When the appropriate strategic position of your main corporate accounts has been identified, each should be planned accordingly. Where accounts involve several geographic or product-based business units this planning needs to be coordinated and responsibility assigned to an overall account executive, usually the senior officer responsible for servicing the central treasury. This area is often one which can create severe organizational difficulties in many banks due to their existing structures, control systems and reward systems, which lead to problems over internal transfer pricing, the location of credit for transactions booked in a business unit in which the transaction did not occur, and in meeting the needs of accounts in matters such as country limits. By and large, when such difficulties occur it is important to look at the position from the customer’s point of view. If the bank is unable to integrate its internal organization and other resources effectively this is a competitive strategic weakness and the customer will so identify it, transferring business to those banks able to provide an integrated service. This problem occurs particularly in geographically organized banks dealing with multisite or multinational clients.
The problem of country limit assessment for large multinational accounts is a common one which some banks find it difficult to resolve. Again, this can be planned when each country-based account officer identifies the account’s country limit requirements by currency as part of the annual account planning process. When the account has been identified as one where a growth, defend or penetration strategy is appropriate the planned need can be deducted from the bank’s overall country exposure position and effectively allocated to the account. The residual funds are then the responsibility of the geographic business manager charged with optimizing profitability on the free funds allocated to him. Where account demands exceed plan then additional funds need the approval of the bank credit committee, who should bear in mind the potential profit losses at the local country level versus the potential overall account profitability gain.
For each account, therefore, the account plan consists of the following:
— Objectives
— Strategy summary sheet
— Action plan description, resource needs, constraints
— Account profitability budget
— Call plan
— Consolidation plan (for multisite accounts) Account objectives
Using a form such as that shown in Figure 6.4, identify the objectives for the account both short and long term. These should indicate in quantified terms the expected service volume to be achieved, the level of resulting profitability and the market share to be obtained. In addition, a summary strategy statement should be included on how the objective will be achieved. This should identify precisely where other market units or parts of the bank will be involved in this achievement. Finally, specify the dates by when short-term and long-term objectives will be achieved. It is important that the objectives and strategy summary should be sufficiently precise for the result to be clearly and unequivocably measured and progress monitored. All too often plans are written and objectives specified in such general terms that there is virtually no way of assessing whether or not they have been achieved.
Action plans
Using a form such as that shown in Figure 6.5, set out the marketing plan for attacking the account. This form should identify the key account needs established by preliminary calling and account analysis. The needs should be specified in terms of particular service requirements and their estimated priority, the expected volume involved and the level of resulting profitability which might be achieved.
Secondly, the present competitive position should be outlined, indicating realistically the bank’s relative strengths and weaknesses compared with the entrenched competition. Where possible an attack should be directed towards a specific competitor, and an indication of what that competitor’s strategy is, why yours is superior and what reaction can be expected from such an attack should be included in the action plan.
The plan should also outline the resource needs required to service the marketing strategy. These needs should be indicated in terms of people, including existing account officer calling and any specialist or senior management requirements, any new systems or operations development, specific additional facilities and the level and type of funds required.
Finally, the plan should set out the precise services which you propose to introduce and by when. Indicate how this will be achieved and outline the call program and follow-up strategy you propose to pursue. In the event of a significant under or over achievement of your plan indicate what contingencies you have established to cope with the deviation.
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Figure 6.4Account planning form1:objectives
Market unit: Brazil
Customer name: XYZ Corpn SA Account officer: R. Constanzo Existing status: SBU prospect ^ SBU customer _ Bank customer
Marketing action plan Key account needs
— Credit services
— FX
— Cash management
— Trade finance
(Identify key account needs in terms of priority, volume, profitability)
Bank competitive position
— Strengths
— Weaknesses
— Competitor strategy
— Competitor reaction
(Identify bank’s relative strengths and weaknesses relative to entrenched com¬
petition. Where competitive displace¬
ment is expected, indicate which com¬
petitor, what that bank’s strategy is, and what reaction should be expected) Resource needs
— People
— Systems
— Facilities
— Funds
(Identify precise resource needs and dates by which they would be required)
Marketing strategy Services to introduce Mode of introduction Support services required Call programme required Follow-up strategy anticipated Contingency plans
(Identify precise services to be intro¬
duced and by when. Indicate how this will be achieved, what support services will be expected from other units within the SBU and the bank. Outline ex¬
pected call programme and follow-up strategy. Specify contingency plans) Figure 6.5 Account planning form 2: action plans
Account profitability budget
The profitability expected from the account should be budgeted using a form similar to that shown in Figure 6.6. In addition the management control system should produce a regular printout of performance against budget together with a variance report for under and over performance of more than 10 per cent. In some banks this type of system produces monthly reports while in others account printouts are prepared quarterly. Such a system provides a vital control and monitoring service which can also be used to check product, geography and industry performance as required right down to the.level of the individual account officer. As a result changes can be made in strategy and/or expected outcomes through early control system signals rather than finding
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