Given the market pressures and demands exerted on customers by:
- Their direct and indirect competitors
- Potential or new market entrants
- Their channel partners or distributors
- The ultimate customer or consumer
the Key Account Manager is, potentially at least, in a unique position to seize the opportunity to add value to the relationship with these key customers. This is predicated on the ability of the Key Account Manager to understand the pressures specific to each customer and to qualify and quantify what each major customer means by “added value”.
Value Pyramid
The potential relationship levels can be characterised as:
Achieving the position of at least preferred supplier status and then building a reputation which allows the customer to perceive suppliers as partners in the total business process is the ultimate purpose of Key Account Management.
Where Is Real Value-Added?
You could argue that any benefit to your customer is added-value. This does not help as a basis for competitive differentiation or long-term partnership – even the commodity sale offers benefits. What differentiates adding-value is that it is a benefit that relates directly to helping an organisation meet its strategic business goals and it is recognised by your customer as being of real value and unique to your solution.
What Is Value?
The improvement of business performance and competitive advantage through maximum leverage of purchased products and services
Why Should We Take A Value-Add approach?
Value-Add approach = higher customer satisfaction, increased revenues, lower vulnerability to competition.
Articulating Value
If opening doors and building sustainable partnerships is dependent on how your customer perceives your added-value, it is vital that you can articulate this and rehearse your customer key contacts in it. Your proposition should contain:
- Your capability
- Track record
- What you can improve (process/function)
- The business improvement i.e. benefit