Sales Management Unit U606: Major Customer Relationships Report

This report delves into the principles of developing strategic relationships with major customers, emphasizing the importance of mutually beneficial partnerships. It differentiates between transactional selling and major customer management, evaluating the advantages and potential risks of the latter for both the organization and its customers. The report outlines criteria for selecting major customers based on long-term strategic value, analyzes methods for gaining buy-in from senior management, and explains the stages of major customer relationship development. It also explores behaviors that foster trust. Furthermore, the report details how to identify major customers, analyze their business strategies, and align common business objectives. It covers the development of plans and actions to address challenges and achieve mutual goals, including the coordination of business functions and evaluation of opportunities for creating long-term value. The report concludes with a focus on evaluating the success of strategic relationship activities, developing plans to address issues, and creating succession plans for maintaining successful relationships. Finally, it discusses systems for storing and planning major customer information.

Running Head: Sales Management
Unit U606-Developing strategic relationships with major customers

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Developing strategic relationships with major customers
Table of Contents
Task 1: Understand the principles of developing strategic relationships with major customers
....................................................................................................................................................3
1.1 Explain the principles of developing mutually beneficial relationships with major
customers................................................................................................................................3
1.2 Evaluate distinctions between transactional selling and major customer management...4
1.3 Evaluate advantages and dangers of major customer management to own organisation
and customer organisations....................................................................................................4
1.4 Develop criteria to use to select major customers based on strategic long term value of
customers................................................................................................................................5
1.5 Analyse methods to obtain buy-in from senior management and colleagues for major
customer management............................................................................................................5
1.6 Explain the stages of major customer relationship development.....................................6
1.7 Evaluate behaviours which build up a relationship of trust with a major customer........7
Task 2: Be able to identify major customers and develop major customer plans that are
mutually beneficial.....................................................................................................................8
2.1 Identify the customer(s) which fulfil the organisation’s criteria to be classed as a major
customer.................................................................................................................................8
2.2 Analyse the major customer’s business and their corporate business and marketing
strategy...................................................................................................................................8
2.3 Analyse the current and future strategic and operational business challenges faced by
the major customer.................................................................................................................9

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Developing strategic relationships with major customers
2.4 Identify and agree prioritised common business objectives between own organisation
and the major customer, which are consistent with both organisations’ financial objectives
and business strategies...........................................................................................................9
2.5 Assess with the major customer strategic options towards achieving the common
business objectives which involve mutual working.............................................................10
2.6 Work in partnership with the major customer to develop a plan and actions towards
addressing the identified challenges and common objectives..............................................10
Task 3: Be able to develop strategic relationships with major customers to meet mutual
objectives..................................................................................................................................12
3.1 Analyse expertise required in own team to work with the major customer...................12
3.2 Co-ordinate business functions across own organisation to develop strategic
relationships with the major customer.................................................................................12
3.3 Evaluate opportunities for creating long term value for the major customer................13
3.4 Evaluate methods for reducing risk to the major customer regarding own organisation’s
products and services...........................................................................................................13
Task 4: Be able to evaluate the success of strategic relationship activities and plan for future
activities...................................................................................................................................14
4.1 Monitor and critically evaluate the outcomes of activities in developing the strategic
relationship with the major customer, including the return on the investment being made 14
4.2 Develop a plan to address any issues regarding the outcome of strategic relationship
activities...............................................................................................................................14
4.3 Develop a succession plan for maintaining a successful relationship with the major
customer, with contingencies should particular individuals no longer be able to work with

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Developing strategic relationships with major customers
the major customer...............................................................................................................15
4.4 Evaluate systems for storing and planning major customer information.......................15
References................................................................................................................................16

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Developing strategic relationships with major customers
Task 1: Understand the principles of developing strategic
relationships with major customers
1.1 Explain the principles of developing mutually beneficial relationships
with major customers
It is very important to develop suitable strategic relationships with major customers. The
customers are the key stakeholders of every business organizations. The relationship with the
customers could be built cordially after understanding the significance of the customers and
their contributions to sales and revenues of the business. With the help of key account
management, potential customers could be served with deliverables which could satisfy their
complex needs. In this case, high sales potential could be achieved by providing the
customers with special treatments in the domain of administration, marketing, and service.
The customers should be provided with several opportunities where they could satisfy their
needs with the products and services of reasonable and affordable prices. This feature
increases the potential customers of the organizations. Complex buying behavior of the
customers is needed to be geographically dispersed so that decentralized decision-making
could be achieved. The mutually beneficial relationship gets developed on a win-win
situation where the business organizations provide the customers which products and services
at affordable prices which in turn increases the revenue and the sales and also helps in
generating high customer base for cross-selling, up-selling, partnerships, value-added
services, and joint ventures.

