for which are shown below.
Key Account Management Strategy Development
Needs Skills and Delivery of solution

Assessment capabilities
development
Products
Exceed
and services
expectations
portfolio
Understand Help them
Support and
customer grow sales
service
needs and income
Customer Be a partner,
value not just a
creation supplier

 Customer needs assessment:
The initial approach to a key account management strategy has to start with a
comprehensive understanding of customer needs. The simplest way is to interview /
discuss with the customer, rather than rely on published reports or advice from
outside agencies. Only the customer can tell you what they need from you.
 Skills & Capabilities Development:
Once we have an understanding of what your key accounts need, we must do an

inventory of our in-house skills and capabilities. That would enable us to identify the
gaps that we have. The result is a good list of what we need to develop through
training, hiring, partnering, etc. Generally, these skills and capabilities can be divided
into three distinct groups:
1) Products and services portfolio
2) Support and service
3) Customer value creation

 Products and services portfolio:
This is the most basic requirement in order to serve a customer. We must have the
right products and services in our portfolio to present the right solution. In many
cases we may not have everything in-house, but as long as it is clear to the
customer that we can be trusted to deliver it, they don’t care if we outsource it.
Having said that, it is very important that if we plan to outsource or subcontract a
specific product, it is our responsibility to make sure that our customer’s needs are
met. There is no room to pass on the buck to another vendor.
 Support and service:
It is very ironical and frustrating to suppliers that they may receive no praise for
excellent products but get into a lot of trouble for poor service and support. On the
other hand, customers can be a lot more patient with not-so-good products as long
as our service/support is unmatched. In summary, there is simply no room for
compromising on support and service. With our key accounts, the best approach is
to provide a single point of contact (with a backup) to them for all kinds of support
and let this person coordinate internally how to gear up appropriate resources as
and when needed.

 Customer value creation:
It is the most important skill that we may need. In order to maintain your business
relationship with the key account, we have to meet the requirements of the
contract and provide necessary support and service, but what will really
differentiate us from our competitors and shield us from future competition is how
we create value for our customer.
In today’s world, not many companies have offerings that only they, and no one
else, can provide. Both direct and indirect competition is everywhere, but by
creating value for our customers, we can differentiate ourselves, and hopefully,
expect long-term business and higher prices.

 Delivery of solution:
The final step in key account management is delivering on the promise that we
make to our customer. What can we do different for our key accounts then?
 Exceed expectations:
Our customer will have certain expectations, and in most cases, it will be clearly
spelled out in a legal document. As an account manager, that is something that
we need to keep an eye on, but what will endear us to our customer is when we
exceed her/his expectation. While it is tempting to adopt an “under-promise and
over-delivery” strategy, a better approach is to truly demonstrate to our customer
that we exceeded her/his wildest expectations because most customers are pretty
sharp to figure out that we under-promised and over-delivered. Such a strategy
produces enormous dividends through “word-of mouth” marketing. When we
exceed a customer’s expectation, your behavior leads to stories and anecdotes in
the marketplace – exactly what we want.

 Help them grow sales and income:
We may want to think that our job is to deliver what the customers wants and
grow “our” sales and income, the reality is somewhat different. Remember that we
exist because of our customers. In other words, when our customers prosper, so
will you. By helping our customers grow their business and become more
profitable, not only are we endearing ourselves to them, we are also creating
value for our business.
 Be a partner, not just a supplier:
Almost anyone can be a supplier, but with our key accounts, we have to be their
partner. Once we start to help them grow, share the risks, and create value for
them, we have become successful in creating “customer delight” – the biggest
achievement of a key account management strategy.

Customer Data Bank
 There will be more than 60.000 customers registered in the customer data bank at our
Head office, other sales offices, subsidiaries and daughter companies world wide.
 In SAMSON AG we have 44903 Registered customers available in our customer data

bank at Frankfurt.
 From those we have identified 173 that are globally active.
 37 of these are listed within the SAMSON AG, `Key Account Customer´ list and distributed
over various industry sectors.

 Revenue Generated by the 37 Key Accounts:

6. Why Key Account Management is Important for
SAMSON GROUP?
 Many of our current Key Account Customers are based in Germany, some are
from other European countries, North America and Asia.
 As per SAMSON strategy, the Key Account Customers are served by our nearest
local office, typically where the customer HQ is situated. e.g BASF by SAMSON
Mannheim, Bayer by SAMSON Cologne, Air Products by SAMSON USA / UK, Air
Liquide by SAMSON France etc.
 As these key accounts start to invest more in different Global locations, it can
become difficult to satisfy all of the customer requirements from the local sales
office that originally developed the account. This can be due to the difference in
time zone, the local business approach, culture, language, etc.. It therefore
becomes very important for us to support customers wherever they conduct their
business.

