7 Account Management Best Practices That Will Make a Difference
Account Management is a proven, sophisticated tactic to work differently with customers.
Account Management has been around ‘forever’ in many industries but remains relatively new in pharma. Perhaps because, historically, pharma has focused its marketing and sales efforts on individual physicians.
Of course, times have changed, and account management is being taken up but pharma is still in the learning phase of implementation and it remains a relatively small part of the business with a relatively small number of folks, full time, engaged in account management. Perhaps also the tactic is devoted to hospitals, or in the US, payer groups and integrated health systems, or large group practices. However, it is an approach that can, and perhaps should be adopted right across all customer types dependent only upon the suitability of the approach to customer needs.
In my work with numerous pharma clients, I have noticed the differences between what account management could be and how it is actually implemented, and based on this experience here is a list of seven best practices, in three distinct buckets, that are often missing from an implementation plan.
1. Customer Identification
a. Not all accounts are equal – new approaches to identifying which customers to focus on
b. Develop unique small set of key accounts
c. Refusing to work with a customer
2. Implementation
a. Co-creating an Account Plan and agreeing it with the customer
b. The Account Plan takes precedence over brand plans
3. Measure and Reward
a. The Account becomes the unit of measure
b. Use Customer Account Plan as basis for end of year personal performance reviews
Customer Identification
The term in general use across pharma, is Key Account Management, although technically that is not a good description of the tactic currently in use. Most companies confuse Key Accounts with other less important accounts, and typically offer a very similar service across all managed accounts.
Many industries are much more sophisticated in this regard. IBM, for example, does account management really well. Their account managers are customer experts and typically know more about what is going on with their accounts than many of the client’s employees. But, they have a very clear picture of who their Key Accounts are, and it is a very small number. They have recognized their Global Key Accounts, those accounts that they really need to win, keep and grow and they dedicate significant resources to these accounts. The number is very small indeed.
The second tier accounts are managed very differently from these Key Accounts but still using account management fundamentals.
Has pharma identified Key Accounts and do they interact differently with these accounts than others?
How to identify accounts is an important issue, typically the size – read revenue generated or potential future revenue, has been the most important criteria but really effective account management should consider more than revenue above all else.
In my experience, there are at least five key criteria that should be used when identifying accounts and of course revenue is one of them.
1. Their level of innovation readiness and patient orientation.
2. Technological savvy and their ability and readiness to implement solutions that may be outside their traditional comfort zone.
3. Their ambitions and objectives, are they aligned with your own?
4. Their level of comfort working with pharma and their openness to partnership with the industry.
5. Their value to the business in terms of current and future revenue potential and/or their level of leadership in healthcare.
These various attributes should be weighted to produce a score that would indicate the most relevant and important customers to focus key account management activity with. It will also highlight those organizations that pharma should work with in an account management approach and those customer where they should not.
Identifying the right accounts is critical if account management is to generate the sorts of results pharma is expecting. If you and the customer are not aligned, it is much better to defer working with them in this way. Pharma is typically reluctant to say ‘no’ to any customer, but in this area in particular, refusing to work with an account and to dedicate significant resources to this customer can be a powerfully positive message.
Implementation
One of the issues with marketers everywhere, in every industry but particularly in pharma, is that they typically want more. More messages, more details, more impacts, more value, more new customers, more promotional materials, more conference attendees, more followers. I think you get the picture.
In account management terms, the account manager needs to actively manage the brand teams to avoid overloading customers, and for that they need the political power to override the marketing folks.
In pharma, this is particularly relevant and it is usually exactly the opposite of what customers want. And important as that may be, less can actually be better for business.
In account management terms, the account manager needs to actively manage the brand teams to avoid overloading customers, and for that they need the political power to override the marketing folks. Not an easy ask in pharma even today.
That is where a great Customer Account Plan really delivers value to both company and customer. If the Plan is used as a roadmap for the company to engage with this customer then making these types of difficult trade offs becomes much easier. And the marketers need to work even harder and smarter to deliver more value to customers in line with the agreed Plan.
I have written before about these Customer Plans so I won’t repeat myself again other than to say these are not your typical account plans used by most companies. These are developed in collaboration with the customer, which is a pretty common approach, but these Plans are shared openly with customers and details what both parties will work on together over the coming 12 months.
The objectives and outcomes of the Plan are obvious to both parties as is how together success will be measured. Complete transparency is required.
They can significantly change a pharma company’s relationship with its client.
Measure & Reward
If it really is about Account Management then the Account Plan forms the basis for both measurement of success and for rewarding the account team. That means sales by brand will probably not feature as a key objective. It may well be included if indeed that is an objective that both parties agree to upfront and could well be the result of some improvement to processes or technology that, in turn, leads to better patient outcomes and increased product sales.
It is absolutely critical that the account team is rewarded according to the execution of the Customer Plan. 100%.
It is easy to implement an account management approach without really changing much. Build an account team to work with the senior management of a group practice or hospital, all the while the brand teams continue to send in teams of representatives to talk about the brands to individual HCPs. Try and develop value added offerings to the customer and continue to deliver brand messages.
These are the most common approaches seen in big pharma today, still. But if you want to really deliver value to customers and get the most out of a new approach to customers then significant change is required.
Account Management is a proven, sophisticated tactic to work differently with customers. It benefits both parties equally. If it is all about selling more stuff then it is not really account management rather just another sales tactic. Time to choose!