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Developing strategic relationships with major customers
1.2 Evaluate distinctions between transactional selling and major customer
management
Transactional selling is one of the common methods or techniques of sales where the sales
representatives develop a cordial relationship with the customers with the attempt of closing
the sale. The sales representative tries to assess the needs of the customers and then tries to
offer suitable products and services for the purpose of closing the sales (Arthur, 2019). On
the other hand, major customer management is the process of managing the interactions of
the business organizations with the potential and current customers so as to obtain an insight
into consumer behavior with the aim of modifying the business operations. Customer
Management ensures every customer is served with the needful offering in the best possible
manner (ARLEN, 2008).
1.3 Evaluate the advantages and dangers of major customer management to
own organization and customer organizations
The business organization could have several advantages of customer management to own
business and customer organizations. With the help of effective customer management, it is
quite convenient for the business organizations to understand the suitable purchasing and
procurement strategies which could be able to result in cost-effectiveness to own businesses.
In the case of corporate strategies customer management helps in developing value chain
which takes care of both upstream to customer organizations and downstream to the
customers and several channels and it also helps to understand the core value of every part of
the business operations. But there can be a major danger in selecting key accounts. In this
case, the management process could be highly expensive and low-profit customers could the
major reason behind the strategic dilemma (Asamoah, 2012).

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Developing strategic relationships with major customers
1.4 Develop criteria to use to select major customers based on strategic
long term value of customers
The suitable measures are criteria to select major customers on the basis of strategic long
term value of customers include analysis of current contract value, profits, and potential
opportunity. The analysis is needed in order to become oriented towards sales. Consumption
and order volume can be analyzed for production purpose. Product innovation is quite
important in the domain of technology. Strategies should be developed on building own
brand prestige and reputation with the help of suitable marketing strategies. In order to
enhance corporate and social responsibilities and societal responsibilities of the business
organizations, corporate sustainability and citizenship should be increased. Consolidation of
sales profits and market share in an existing market should be provided with the help of a key
account. The business organizations should develop a reputation and image with the help of
several campaigns and marketing activities. The market expansion could be enhanced by the
business organizations by developing markets or entering emerging markets. The partnership
between innovative products and techniques could be developed. The business organizations
should adopt new technologies, techniques or new products in order to select major
customers (Beard, 2014).
1.5 Analyse methods to obtain buy-in from senior management and
colleagues for major customer management
The methods to obtain buy-in from senior management and colleagues for major customer
management include both internal and external marketing process, pricing sales at a strategic
level, critical conditions for success, and knowledge management. The business organizations
should ensure cordial relationship between internal and external marketing process so as to
gain buy-in and business alignment. The external factors which influence the market are
supposed to be highlighted. The changes to some of the strategies and procurement

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Developing strategic relationships with major customers
techniques with the aim of driving customer value should be highlighted along with the
external factors. The non-financial and financial methods of success should also be portrayed.
Communications need to be increased. Internal selling should be encouraged by overcoming
several objections. The risks and benefits should be highlighted and proper mitigation
strategies should be developed to minimize such risks. The growth of the business should be
forecasted effectively. There should be ample opportunities to modify relationships and
current processes. Sales efforts of the organizations should get integrated with key accounts
programs. It is very important to develop an understanding level of senior management. The
communication between the service unit and outlying sales should be practical and clear.
Missions and objectives should have clarity. Customers should be rightly identified and
defined. It is also very important to develop compatible working relationships and
coordination between sales salespersons and sales management personnel (Mazza, 2016).
1.6 Explain the stages of major customer relationship development
The stages of major customer relationship development include pre-key account
management, early-key account management, mid key account management, partnership key
account management, and synergistic key account management. In the pre-KAM stage,
targeting and prospecting lead buying organization to get targeted. The selling organization
tries to establish communication and contact with the suitable person. It is the initial stage of
decision making. In the early-KAM, transactions are established between the buyers and the
sellers. In the mid-KAM stage, the selling organizations are considered as preferred suppliers
and it is the stage of transition. In this stage, the relationship achieves value by the help of
selling organization. In the stage of partnership-KAM, high interaction, high value, and
complexity of partnership get monitored with the support of a partnership agreement. The
aim of this stage is to improve the relationship, reduce cost, and to improve the overall
quality by exchanging and sharing important information of the business. In the last stage

