AC 4.5 Strategies for Supplier Status

The provided assignment content is about the ERM Business Energy Company, which aims to develop and research potential accounts for its business energy services. The company has a strong online support system software through Picnet, provides insurance for its products, and maintains clear contracts with its employees. To enhance customer satisfaction, the company uses tactics such as inviting managerial assistants to official conferences, training employees, and sharing work information and success stories with customers. Furthermore, the company employs the ASIM model to maintain customer accounts based on trust and loyalty, and conducts a portfolio analysis of its customers using the SAM model.

Running head: Understanding And Developing Customer Accounts
UNDERSTANDING AND DEVELOPING CUSTOMER
ACCOUNTS

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Understanding And Developing Customer Accounts
Table of contents
LO 1 Understanding buying practice...............................................................................................3
AC 1.1 Explanation of the organizational and professionalunits influence the organizational
decision-making unit.......................................................................................................................3
AC 1.2 Explanation of the customer’s choice criteria and its effect on the sale.............................4
AC 1.3 Preferred supplier status verification..................................................................................4
AC 1.4 Explanation of the buying practices of the organization.....................................................6
AC 1.5 Explanation of the measurement of the quality through assigned programs......................6
AC 1.6 Explanation of the capability and capacity assessment of the customers...........................7
LO 2 Customer support...................................................................................................................7
AC 2.1 Explanation on the service development.............................................................................7
AC 2.2 Explanation of the benefits of technological support for the customers.............................8
AC 2.3 Explanation of the competitive practice of decision-making process.................................8
LO 3 Unique business value............................................................................................................9
AC 3.1 Explanation of the action plans with respect to customer relation......................................9
AC 3.2 Explanation of the organizational buying ability to respond to customer........................10
LO 4 Customer procurement.........................................................................................................11
AC 4.1 Updating knowledge of customer industry trend..............................................................11

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Understanding And Developing Customer Accounts
AC 4.2 Evaluation of criteria to select customers.........................................................................12
AC 4.3 Research into attractiveness and compatibility.................................................................12
AC 4.4 Identification of the company strength and weakness......................................................13
AC 4.5 Strategies for supplier status.............................................................................................14
AC 4.6 Comparing contracts.........................................................................................................15
AC 4.7 Contract of agreement with a contractual employee.........................................................15
LO5 Planning and developing customer needs.............................................................................16
AC 5.1 Identifying tactics..............................................................................................................16
AC 5.2 Evaluating importance of ongoing customer evaluation procedure..................................16
C 5.3 Evaluating own current customer accounts.........................................................................17
AC 5.4 Planning and developing current and new accounts.........................................................18
Reference list.................................................................................................................................20

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Understanding And Developing Customer Accounts
LO 1 Understanding buying practice
AC 1.1 Explanation of the organizational and professional units influence the
organizational decision-making unit
The decision-making unit (DMU) of ERM business energy contains various positions and
the first position in the DMU is acquired by the initiator. The initiators of an organization are
often the project manager of the company who proposes the project to the administration of the
company. The initiator initiates the job role of the company and thus they propose the
organization the products and services they require for starting the job (Christopher, 2016).
After the initiation of the project idea the next position in the DMU is acquired by the
influencer that is the project development manager of the company. The cooperation of the
project development manager helps to accelerate the project. This section of the DMU is referred
as the technical buyers or evaluators. The main functions of the technical buyer are assessing the
market, and monitoring the activities of the suppliers and the buyers (Lovelock & Patterson,
2015). After the assessment, the influencers try to execute the project within the market.
According to the size of the organization the roles and responsibilities of the influencers changes.
They act as full-time buyers in case of large organizations. Thus the basic requirements in
becoming a project development manager are they need to have enhanced knowledge of
production, tendering and market negotiation (Anagol, Cole & Sarkar, 2017).

