【正文】 it is not a plete record of the discussion. Client discussion/LOP on multilevel sales improvement program (SSP/sales performance, crossselling and coordination, solutions and vertical packaging) SALES CHANNEL PRACTICE JOHN ABELECL, MIKE LONGMANCL INTRODUCTION Following is a sample client discussion/horizontal LOP that outlines a multilevel sales improvement program that includes: ? Frontline sales performance improvement/better intraunit management of large customers ? Crossselling and sales coordination (typically across units) ? Solutions and vertical packaging With key account management (KAM) as an enabler. This document takes a prehensive view to sales improvement and KAM。 reacting to opportunities ?Relationshipdriven model ? Leveraging sales ? Relying on negotiation skills to extract value ? Minimal market feedback。/lb. Pocket margin Freight costs MSC costs AR carrying costs n/a 1998 162。/lb. vs. benchmark above below above above 2023 target 162。 oneway sales cycle Winners ? Tailored delivery systems ?“Highest priority” to accounts with growth potential ?Lifetime profitability/market value ?Factbased decisions ?Longerterm account strategies。 however, KAM or other sales improvement efforts can and often are shorter or more narrowly focused. In addition, in this particular example, we had deep knowledge of the client situation through previous strategy and pricing studies, as represented on the example pages attached. This might not be the case in your client situation. For more information on these and other sales and channel topics, contact the North American Sales Channel Practice. 1 TODAY’S DISCUSSION Overview of key account management ? Perspectives on the opportunity ? Basic beliefs and approach ? Selected examples Discuss a suggested approach ? Diagnosing the opportunity ? Building the capabilities and capturing nearterm value ? Designing the anization ? Resource requirements Highlight McKinsey qualifications ? Firm experience and resources ? Understanding of your pany Field questions and discuss next steps 2 TODAY’S DISCUSSION Overview of key account management ? Perspectives on the opportunity ? Basic beliefs and approach ? Selected examples Discuss a suggested approach ? Diagnosing the opportunity ? Building the capabilities and capturing nearterm value ? Designing the anization ? Resource requirements Highlight McKinsey qualifications ? Firm experience and resources ? Understanding of your pany Field questions and discuss next steps 3 SUMMARY PERSPECTIVES (note: KAM in this example is one part of the larger multilevel sales improvement program) Our experience with sales improvement efforts indicates that improving sales and gotomarket related activities is often a huge value lever for panies ? Initial estimates suggest that an incremental sales opportunity of over 20% may exist ? Approximately 50% of the opportunity in any area is achievable within 12 months of implementation Key Account Management is only one part of the answer. Achieving these results requires a multilevel sales improvement program including: ? Improved sales force performance/sales stimulation ? Crossselling and sales coordination ? Solutions and vertical packaging In undertaking a key account management effort, your pany should ensure that the effort is ?Founded in a deep understanding of customers’ real needs and what they value in suppliers ? Clearly identifies the nature of the sales improvement opportunity for each customer relative to petitive alternatives ? Tailors the gotomarket and key account approach to fit the opportunity ? Balances nearterm value capture with bestinclass skill building ? Tracks performance and enforces accountability 4 IMPACT FROM SALES IMPROVEMENT IS SIGNIFICANT Sales force performance and stimulation Crossselling and improved sales coordination Solutions/ vertical applications Opportunity size Improvement lever Typical capture rate ? 60100% in addressed areas within 618 months, depending on buying cycles ? ~618 months in areas addressed ? Often more intradivision than interdivision ? ~1236 months ? Winners focus on driving a smaller number of high potential opportunities McKINSEY CLIENT EXPERIENCE ? Median 10% revenue increase –1/2 510% improvement –1/2 10% improvement ? Reduction in sales related costs of 510% or more ? Opportunities exist in 2040% of cases with a 1020% success rate ? Typically 1020% of customers are potential “solutions buyers” ? Conversion rates often in 2030% range ? Revenues current, depending on “solution” Source: McKinsey Marketing Practice Key account management can be an enabler across all of these 5 ROUGH ESTIMATE OF THE TOTAL SALES IMPROVEMENT OPPORTUNITY FOR YOUR COMPANY (disguised example) Incremental sales $ Million Source: Team analysis Sales performance Crossselling Solutions Total opportunity 5001000 200800 950 –2,400 250600 ? Opportunity for ~1015% increase in revenues from sales improvement programs ? Gross margin improvement of ~$ 300500 million ? Actual results will depend on: –Scope of effort –Pace of program –Execution quality 6 Many panies have adopted some form of key account management as a means to break out of product silos and capture incremental value from some of their larger customers. Quite a number have achieved real increases through crossselling and developing mercial and/or technica