John F. Tallitsch Managing Director
Why Do Companies Expand Beyond National to Global Account Management?
Because multinational customers seek strategic partners who:
– understand specific international business needs; and – are able to deploy solutions on a global basis.
Industry Globalization Drivers Global/regional customers Global/regional channelsTransferable marketing Lead countries Global economies of scale High product development costs Fast changing technologies Competitors globalized Global Strategy Global market participation Global services Global value chain Global marketing Global competitive moves Organizational Response Organization structure Management processes People culture Implementation Consistent worldwide service One point ofcontact Partnering with customers Outsourcing for customers Global account management structure Compensation and incentive systems Uniform purchasing and pricing
Need for Global Account Management
Benefits of Successful Global Account Management.
Speaking to customer with one voice, avoiding internal conflict. Increased ability to gain revenue through customers’ international expansion.Efficiency gains and reduced costs – scope and scale economies. Leveraging customer knowledge. Learnings – e.g., sharing best practices. Good service leading to reputational benefits – that can be transferred to new strategic regions or industries. Links across regions that institutionalize customer relationships. Raising customer switching costs – e.g., supply chain elevates interdependencies andcompetitive distinction.
Risks and Costs of Global Account Management.
Lowest national price, terms and/or conditions become the global standard. Pricing inconsistent with local service requirements – e.g., lower price than historical and higher service commitment. Loss of internal support and conflict with geographic managers – from diminished roles of geographic managers. Restructuringthe organization to accommodate global customers – incurring additional fixed costs. Implementing controls and communication channels between all levels of management and across geographies. Hiring appropriate managers and resources with skills and knowledge to work in foreign environments.
Similarities Across Successful Global Account Management Frameworks.
Cross-country reach – notnecessarily to all countries, but:
– to most important ones; – for most important customers; and – for most important activities.
Goal – coordinated, consistent worldwide service. A global account management structure.
– One point of contact. Through assigned Global Account Manager (GAM). Resident near customer’s headquarters. – Focused account team. – Coordinated cross-country sales/serviceresources.
Solutions-oriented, value-added or interdependencyoriented customer/supplier relationship. Account information systems track account details and activity country-by-country.
Dimensions of GAM Compensation.
– worldwide customer sales, support and satisfaction; – assurance company is: perceived as one company at all customer locations; and organized andstaffed to service opportunities in global account. – leading dispersed resources assigned to support account.
Dimensions of GAM Compensation.
– worldwide performance of global account (revenue, costs, profitability); – revenue and profit management span: account quota by country; and country quota by product/service. – cost management: encompass full costs – e.g.,staffing, cost-to-serve, discount expenses; and compiled and held separately country-by-country. – may include metrics pertaining to company’s overall global account program – to ensure: transfer of learnings associated with working with customers; and efficiency gains and reduced costs are realized.
Two GAM Compensation Profiles.
Consumer Products Company Critical Sales Success Factors...