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Understanding And Developing Customer Accounts
The influencers initiate the project after taking it from the initiators and then they hand
over the project to the decision-making sector or simply to the deciders. The decider takes the
final decision about the project implementation. Due to this reason, the deciders are also termed
as the economic buyers. This section of the DMU decides the implementation of the project
without taking consent from others. The CEO of the companies can be termed as the decider of
the company (Aryee et al. 2016).
AC 1.2 Explanation of the customer’s choice criteria and its effect on the sale
The key motivators for the CEO of an organization can be divided into two parts such as
the emotional motivator and the economic motivator. The emotional motivators for the CEO can
be the prestige factor of the company, the personal risk mitigation factors, the politics of the
organization and many other things. On the other hand, the economic factor that motivates the
CEO the price of the products of the company, delivery of the products of the company,
reliability of the company products and many other things. The durability of the products also
motivates the CEO of the company (Jamali, Lund-Thomsen & Jeppesen, 2017).
AC 1.3 Preferred supplier status verification
CAF Factors Weight UTE computer
Less bargaining factor 10 6
Profit margin 10 8
Ongoing purchasing 10 5

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Understanding And Developing Customer Accounts
Growth 10 7
Market attainable 10 7
Share in the market 10 6
Total 60 39
Average = 39/6= 6.5
RSF Factors Weight Picnet
Solvency 10 5
Break-even point 10 7
Cash flow 10 6
Profitability 10 7
Skill level 10 8
Revenue growth 10 7
Total 60 40
Average = 40/6=6.67
Thus from the CAF and the RSF matrix, this account can be categorized as a Major
account (Korschun, Bhattacharya & Swain, 2014).

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Understanding And Developing Customer Accounts
AC 1.4 Explanation of the buying practices of the organization
The method of buying in the ERM business energy is helping the business to become
more enhanced. The buying practices in the organization are executed by the following methods.
In order to reduce the stock holding system of the company, the ERM company uses the just in
time method of purchasing. This method helps the company to organize the products of the
company and hence the assessment of the products becomes easier for the company. The
company also follows the centralized purchasing method through which it becomes enabling to
concentrate all the company energy and decides the energies into small groups (Kumar &
Reinartz, 2016). The systems purchasing of the company helps it to know the customers’
demands and thereby it gains the number of customers.
On the other hand, the ERM Company also uses leasing method for purchasing that
enables the company to purchase more products by taking a lease from financial organizations.
The reverse marketing of the company assists the company to become more productive and thus
the revenue also gets increased. The leasing method of purchasing is also cooperating with the
ERM company maintain their finance and besides that, it is also helping the company in avoiding
the cost of the product maintenance (Mullins et al. 2014).
AC 1.5 Explanation of the measurement of the quality through assigned programs
The company recently purchased an Internet security system to protect their data theft
and thereby they want to prevent the unethical access to their devices. During the purchase of the
product, the company examined the features and the uniqueness of the products from the other
market available products. In order to verify the usefulness of the product ERM attended their
quality program and thus is focused on the sales process of the company. After that ERM

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Understanding And Developing Customer Accounts
Company, it organized a program based on the product quality assessment and tried to analyze
the effectiveness of their products (Wang, Kung & Byrd, 2018). Thus it can be recommended for
the product quality enhancement the company needs to verify the key skills of other companies
those are working on the same ground.
AC 1.6 Explanation of the capability and capacity assessment of the customers
The assessment of the capability and the capacity of the potential of ERM are needed to
be conducted since it will help the company to become financially more stabilized. In addition to
this, the assessment is also helpful in increasing the service quality of the company, the delivery
procedures can be judged through this assessment. Besides that, it enables the company to
understand the responsibility of the company for the environment safety (Zhang et al. 2016). The
assessment will also help the company to develop the skills of their employees in a progressive
manner. Besides that, it will help in understanding the corporate social responsibility of the
company for the society.
LO 2 Customer support
AC 2.1 Explanation on the service development
The ERM business Energy Company provides their clients enhanced services regarding
the energy management and software development. Thus for providing better service to the
customers, the company monitors the market and thereby it collects feedbacks from the clients.
In order to provide satisfying services to the clients, this company collects the survey reports and
then analyzes them. After the analysis, it shots for the efficient works inside the company to do
this work. Then the company after choosing the perfect employee for the work hears the