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Developing strategic relationships with major customers
synergistic-KAM, the selling organizations and the customers remain aware of the fact that
the mutually beneficial relationship would not have any guarantee unless they enter into a
strategy like a joint business plan. In this stage, the process becomes more seamless and both
the buyers and sellers understand that it is advantages to develop a mutually beneficial
relationship.
1.7 Evaluate behaviors which build up a relationship of trust with a major
customer
The business organizations could develop a relationship of trust with the major customers by
establishing personal trust. It is very important to develop assurance and confidence within
the customers. The research and development operations should be able to provide technical
support and with the help of technological know-how, the productivity could be improved.
The financial burden of the key account could be reduced by providing credit facilities, loans
at low-interest rates, engaging in cooperative promotions, and countertrade so as to provide
resource support. At the service levels, reliable delivery of services with the support of just-
in-time and fast delivery, accurate quotes, computerized recorder system, and reduction of
defects could be helpful in improving the quality of the provision of service. It is also very
important to provide a free demonstration, product and delivery guarantees, proactive follow-
ups, preventive maintenance contracts, reference selling, and free or low-cost trial period.
These attempts would reduce the risk and uncertainties in the minds of the customers
regarding the products or services of the suppliers. In this way or strong relationship of Trust
could be developed with the major customers (Beard, 2014).

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Developing strategic relationships with major customers
Task 2: Be able to identify major customers and develop major
customer plans that are mutually beneficial
2.1 Identify the customer(s) which fulfill the organization's criteria to be
classed as a major customer
Depending on the ways, customers get engaged with the suppliers the major customers could
be classified. The key accounts of the major customers are those accounts held by customers
who are responsible for the maximum profitability of the organization or those who have the
potential for driving majority of the profits of the selling organizations. The major customers
are the fundamental pillars of the business success for which the organizations generate
maximum revenues and profits.
2.2 Analyse the major customer's business and its corporate business and
marketing strategy
The SOSTAC model is important in understanding the business of major customers and their
corporate business and marketing strategy. The model includes the analysis of situation,
objectives, strategy, tactics, actions, and control. In order to understand the customers, it is
very important to understand the significance of market research and the ways to add value.
Customer satisfaction level needs to be evaluated (Kulpa, 2017). The needs and demands of
the customers have to be assessed so that the marketing strategies could be developed
prudently. The process of customer’s buying decision needs to be understood. It is very
important to build suitable strategies by gathering and analyzing suitable data and
information about the organizational and individual needs of the customers.

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Developing strategic relationships with major customers
2.3 Analyse the current and future strategic and operational business
challenges faced by the major customer
The current and future strategies need to be analyzed along with the analysis of operational
business challenges which could be faced by the major customers. One of the major
challenges to the customers is non-fulfillment of the expectations of the customers. It is very
important to analyze and understand the current business of major customers. In the process
of analysis, industry-driven forces, Porter's five forces, major external environmental forces,
and various elements of competitive environment need to be analyzed. The sources of
information both formal and informal need to be identified and evaluated. With the help of
analysis of competitive rivalry, potential entrants, suppliers, buyers, and substitute, the
competitive environment can be better analyzed. The objectives of the customers need to be
understood in the right manner. The internal value chain of the customer and the sales history
of the customer also needs to be understood and analyzed. In this way, the major challenges
faced by the major customer could be analyzed with respect to current and future situations
(McFarlane, 2013).
2.4 Identify and agree prioritized common business objectives between
own organization and the major customer, which are consistent with both
organizations' financial objectives and business strategies
There are mainly four strategies of growth could be in different forms. The shared objective
and strategies between the major customer and own business are found to be quite consistent
with both business strategies and financial objectives of the organizations (Newbury, 2016).
The major growth strategies include product development, market development, related
diversification, and unrelated diversification. It is very important that there should be a shared
vision undermining and effective strategic relationship. With the help of new strategies and

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Developing strategic relationships with major customers
unofficial approach, relevant changes could be implemented and the desired success could be
achieved. The change process should be beneficial for both major customer and own
business. The goals and objectives of the organization of the major customer and that of the
seller should get aligned with each other so that business strategies and financial objectives
remain consistent.
2.5 Assess with the major customer strategic options towards achieving the
common business objectives which involve mutual working
Common business objectives involving mutual working could be achieved with the help of
property evaluation of major customer’s strategic options. The evaluation should be done on
feasibility, suitability, and acceptability. These three areas are highly important in the
strategic options of the major customer by analyzing the fund flow, break-even, and resource
deployment. With the analysis of risk, return, and stakeholder expectations, the strategic
options of the major customer could be evaluated. The suitability can be evaluated by
analyzing portfolio, lifecycle, and value system. It is also very important to analyze the
cultural and political impacts of the intended strategic options of the major customer (Surbhi,
2015).
2.6 Work in partnership with the major customer to develop a plan and
actions towards addressing the identified challenges and common
objectives
It is quite difficult to address the identified challenges and common objectives and to develop
an action plan. It can be done prudently with the help of an effective selection of business
strategies. There should be ample planning and control. The elements of the resource plan
need to be identified. The plan should address critical success factors with the help of
budgets, key tasks with the help of financial plans, and priorities with the help of manpower