11 Nov The Business Review: a modern classic, so important also during difficult times
How are strong relationships built? By talking to each other and by making sure that conversations are meaningful to both parties.
What is true in the private life is true in business as well, especially between a supplier and their customers.
As a company, business unit or sales leaders, here are a few facts to keep in mind:
First, In B2B, on average, 70% of revenue comes from existing customers. For companies delivering high-added value solutions or services, this proportion is usually higher.
Second, keeping and growing existing customers is far less expensive then acquiring new ones. Depending on sources the cost varies by a factor of 5 to 15.
Third, in a difficult time, customers need support. They need their suppliers to come to them with a “seek to serve” mentality. You can be sure that customers immediately see a difference between suppliers who genuinely do their best to help and those who try to sell no matter what.
There is one straightforward conclusion the above. A very pragmatic one.
In order to understand their customer needs, in good like in bad times, suppliers need to run regular Business Reviews with them.
During difficult times, running good Business Reviews is more important then ever
Business Reviews: classics never die
Business Reviews have always been a crucial instrument to orchestrate the relationship between a supplier and their customers. The evolution of social and economic parameters or business models and the disruption caused by the sanitary crisis do not make them less important. On the contrary.
This being said, the practice of Business Reviews must be adapted to the context and to the importance of each customer.
To keep things relatively simple, let’s consider two types of context: Account Management and Key Account Management and let’s see how the execution of Business Reviews adapts to the depth of relationship between the supplier and each customer.
For a blog post on the difference between Account Management and Key Account Management, go here.
Business Reviews in an Account Management context
Account Management (AM) is the set of processes and practice used by a supplier to manage all aspects of the business relationship with each customer: sales, delivery and support, administrative and contractual aspects, satisfaction and tactics for growing the account. Account Management is part of a company’s operating model (companies who do not consider it that way, shoot themselves in the foot).
A good Account Management system includes a commercial segmentation method (also called customer targeting) that allows customers to be prioritized and ranked based on current volume, growth potential and sometimes their usage profile of the supplier’s offering.
In such a context, regular Business Reviews (BR) are used in priority with major clients and those with high development potential. Whatever their frequency, they are mainly used to analyse together what has happened since the previous meeting and to plan operations for the next reference period.
For example, suppliers of professional services (bookkeeping, corporate travel and accommodation, marketing & communications) leverage regular reviews with customers to share a precise picture of what has been delivered against the Service Level Agreement (SLA), discuss performance as well as encountered issues. Then, the same meeting is used to jointly plan ahead. Occasionally, Business Reviews can also be used to discuss the mid- to long term evolutions of the customer’s needs and of the supplier’s offering.
The frequency of the BR depends on the nature of the supplier’s offering. A provider of professional services might run Business Reviews on a monthly basis whereas a supplier of industrial equipment requiring service at a low frequency, might run them only on a quarterly basis on even less. The frequency, length and content of the meeting can also vary with the size of the customer and how much of the full spectrum of the supplier’s offering they are using. With this in mind, large accounts might be managed with full-fledged BRs whereas smaller customers are managed with less frequent and simpler meetings or even remotely. When a supplier uses a Customer Success team as part of their support model, this can influence the format and frequency of Business Reviews.
On a Key Account, the Quarterly Business Review is a key instrument to implement the Account Strategy and the associated Account Plan
Business Reviews in a Key Account Management context
True Key Account Management consists in engaging a small number of carefully selected customers into a deeper relationship aiming at creating more value for both sides. KAM is a strategic initiative which comes on top of plain Account Management. KAM accelerates the execution of a business strategy and, well implemented, is a an accelerator of both growth and innovation.
In a Key Account Management approach, the dialogue with the Key Accounts is deeper than the dialogue with standard customers. In this context, the Business Review is even more important because the stake for both involved parties is higher.
In a Key Account relationship context, (Quarterly) Business Reviews take place within the frame of a Key Account Plan. A good Key Account Plan is very specific on which relationships need to be created, developed and nurtured and why.
For example, LafargeHolcim, a construction material company uses Business Reviews with its Global Accounts to drive collaboration in the field of R&D and to discuss long-term opportunities on major projects. Schneider Electric, a major provider of electrical equipment, uses Joint Business Planning meetings with their strategic accounts to agree on specific initiatives that go well beyond the “business as usual” activities. In addition, well driven Business Reviews also provide an opportunity to discuss market trends and share prospective information such as technology and product roadmaps. This is used intensively by companies practicing KAM is a technology-driven environment.