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Understanding And Developing Customer Accounts
customers’ demand carefully regarding the services (ERM business energy, 2017). After that,
the company tries to provide reliable service to the customer.
AC 2.2 Explanation of the benefits of technological support for the customers
In order to provide the customers satisfying service, the ERM company uses following
technique for the enhancement of their services. The company focuses on the response time of
the customers and after that, they try to provide best quality service on the basis of the customers
need. The technical support of the ERM Company is also benefiting the customers using its cost-
saving and budgetary method. In addition to this, the technical support is also reducing the labor
cost for the company and that is also another positive impact for the company (Picnet, 2017).
Besides that, the technical assessment of the company is assisting the company in order to create
improved services for the clients of the company.
AC 2.3 Explanation of the competitive practice of decision-making process
Factor IT solution of ERM IT solution of Picnet
Cost Low costing Low costing
Speed Better than other companies Less than ERM but better
than other companies
Service High quality High quality
Supplies Less than Picnet Better than ERM
Support Technical support Technical support

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Understanding And Developing Customer Accounts
Functions Energy management and IT
solution
Providing IT solution
LO 3 Unique business value
AC 3.1 Explanation of the action plans with respect to customer relation
Specific Measurable Attainable Realistic Time-bound
To improve the
energy
management
technique of the
ERM business
energy
This can be
measured by
measuring the
number of
projects
achieved by the
company
This can be
achieved by
regular
monitoring the
projects activity
The feedbacks of
the customers
will help in
focusing the
actual demand of
the clients
This needs to be
done within two
months
Aim Poor Acceptable Good Excellent
Informed of
developments
Yes

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Understanding And Developing Customer Accounts
Visited by sales
regularly
Yes
Service has
given within one
hour
Yes
Orders sent
within 24 hours
Yes
Good social
activity
Yes
AC 3.2 Explanation of the organizational buying ability to respond to customer
Aim Poor Acceptable Good Excellent
Call answered
within 3 rings
Yes
Sales staff
friendly
Yes
Sales staff know
products
Yes

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Understanding And Developing Customer Accounts
Sales staff know
competitors
Yes
All conditions
explained
Yes
Product shipped
in time promised
Yes
Thus from the above table, it can be stated that the table is reflecting the customer satisfaction
about the company.
Pros: The following table is showing the customers are very happy with the company's condition
explanation scheme and shipping thus this is creating the competitive advantage for the company
(Christopher, 2016).
Cons: The calls response service of the company is moderate thus it can become a lagging factor
for the company if they do not improve their response system early.
LO 4 Customer procurement
AC 4.1 Updating knowledge of customer industry trend
● Subscribing to trade journals will help in keeping updates about the industry trends and
demands of the customers
● Reading magazines highlighting the customers is also beneficial
● Attending conference and forums may help in getting enlightened about the customer
industry trends

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Understanding And Developing Customer Accounts
AC 4.2 Evaluation of criteria to select customers
Factor ERM business energy product/service Lumo energy
product/service
Price £470 per unit £550 per unit
Delivery time Ex stock / same day 3-5 days
Set up included Yes No
Training
included
Yes for two employees Yes for only one
employee
Remove old
machines
No No
Supplies included Energy supply with cables No cables supplied
Helpdesk support Yes 7:00 am to 10:00 pm Yes 9.30am to
4.00pm
AC 4.3 Research into attractiveness and compatibility
CAF Factors Weight Allied computers
volume 10 8

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Understanding And Developing Customer Accounts
Profit 10 9
Financial stability 10 8
Openness 10 7
High adaptability 10 6
Prestige 10 5
Total 60 43
Average score= 43/7=6.14
AC 4.4 Identification of the company strength and weakness
RSF Factors Weight Unitech
computers
Global tech
Solvency 10 5 6
Break-even
point
10 7 8
Cash flow 10 6 4
Profitability 10 9 8
Skill level 10 6 5

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Understanding And Developing Customer Accounts
Revenue growth 10 7 8
Total 60 40 39
Average score of the ERM business energy=6.67
Average score of the competitor= 6.5
Thus based on the CAF and the RSF score it can be analyzed that the customers can be placed in
the DA slot as these accounts are potential accounts for developing and research is needed (ERM
business energy, 2017).
AC 4.5 Strategies for supplier status
Factor Can provide Cannot provide How might provide
An Effective online
support system
software
The supplier Picnet
can provide this by
providing easy to
use software
interface which
works fast
Attractive interface They might provide
software interface
which is easy to use
by the customers
and opens factor in
any browser
Using the lobbying method to grow business with a sales organization can be used by using an
organization which is currently not happy with its buyer and then it can come into a negotiation
with another buyer.

