Global Account Management

Increasingly, large international manufacturers of semiconductors and integrated circuits are requiring that their semiconductor equipment and materials suppliers set up "global account management teams" that specialize in selling and servicing their needs exclusively and globally. Such account teams are often headed by a high-level executive, sometimes a vice president. Companies like Intel, IBM, Motorola, NEC and Philips are spending enough money with their suppliers that they are in a position to virtually demand such response. On initial glimpse, some equipment and materials executives may see this as an unreasonable requirement from sometimes difficult customers. A closer look, however, reveals that, executed properly, there are significant advantages in such arrangement for both IC manufacturers and their vendors.

Global account management (GAM) is essentially the focusing of a supplier company's sales, marketing and service resources, through a select global team, on key customers. Such customers are deemed vital to the supplier's future because of their potential large volume purchases through an extended time. Global account management is a strategic sales/support tool that facilitates the development of an effective, long-term customer relationship or strategic partnership.

The advantages to the customer are:

• Globally expanding customers want to achieve consistency in selection and speed up qualification of equipment and materials, thereby reducing costs of support, training, inventory, etc.
• Customers want to develop purchasing leverage and drive vendors toward worldwide pricing within worldwide purchasing agreements.
• Customers wish to maximize their ability to transfer processes anywhere in the world rapidly and at a minimum cost.

While most customers will not publicly admit it, global supplier teams facilitate communication within the customer company worldwide; indeed, "peddler mail" may be faster than intra-company e-mail and possibly more effective.

There is a downside in the GAM scenario for large customers: Their insistence on dealing exclusively with global account teams may cause them to overlook new and exciting technological advances that so often flow first from smaller companies without GAM teams in place for key customers.

GAM also offers distinct advantages to supplier companies, including:

• Attainment of in-depth understanding of customer specifications, support requirements and other needs.
• Maximizing the likelihood of selling to all or most of a key customer's fabs. This is crucial because much money and time is needed to qualify a tool. These long qualification cycles emphasize the need to know the customer's present and future requirements accurately, and also provide opportunities to adjust effectively to changing customer requirements.
• Full utilization of all supplier resources without costly duplication of effort.
• Creation of leverage among a customer's fabs. Positive product performance in one fab can assist in moving toward success in other fabs of the same customer.
• Keeping professional relationships when a customer executive moves to other assignments in other fabs.
• Gaining insight on customer technology usage, corporate culture and the driving forces worldwide.

Smaller vendors are at a significant disadvantage vis-a-vis their larger competitors, even it they have the greatest "whiz bang" in the world. Through their global account management teams, larger customers can search company-wide and worldwide for their own as well as competitive performance flaws and other opportunities to meet customers' needs at the expense of competition. All of this ultimately benefits the customer.

There are some downside issues for suppliers to large global customers, including:

• The leverage of the large global customer on price, terms and support items.
• The supplier's need to learn to work in a matrix management environment. This means dealing with executive immaturity ("I want it now!"), limited discipline for setting and executing corporate priorities, and managing "turf consciousness." These factors have proven fatal to more than one corporate effort to adopt global account management.

The Strategic Selling Process

If the investment in global account management is to be made (and it is not insignificant), a number of elements must be in place. Key among them is that those salespersons who manage and participate in the global sales teams must be thoroughly grounded in the regimen and process of strategic selling. If they are not, the exercise of GAM will produce marginal results at best and be wasteful of corporate resources because GAM is "graduate level" strategic selling. Don't attempt GAM without a firmly internalized strategic selling regimen in place and working.

In a nutshell, strategic selling is a process combining all the classic selling skills with a dynamic understanding of the individual styles of key players, the forces driving customer decisions, the customer's corporate culture, the customer's strategies with its customers, and the long-term and day-to-day needs at both the corporate and fab level.

Among the benefits of strategic selling to equipment and materials suppliers are:

• Extension of strategic vision and understanding of customer goals.
• Establishment of strong business relationships.
• Establishment of technology and business feed-back loops to increase the likelihood of having the supplier's corporate technology and product road maps understood by customers, and vice versa.
• Increasing credibility among customers as a long-term player in the equipment and materials industry.

As shown below, there are sequential and iterative steps involved in strategic selling, the core of effective global account management. It must begin with internalizing the customer's strategic parameters and understanding how they mesh with the supplier's objectives.

Generally, the steps are:

• Establishing a full understanding of the customer - This includes size, success, vision of the future, corporate personality, culture and needs.
• Developing a detailed knowledge base, fab by fab, throughout the world - The team must collect information on the installed base of the supplier's products and that of key competitors to understand the supplier's competitive position.
• Developing a broad strategic plan- Building a significant position within a customer takes time, tenacity, and consistency in movement toward objectives.

With the strategic foundation in place, the action plan evolves through a series of carefully planned steps:

• Understanding the customer's organizational structure - Gaining commitment from a customer begins with the identification of true decision makers and influencers. This is an ongoing and dynamic process because customer personnel assignments change, new information is garnered, new relationships are created and the decision track is subtly modified. As contact increases, a major requirement is to analyze personal characteristics of key players. Their personality makeup creates unique decision making dynamics.
• Determining the power structure - As key customer personnel profiles evolve, potential influence relationships can be defined. From these, a power chart, rather than an organizational chart, is created, which delineates the "real" flow of decision making.
• Developing, assigning and monitoring tactical plans - This allows the team to develop individual tactics for that customer.

It is at this point that many otherwise effective plans die. If results are not monitored, targets set and the entire process reiterated, it will not succeed. Sometimes these programs are even driven from outside the company at the outset in order to establish momentum free from corporate politics. Successful global account management demands supplier management commitment, resources, and time. It is a process, not an event! For the equipment industry, the rewards for success are large, and the penalties for failure long lasting - and possibly fatal.

	‹ ‹ Charles R. Smith Leonard L. Given › ›