The sanitary crisis has disrupted the operations of many companies. Organisations who master Key Account Management, or even plain Account Management, are leveraging the encountered challenges to deepen the dialogue and therefore the relationship. The smartest practitioners will strive to maintain this enhanced quality of dialogue even once the crisis is over.
Who should be involved?
When the context and purpose of the Business Review are clear, defining who is involved on the supplier side is quite straightforward, at least for the regular participants to this type of meeting.
In a plain Account Management context, the regular participants on the supplier side must be the person in charge of managing the delivery and the sales person in charge of the account (often called Account Manager but other titles are also possible).
This may vary depending on the type of business. For example in a Public Affair or Public Relations Agency, several members of the Account Team attend the Business Review who is usually led by the Account Director.
In a Key Account Management context, the logic is the same. However, given the deeper and broader scope of relationship, more people might be involved. In most cases, they are part of the core Account team and they are involved with contacts at the Key Account on a regular basis. Depending on the list of topics on the agenda of the review, other people on the supplier side might be involved occasionally. The participants on the customer’s side mirror the supplier’s side.
For example, if a KAM relationship implies collaboration in the area of Product Development and Marketing, members of these functions should be involved in the BRs and the relevant contacts on the Key Account side should also attend . In a B2B2C environment such as in consumer electronics or cosmetics, it is quite usual that the marketing and category management teams of both the retail chain and the supplier share their views on the market and jointly plan sales promotions and marketing campaigns.
The above illustrates that when a KAM relationship covers multiples functions, specific regular meetings might be required between these functions. A big mistake to avoid is the “fat” Business Review with too many participants and topics.. This kills productivity and generates frustration. All in all, it is part of the KAM engagement methodology to define which regular interactions must take place, for whom and at which frequency. The clarity on the purpose drives the set-up of the meetings.
Proper execution of a Business Review
A good Business Review should always present the following characteristics;
- A clear context (clear to both parties).
- A clear agenda communicated in advance.
- An adequate list of participants with people who will contribute and benefit.
- Well-prepared participants.
- A focus on dialogue, not on presentations.
- Data-driven discussions, whatever the discussed topics.
- Actions-oriented: the meeting is concluded with decisions on actions with clear owners and deadlines.
- Disciplined follow-up: the progress on actions is monitored and communicated. Actions are briefly reviewed at the beginning of the next meeting.
Each of the above-listed parameters contributes to the success of the Business Review. In a Key Account Management context, the agenda and the follow-up of the BR must be put explicitly in the framework of the Key Account Plan, at least the part that is visible to the Key Account.
The quality of a (Q)BR process is also a marker of the discipline of an organisation with customer management and also of the talent and proficiency of the (Key) Account Manager.
What about your own QBRs?
If you have reached the end of this article, it is probably because you found its content relevant to you.
So, what about the (Q)BRs your company runs with customers? How good are they?
Which actions do you feel taking after reading this article?
- Nothing, because you are doing everything right? Well, congratulations! However, are you really sure there are really no areas for improvements in your company? Have you leveraged your established Account Management and Key Account management methodology enough to protect or grow the business with these customers?
- Re-evaluating the list of customers with whom you run (Q)BRs? You prioritisation of customers might have changed. Some relationships might be more at risk than others. Adapt the list of customers with whom you run regular Business Reviews accordingly (and give no customer the feeling that you are just dropping them!)
- Improving the execution of Business Reviews using the list of crucial parameters presented above? Use a collaborative continuous improvement approach and work by small increments. The cost will be limited but the potential impact high.
- Improving Account or Key Account Plans so as to create a stronger framework for the QBR process? If some dimensions of your plans are not progressing as expected, consider how the preparation and execution of Business Reviews can contribute to solve the problem.
- In case you haven’t run QBRs yet, start them with your most important accounts? By the way, this could be a first step to define a Key Account Management initiative.
Whatever your choices, acting on the quality of your Business Reviews will definitely bring benefits!
And, like me, you will probably agree that the concept of Business Review has never been so modern and state-of-the-art
At POWERING and KAM WITH PASSION, we help organisations accelerate sales. A better management of the whole customer portfolio is a key element. We work with your team to enhance your Account Management System and to design, implement or improve your Key Account Management practice using our KAM Reloaded(tm) methodology. Want to know more on how we can help you? Get in touch: firstname.lastname@example.org ou email@example.com / +33 6 37 04 98 40 and +49 173 5731 586
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