SAMSON GROUP?
 Management decision to establish Key Account Management at SAMSON AG
Based on the increasing requirement to effectively manage our Key Accounts,

the management of SAMSON AG decided to establish the „Key Account
Management system“.
This is in order to coordinate the techno-commercial activities, solve any
issues (if necessary), improve the communication between SAMSON AG 
Samson local sales offices Local and the Head office of those accounts.
Since June 2011 we have assigned our first official Key Account Manager for
the Bayer Group. Following on from this, we assigned Key Account Managers
for our business sectors in the Petro-Chemical Industry and Air Seperation
Industry.
As the SAMSON Groups presents our products under the „Main Valve Vendor“
principle, it is very important to include and ask for the active participation and
involvement of the daughter companies in the „Key Account Management
System“.
In future, SAMSON AG will define and establish more Key Accounts and Key
Account Managers together with the relevant daughter companies.

SAMSON GROUP?
 Our Key Account Management Team should always be in contact with our
customers and local sales offices in order to provide the best and effective support.
 Key Account Management should also try to find new accounts with the help of our
outside sales offices who should be involved in all the Techno-commercial
discussions until an agreement is ultimately signed.
 The Key Account Management team should coordinate further activities such as
Techno-commercial meetings with the support of Product Management, R&D and
the Sales Team. Additionally they should undertake discussions and negotiations
to extend the existing Global agreements and monitor the performance of the Key
Accounts. In order to maintain the existing accounts, new product development or
custom made solutions for the specific applications for the Key Accounts, should
be introduced with the help of our International Service Team and the after sales.

 How to create a new Key Account (Frame Agreement for Angle Control Valves
between SAMSON AG and Linde AG).
As one of the main global control valve suppliers for almost all industry gas
manufacturers, we have also wished to become the main „Cold Box Valve“
supplier for Linde .
For the last 40 years Linde were using cold box valves from another manufacturer
against a Frame Agreement that had existed for more than 25 years.
It was not easy to break this barrier because cold box valves are not like
standard control valves. If a customer wants to change from one supplier to
another, they have to change many of their work process, create new plant
design drawings, institute training and at the same time become familiar with new
products. Additionally they have to understand new technology as well as getting
to know a new technical, commercial and after sales service team etc.
After our continued and intensive work with Linde over the last 10 years, Linde
were prepared to revisit their Global Supply agreement for the cold box valves.
Towards the end of 2011 we received an inquiry for a new Frame Agreement and
throughout 2012 we underwent several techno-commercial evaluations and
discussions.
 How to creat a new Key Account (Frame Agreement for Angle Control Valves
between SAMSON AG and Linde AG).
After successfull discussions and negotiations, we eventually signed a new

Frame Agreement with Linde AG. This was for the world wide supply of Angle
Control Valves for their Air Seperation Unit business sector.
 What are the advantages of a Global Supply Agreement?
We establish a consistent customer over a fixed time period.

We can guarantee the work load for the production department for the duration
of the contract.
In turn this helps us to source batches of raw material in order to reduce
delivery times and production costs.
Consistent business enables better planning in the sales and production
facility.

 How to keep an existing Key Account (Relationship between SAMSON and

Bayer/Lanxess).
 During the negotiations for the revalidation of the Global Supply Agreement between
SAMSON AG and Bayer (including Lanxess), Bayer insisted they have a „Key Account
Manager“ from SAMSON AG to help monitor the world-wide activities between the two
companies.
 Without appointing the Key Account Manager, Bayer were not willing to extend the Global
Agreement .
 Once Samson AG had appointed a Key Account Manager, Bayer Group were confident
enough to sign the agreement for another three years.
 This arrangement has since increased our business with the Bayer Group (including
Lanxess) by around 13% in the year 2012.

 How to keep an existing Key Account (Relationship between SAMSON and

Bayer/Lanxess).
What is the activity of SAMSON Key Account Manager at Bayer/Lanxess Business
Work as a contact person between SAMSON AG Head office and Bayer / Lanxess , central
/ local offices and Samson worldwide sales organizations.
Collect information regarding new projects, coordinate it with SAMSON Sales offices,
daugther companies and Bayer / Lanxess Procurement and Project team.
Coordinate Technical discussions regarding new innovations between our R&D and Bayer‘s
Technical Team.
Be involved in any techno-commercial discussions and if any delivery or pre / post-sales
issues occur.

 How to keep an existing Key Account by providing new technical solutions

(Business between SAMSON and PRAXAIR)
 Praxair, one of our long standing customers in the Air Seperation Industry more recently
started to manufacture extremely large Air Seperation Units to produce 3000 T/D, high
pressure Oxygen (90 bar).
 Two such plants are operational in the Peoples Republic of China.
 This process and capacity was new to Praxair and SAMSON and during the start-up of the
first plant, some issues occured. In particular these concerned a number of critical service
valves such as, High pressure Oxygen Vent Valve, Turbine Bypass valve and Pump
recycle valves.
 The problems were mainly due to the wearing of parts made from Monel 400 material.
Monel 400 is a relatively soft material to employ within critical process conditions. However
due to material restrictions for high pressure oxygen application, we were forced to select
this material during the project execution. Unknown to us, flashing / cavitation occured
within the valves during the start-up.

