Howard O’Neill of Yorkshire Water in the UK shares some tips with pharma about Key Account Management.
eyeforpharma: Can you tell us a little about how Yorkshire Water came to implement KAM with its business customers?
O’Neill: We implemented KAM in 1991-92. Yorkshire Water has about 4 million customers, of which about 140,000 are businesses, and our top 1000 business are worth about 20% of our turnover- so it’s a large percentage for such a small group of customers.
In the early 90s, we realized that they were dealt with like any other customer – if they had a debt, they got a note and no different treatment. So we set up a key account team to understand the needs of those customers, and we started that simply by gathering information – who they were, where they were, how big they were, how much they paid us.
We then went about forming a team to manage the interfaces those customers encountered down to a single point of contact, and what we found, of course, is that many of the customers had different needs. We needed a close understanding of their industry and their needs, so we tried to ensure that the account management team had a multitude of skills that could be shared and spread amongst each other. It wasn’t easy, but since we first formed our teams, customer satisfaction rates with our business customers hasn’t gone below 95%. Every quarter we carry out research, and we’ve maintained a very high satisfaction rate.
What we’ve found, as time’s gone on, is the very first thing these customers need is reliability of service. They need value for money and they need trust in the people they’re dealing with. We’re talking about customers who are very big and are household names, such as BP, Coca Cola Enterprises, Kodak, Smith and Nephew, Britvic, Reckitt Benckiser, Agfa, Syngenta, Carlsberg, Cadbury Trebor Bassett, and Nestle, as well as many Health Trusts and universities. They pay us up to several million pounds a year, and we didn’t understand their business.
Once you make sure reliability, value for money and trust are place, then you can start focusing on giving customers extra value, responding to their unique needs and improving, really, from a supplier to trusted partner. The value and payback to us from getting to that level has been tremendous – when these customers call in they consider it an issue, rather than a complaint. If they require added value services, which they’re prepared to pay for, they come to Yorkshire Water as their first port of call, because we have that level of relationship after these years.
When we first set out, we knew it would be important to have the right systems and processes to cope with the massive amount of data relating to business customers. We introduced a bespoke billing system, a Lotus Notes database for capturing all activity, interactions, issue management, key interfaces as well as industry and market information. Once we created that platform for managing the base level of service, we got really involved in new initiatives to develop different methods of sectoring customers – to address the food and drink industry in a different way than say the chemical industry. We’ve introduced new onsite services tagged to the different types of industry – sales targets as well as service targets – and what we’re finding is the stronger the relationship the greater the sales opportunity. To me sales and service are one and the same, selling a product is the same as managing an issue – they both are responding to a customer need.
The account managers have an excellent service relationship that provides a natural door opener, if you like, to introducing new products and services. And the customers, from that background of trust, believe that we will deliver excellent added value at the right price. And we’re not a delivery company that’s going to go away – we’re here for the long term. We find repeat orders are now more frequent due to previous satisfaction. We started account managing the top 1000 businesses, but now manage many multi site customers as well. We account manage all of the large food retailers, such as Asda (Wal-Mart), Sainsbury, and Tesco and non- food retailers such as the DIY chains, banks and finance institutions.
The multi-sites are a very strong group for getting sales from – Asda has 500 stores around the UK, and Tesco has 2,000 stores – we’ve not only sold to them in Yorkshire, but in all the other water company areas as well now. And then what we do is develop new products that respond to their needs, that we can deliver effectively – so that might be leak detection and repair, installation of equipment to either conserve water or meet UK water regulations, etc.
eyeforpharma: What tips can you give to pharma?
O’Neill: First of all, when you establish a team of account managers, you really do have to pick the right people for the right roles. You first need to gather the information about your customers – what their needs are – because even though you might deal with three similar organizations, they’ll each have different needs. We’ve found with retailers that we think they’ll all want the same products, but they don’t, because they’re at different stages in their own development. So you really do have to gather as much information as you can about your customers and make sure that’s captured in the system. Then, you need to set up a team of people who will interface with the customer and make sure that you have the right people, with the right strengths, paired up with the right customers to match their needs.
