There are contrasting views of global account management.
Some are still afraid of it as in this quote,
"We don't want to implement a global account management program because that will
just allow our multinational customers to get a bigger price discount from us.
It's a lot of effort for little or even negative return."
In fact there's even a joke that under global account management,
the global account manager is actually the global discount manager.
But many other companies actually have a different view.
In this second quote, "Our global account management
program is essential for the retention of
our most important multinational customers and it contributes in
a major way to growth in both revenues and profits."
And indeed this quote was given to me by the then CEO of
Hewlett-Packard which is one of the pioneers of global account management.
So the key issue then is,
how do we get the benefits rather than the cost of global account management?
To explain global account management,
let me give you a fairly comprehensive history from one
of the pioneers of this phenomenon, Hewlett-Packard.
HP started their program over 20 years ago which originally covered just sub segments of
the HP business and expanded to cover
the entire company as the needs of the customers became more sophisticated,
and HP itself became more experienced with global account management.
In 1990, Hewlett-Packard had three regional field operations for different regions;
the Americas, Asia-Pacific, and Europe.
As a result there were barriers to national sales co-ordination because performance was
based on quotas per region and there were
no incentives to pursue business outside the region.
So what triggered the change in their approach,
was that a national subsidiary unintentionally set a new world wide low price.
Here's the story that I was told by the head
of Hewlett-Packard's global account management program.
He told me that one day,
the head of a major customer,
called up the head of international sales at Hewlett-Packard and said,
"Jim, thank you very much."
Jim said, "For what?" And the customer said,
"For setting a new worldwide low price."
And the Hewlett-Packard man said, "I didn't do that."
And the customer replied, "Ah,
but your Australian subsidiary did because it just gave
a special deal to my Australian subsidiary and under the terms of a global agreement,
any price in the world that you offer becomes the new world wide low price."
So Hewlett-Packard was pretty upset about this that without the knowledge of the centre,
a distant subsidiary, had affected
the entire relationship at great cost to Hewlett-Packard.
This then triggered the initiation of
a global account management program. So this is what happened.