 How to keep an existing Key Account by providing new technical solutions

 As the problems manifested, Praxair contacted us for quick solutions to get these plants to
run and provide long term solutions for future projects.
 By knowing the problems and urgency on site, the Key Account Management organized
several Technical discussions between, PRAXAIR Head office, PRAXAIR China, Samson
Controls Canada (nearest office to PRAXAIR Head office, who manage the Account),
Samson Controls China, SAMSON AG Products Management, R&D and International
After Sales & Service departments.
 The venue for the discussions were at Frankfurt, USA and China.
 In order to conduct a detailed study to find a solution, we conducted several plant visits to
understand the real situation on site, collect exact process data from DCS Log etc..
 After various successful discussions, we presented new robust designs (short term and
Long term) for these items. With the help of our Production team, the spare parts and
spare valves were produced and supplied to PRAXAIR.

 How to keep an existing Key Account by providing new technical solutions

 Our committed involvement to settle this issue also assisted Praxair to revisit their process
conditions and facilitate optimizations for future projects.
 Praxair greatly appreciated our efficient involvement and after sales support as well as the
Long term solutions we offered.
 This activity helped us to secure another order for the second project and more recently a
third such project.
How can such incidents affect the Business!
 With the above mentioned technical issues, our competitors tried and were able to
convince the Technical Team from Praxair to use four of their valves in a new project.
 With the focussed help of our Key Account Management and all other resources, we are
now working against this issue.

7. Examples for Key Account Management
LEUSCH Contracts (Key Account Development)
 TRANSNEFT approval for LEUSCH

LTR 43 and BVL (received Februar 2012
after 2-year certification process)
 Main Requirement for valves

 Ultra sonic test
 X ray test
 Hardness test
 Material test certificates for all parts
 Impact test at required ( minus)
temperature
 Hydraulic pressure test with longer test
time
 Special painting with protocol of every
paint batch, Thickness measurement by
dielectric continuity of >=6KV/mm.
 And many others

8. Key Account Management
 Conclusion:
There will be considerable effort to acquire a new Account.
A new account is always at risk and should be carefully attended to ensure we

do not lose it.
Please do not forget or ignore the activities of competitors!
Our competitors will always be doing their best to wrestle our customer from
us.
Always be vigil and alert in order to maintain each and every Key Account.
These are very necessary accounts to help us fulfill our year 2020 vision!

Thank you for your interest!

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2013-06-11/V81/Mkl· Key Account Management · 1

Key Account Management

The SAMSON GROUP Approach to Key Accounts

Head of Department / Key Account Management

2013-06-11/V81/Mkl· Key Account Management · 2

1. What is a Key Account?

2. What is Key Account Management?

3. Key Account Manager (Skills & Qualities)

4. How to develope a Key Account?

5. Key Accounts at SAMSON

6. Why Key Account Management is Important for SAMSON GROUP?

7. Examples for Key Account Management at SAMSON

8. Key Account Management (Conclusion)

2013-06-11/V81/Mkl· Key Account Management · 3

 Is a consistent high revenue producer.

2013-06-11/V81/Mkl· Key Account Management · 4

 The Key Account as a Business Partner (the Benefits)

 Profit from a mutually beneficial business dialogue

 Lock out your competitors

 Be able to focus on long-term planning

 Secure a constant and reliable revenue stream.

2013-06-11/V81/Mkl· Key Account Management · 5

 Key Account Management (KAM) is a professional sales approach which involves

2013-06-11/V81/Mkl· Key Account Management · 6

 How would you define a Key Account?

 What are the objectives of a Key Account Strategy?

 What are the most importatnt issues in Key Account Management?

2013-06-11/V81/Mkl· Key Account Management · 7

 The Role of The Sales Organisation

2013-06-11/V81/Mkl· Key Account Management · 8

 The Key Accounts can be divided in to three categories:

The principles are the same,

2013-06-11/V81/Mkl· Key Account Management · 9

 The Account Portfolio Matrix

Strong Average Weak

Medium Defend/ Maintain

Low Defend/ Maintain

2013-06-11/V81/Mkl· Key Account Management · 10

 Development of Global Key Account Management

The principles are the same

2013-06-11/V81/Mkl· Key Account Management · 11

 Why a Key Account is different

 Your competitors are constantly trying to win them from you.

 It is especially important to understand your Key Account‘s business.

2013-06-11/V81/Mkl· Key Account Management · 12

 The Key Account Manager

The role of the Key Account Manager

Understands all aspects of the Key Account´s business.

Proactively develops more business with the customers.

Establishes strong relationship with the decision makers in the customer´s

Handle the Key Account in a professional manner on a day-to-day basis

Develops a true business partnership with the Key Account

2013-06-11/V81/Mkl· Key Account Management · 13

 The Key Account Manager

The role of the Key Account Manager

Understand his business, market needs and competitive environment

Help to sell them products/services that achieve their business objectives

2013-06-11/V81/Mkl· Key Account Management · 14

The Key Account Manager

Key Skills Key Qualities

2013-06-11/V81/Mkl· Key Account Management · 15

Who is a good Key Account Manager?