Guest Column

Market inequalities

All customers are not created equal so don't treat them that way, says Sundar Vasudevan

Sundar Vasudaven Principal Consultant TRS Consulting

Have you ever found yourself in front of a new customer and realised that you are speaking to the wrong person just after 15 minutes of conversation? It could be all sorts of things that are wrong - too junior, too new, too hung up about your price rather than your value of travel services.

And worse, you are starting to think you know who the right person is, but try going behind your first contact now and they will cut you off at the knees. If you care about customer retention, then you should care about key account management.

Managing the future

Relationships are the very heart of key account management. They provide the source of information and understanding that can be built into added value activities. They also provide the foundations for long-term business on mutual trust and confidence.

Key account management is not something we do to customers; it is something we do with customers. It's about team effort and more importantly a business wide effort.

• So how have they come by that name?
• Are they just your big travel customers?
• Are they the ones you mustn't lose?
• Are they the ones that offer future profit?
• Are they the ones you want your staff to focus on, to look after your best customers?
• Are they the ones where extra effort will bring extra returns?
• Are they the ones that demand more from you?
• Are they the ones that will take your business where you want it to go?

What's the right answer? As ever in life, it 'depends' - on your travel market, your travel company aspirations, and your current level of success, your competitor's activities and a lot more. There is only one rule, and that is, you make the rules. Don't leave it to the sales statistics. Last year's largest customer may not be one the next year. As they rightly say in the investment adverts, "Past performances should not be taken as a guarantee of future potential". Key account management takes us beyond benefits to solutions, and beyond that to the total business experience. One of the most significant mistakes made by sales persons is that they spend too much time with low potential customers and prospects. Instead of thinking strategically about the ones who really matter, the sales persons respond to every customer in the same way by investing the same amount of time and energy. Sometimes, more often so, they even end up spending more time and resources on low potential prospects and customers because of subjective influences.

One influence can be as simple as how much the sales person likes the customer or prospect. Everyone is inclined to spend more time with likeable people and less time with those who are difficult to communicate with. There are other subjective factors: are the customers or prospects responsive? Do they return calls promptly? Do they communicate clearly? Are their issues relatively simple and straightforward, or complex and difficult? Is it easy and convenient to reach them? Do they make decisions quickly and easily? Or do they frustrate you with a drawn out decision process?

These subjective factors can influence how much time, energy, and other resources a sales person spends on individual accounts. But the only factors that should matter are those that objectively reflect the sales potential of the customer or prospect. Then, of course, the relative level of ease or difficulty of working with that prospect or customer should be balanced against their objective sales potential.

The most effective key account manager starts with an objective view of the customer potential. Then the manager measures the results against the potential, not against last month's or last year's sales.

Here are some things to watch out for:

• Don't expect your journey to be one way; there will be U-turns and side alleys.
• Remember that the strategic intent must be mutual and, even then, don't expect the customer to make it easy for you. You will have to lead a lot of the way, and while stamina and persistence will be two valuable assets, so will subtlety and finesse. You will know when you are getting there, when the customer starts to pull.
• Remember the buyer has a lot of power when they are the only point of contact. Your efforts to develop broader contacts might be for the good of their company, but they might not see it as good for them. You are about to threaten their control.
• To sell or not to sell? If the customer sees your "selling" activity as a pushy concern for satisfying your own needs, don't be surprised if you come up against obstacles. If they perceive it as seeking solutions to their problems, the doors will start to open.
• Estimate the account potential of each customer. Be conservative with your prospect estimates, but make a genuine effort to determine the sales potential.
• Classify all accounts as A, B, or C accounts. Based on estimated sales revenues, the top 15 per cent of customers and prospects are your 'A' accounts. The next 20 per cent are 'B' accounts. The remaining 65 per cent are 'C' accounts. This 15-20-65 split is a rule of thumb and may not fit every situation exactly, but you should develop an 'A-B-C' classification for your situation.
• Allocate 35 per cent of your time on 'A' accounts, 25 per cent on 'B' accounts and 15 per cent on 'C' accounts. This 35-25-15 per cent allocation of time helps you spend a significant amount of time with your major 'A' accounts while giving you an opportunity to develop your minor 'B' and marginal 'C' accounts.

The author is principal consultant of TRS Consulting and can be contacted at trs@bc.kv.ae