ORLANDO -- For Craig Hendrix, Business Intelligence Director and Head of the Customer Feedback Team at Quintiles, partnering with ORC International and focusing on Key Account Management (KAM) strategies has solidified and refined the company’s client relationships.
Quintiles, the world’s largest provider of biopharmaceutical development and commercial outsourcing services, has a network of more than 27,000 employees conducting business in 60 countries. Quintiles has developed or commercialized all of the top 50 best-selling drugs on the market.
During his Thursday session at the 6th annual Loyalty Expo, Hendrix told attendees that each of the company’s client projects ranges between $10 million and $100 million. “We have to lead them through this journey,” Hendrix said.
In 2008, Quintiles partnered with ORC International to develop a structured approach to improve the customer experience with its most valued clients. KAM is a radically different organizational process used by B2B suppliers to manage their relationships with strategically-important customers, and it produces measurable business benefits.
Linda Shea, Senior Vice President/Global Managing Director, Customer Strategies, for ORC International, said KAM “isn’t about transactional relationships. It’s about strategic relationships.”
Shea defined KAM as an enterprise-wide initiative (involving not just the sales forces) to develop strategic relationships with a limited number of customers to achieve long-term, sustained, significant, and measureable business value for both customers and the provider.
“The benefit of KAM is this is a way to grow organically and to align with the correct resources for needs and expectations of customers over time,” Shea said. She said KAM can lift project revenue 5% to 10%, increase margins 3% to 5%, and lower costs 10% to 20%. “Key accounts are about growth opportunities. What is the long-term value of loyalty?”
Pharmaceutical development is complex because product launch and management can only succeed if paired with a deep understanding of diverse stakeholders, health systems, and how to implement strategies. Hendrix said “we never have full alignment” at the beginning of a project because of the plethora of stakeholders involved. Customer feedback is now “part of the deal,” to ensure delivery is as promised.
Shea pointed to some potential pitfalls regarding KAM strategies:
Right accounts – those with the highest upside potential– are not designated as key.
Too many accounts are designated as key.
Too often key accounts are transactional rather than strategic.
As a result of these actions, the accounts that are considered key receive price discounts, but opportunities for joint venture creation are lost.
“This is about true collaboration and helping those clients grow,” Shea said. “The fundamental piece is listening to needs of customers, understanding unmet needs, and how you’re going to fulfill them.”
How do you create excellence in KAM? Structure-deployment-customer engagement, and KAM enabling capabilities, Shea said, “from frontline staff to back office.” Recently a customer provided feedback that Quintiles’ “support of the partnership through their customer group is unique and I think is hugely beneficial for us. They operate with us both at strategic and tactical operational levels, which is also rare.”
Since 2008, customer loyalty at Quintiles has grown by 21%, while customers who feel we have not met their needs have declined 31%.
“This type of progress and success with our Key Accounts has afforded Quintiles permission to explore a number of new and innovative business models,” Shea said.
Shea listed some “keys” to Key Account Management:
Set processes, expectations and goals within your organization for Key Accounts Management.
There has to be an executive-level commitment and involvement that is sustainable over time.
Dedicated resources. “Take a hard look at dedicated resources,” Shea said. “Rarely is there ever just one person making decisions.”
Understand the complexities of long-term client relationships, and the value generated by relationship development.
Align multiple stakeholders, identify and close any performance gaps and deliver at levels that exceed expectations.
Create a feedback loop that constantly informs Key Account teams of clients’ needs and expectations.
Look for ways to leverage specific key account needs into product/service opportunities that could promote differentiation in the marketplace.
Key Accounts are those that have already expressed their faith in a company’s products and services. Companies pursuing Key Account Management should ask themselves the following questions:
Which companies should be our key accounts?
Do we really understand what our key accounts need?
How well are we meeting those needs?
Have we focused the right resources on our key accounts?
Do we have the right KAM and execution plans in place?
Do we have a sustainable approach?