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Understanding And Developing Customer Accounts
AC 4.6 Comparing contracts
On comparison of the contract with a competitor, it was found that they do not provide insurance
of the product as per the contract. However, the ERM business energy provides the insurance of
the products provided (Lovelock & Patterson, 2015).
AC 4.7 Contract of agreement with a contractual employee
The contract is maintaining the liabilities of the company and is phrased as per the contractual
terms. This contract can be approached in terms of the limitations of the employee rather than the
liabilities of the company. It was reviewed three years back on 15th November 2015. It is valid
for one more year. The contract is clear and concise and each if the contract terms and definitions
are clear and are not vaguely defined (Anagol, Cole & Sarkar, 2017). The liabilities of each party
and the penalty for the breach of duty are also defined in the contract. The company has fewer
suppliers thus there is no specific contract with the suppliers.

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Understanding And Developing Customer Accounts
LO5 Planning and developing customer needs
AC 5.1 Identifying tactics
The main tactics that can be used to enhance the prospect of project with UTE computer are-
Managerial assistants of the UTE computer will be invited to the official conference to witness
the working of the company
They will be allowed to observe the training of the employees to gain confidence in the company
 They will be invited to exhibitions and dinners to make them feel important
 Enabling the managerial assistant to observe the customer feedback
 Inviting the board of directors to exhibitions and company product launches
 Getting into negotiations by giving rebates to attract the customers
 Sharing work information and success stories with the customers to avail the project
AC 5.2 Evaluating importance of ongoing customer evaluation procedure
Customer feedback is essential in case of ERM business Energy Company as it caters to the
needs of the energy needs of the customers. Thus in order to obtain information regarding the
customer service two types of information such as quantitative and qualitative information is
needed. For obtaining the current customer feedback in case of performance of a new product the
survey of the customer's needs to be conducted to know their current satisfaction level.
Information regarding the improvements in the online ordering system can be obtained by
acquiring knowledge about recommendations and demands of the customer which can be
obtained by interviewing the customers and asking them their needs.

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Understanding And Developing Customer Accounts
C 5.3 Evaluating own current customer accounts
Please comment on: Very
satisfie
d
Satisfie
d
Somewhat
satisfied
Dissatisfied
Are you satisfied with our customer
service regarding the handling of
accounts?
Are you satisfied with the working of
the current sales manager?
Do you think our accounting system
involving ASIM is effective?
Are you happy with the products and
services that we provide?
Are you satisfied with our after sales
servicing and our service plans?

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Understanding And Developing Customer Accounts
AC 5.4 Planning and developing current and new accounts
The AISM model is effective due to its three different stages which enable the maintenance of
the customer accounts based on the trust and loyalty and allows the merging of the long-term
business strategy of the organization with that of the customers.
This method is effective as it allows the business to choose the most effective customer with
potential for growth.
Apart from the ASIM model, there is the SAM (Strategic Account Management) model which
allows conducting an effective portfolio analysis of the customers.
SWOT of SAM
Strength
● Retaining the existing client
● Proper augmentation of the revenue to achieve ultimate client satisfaction
Weakness
Inefficient management of account by the personnel can lead to lack of growth of customer
account
Opportunities
Chances of investment and merging by other companies due to excelling in account holding due
to usage of SAM
Threats
Involving only the account managers in usi9ng the SAM can lead to lack of knowledge and
training among the normal staffs.

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Understanding And Developing Customer Accounts
Thus in order to develop new accounts training of all the staffs regarding the application of
ASIM and SAM will be taken into account. In addition, if any company comes for merging then
they will be welcomed for merging with the company.