I have an account manager who was brought in from outside our industry who is an exceptional sales person and he deals mainly with the multi-sites. I have a lady on my team who is second to none at managing service and she will take care of customers who have really big issues. So, there’s a lot to be said for having the right people, matched to the right customers or sectors, and multi-skills within the team help because you can then interact and exchange development between the people within the team, as well.
I think above all with key account management, it’s accepting that the key account manager is the main, if not the sole, point of contact with a customer and your industry has to accept – like in the water industry – that everybody within the business either acts through or informs the account manager of all activity with the customer. So a customer doesn’t deal with a multitude of contacts, he’s got a single point of contact that manages their needs.
Through building up that excellent service and loyalty, you’ll find eventually that customers come to you –to meet their service needs or to sell them products. It’s continuously raising the awareness of what you’re capable of doing – and I think as an organization you have to prove that you’re the best. Yorkshire Water’s vision is to be recognized as the best water company in the UK and to demonstrate that we’re in that position, we’ve been named three years in a row the utility of the year. And, in our regulator’s eyes, we’re also the most efficient with our operating and capital expenditure.
eyeforpharma: What happens when you’ve built these strong relationships and then your Key Account Manager retires or leaves for some reason? How do you account for that?
O’Neill: It could be a problem. The way we overcome that is every now and again we rotate portfolios. So, depending on the account manager, he or she may have just 30 large customers or 100 smaller ones. And we have a progression ladder process within the team to keep development and career progression going. But also, when we get to the higher level, we interchange portfolios so that each account manager has full awareness of other people’s customers. And the team is a really tight unit, and we really do work together and share information and experiences.
We also develop and implement Key Account Management Plans(KAMPs) that summarize a business’s strategies moving forward, and what our strategy is with that customer – the strengths and weaknesses between us, our program moving forward for the short term (next quarter) and the long term, who we need to meet, what’s going on, what research, etc.? So we maintain that at a high level for all of our businesses.
Our ability to project future needs of a customer sets us apart and keep us at the front of the industry. We introduce various innovations for customers – service plans, customer commitments for large customers, a web base extranet service – things we do to add value to the relationship. You have to think out of the box if you want to show that you’re a step ahead of the rest – and customers are really responsive to that sort of thing – it just strengthens the trust.
eyeforpharma: What’s in the future for KAM?
O’Neill: We’re always looking at ways to improve service. We have a couple of philosophies: getting it right the first time, avoiding things that could go wrong, and never being in a position where we have to apologize. We plan things more proactively, so we’re right the first time. On occasions where things do affect service, and this can be issues beyond our control, we must ensure we manage the best solution as effectively as possible.
KAM is all about improving relationships with strategically important customers, and doing this by understanding the issue and challenges facing them. A good example of this is that for many of our major customers, CSR (Corporate Social Responsibility) is the latest hot issue. We are now looking at developing a new range of products and services that will help our customers achieve their CSR goals. Some products such as Rainwater Harvesting may have a long payback period, but provide an essential ‘green tick’ in the CSR box. Many businesses are now looking at their carbon footprint and how to reduce it. And we can help in this area.
The other thing is that competition has been on the horizon for the water industry since the market was opened up for the other utilities, such as electricity, gas and telecoms. Right now, customers don’t really have a choice with respect to reducing their costs with another supplier, but we need to treat them as though they do. Our regulators and new entrants to the market are trying to open up the industry, so we have to look ahead and work now to earn their loyalty.
To learn more about Key Account Management for pharma, join us at the KAM workshop in Barcelona. For more information or to register for the Implementing Key Account Management for Pharma workshop, April 1, 2008, visit www.eyeforpharma.com/sales2008/KAM.shtml.
