August 20, 2024 2 minute read
Richard Wright
Managing Director at ASPIRE Account Management
BALANCED SCORECARD
The Balanced Scorecard is a performance management tool which will enable you to assess how well the Account Management process is working. It provides for the 'measurement' of several key areas, most of which are not financial.
This is particularly important as Company Boards invariably make decisions based on financial information. However, the Balanced Scorecard enables some very significant areas to be monitored which are outside the remit of Boards.
Conversely, it also provides for the measurement of areas which do fall under Board/Senior Management control and therefore enables you to be 'on top of your game' at all times; which is good for your Client, your Company, your colleagues and you personally!
This article explains what the Balanced Scorecard is as well providing a simplified example of how it can be used (which can be implemented in any small business enterprise).
There are 5 Categories to monitor, score and act upon:
Management
Financial
People
Client
Sales
Each Category has a number of Key Performance Indicators (KPIs) which, for initial ease of use, are marked either '1' for 'Yes' or '0' for 'No'. The overall Category score can then be expressed as a %. Then, the overall/combined % score can be determined for all Categories.
However, you may wish to develop a more sophisticated method of scoring once you have become familiar with this key area of Account Management and make any required modifications in the light of your experience. In its current form, some of the answers will inevitably be subjective.
It should be noted that every Level 1 KPI is a crucial indicator and must be regarded as mandatory.
Balanced Scorecards for individual Client Accounts should be reviewed and updated on a monthly basis.
A sample of KPI questions is given below.
Essential cross references to other key-related areas of Account Management are also given to ensure watertight coverage of the Client.
LEVEL 1 - Mandatory
All 20 Level 1 KPIs are considered crucial for effective Account Management to be achieved.
A. Management
Delays & Overruns managed to Client’s satisfaction?
Account Manager’s performance & qualities reviewed?
Each KPI: 1 for YES, 0 for NO
Total KPI Score must be 8 out of 8 otherwise Category/Account requires immediate attention. Each 'NO' requires the Account Manager to provide an explanatory paragraph with details of the next action, who & when.
B. Financial
Profit margin (%) increasing?
No debts older than 60 days?
Total KPI Score must be 4 out of 4 otherwise see Category A for actions
C. People
All colleagues' personal objectives geared to the Golden Rules?
Sickness less than 5%?
Total KPI Score must be 3 out of 3 otherwise see Category A for actions
D. Client
Issues/complaints resolved satisfactorily?
Relationship good?
Total KPI Score must be 2 out of 2 otherwise see Category A for actions
E. Sales
Sales opportunity pipeline rigorously qualified & improving?
Lost orders reviewed?
Total KPI Score must be 3 out 3 otherwise see Category A for actions
LEVEL 2 - Highly Recommended
All 15 Level 2 KPIs are considered highly desirable but not crucial. If monitored, there is no doubt that your Client, Company, colleagues and you (the Account Manager?) will benefit significantly.
AA. Management
Value Added provided (freebies, technology updates, talks/presentations/seminars/training/etc)
BB. Financial
Next Month’s Revenue forecast higher than last month’s ‘actual’ Revenue?
CC. People
Each colleague working on Client Account scores 'positive' for team spirit/morale/teamwork, extra miles, Client knowledge, Supplier knowledge?
DD. Client
Client Satisfaction Survey in last 12 months?
EE. Sales
Value of new business/orders year-to-date greater than same time last year?
The initial scoring of 1 for YES or 0 for NO for each KPI (as done for Level 1) will quickly reveal whether further action is required in any of these 15 additional key areas of Account Management. Overall absolute and percentage scores can then be calculated for submission to senior management if required.
Over time, graphs should be used to monitor performance trends.
Essential Module Cross Reference
CLICK HERE FOR COMPLETE LIST OF ALL CHECKS & TIPS
BEST PRACTICE QUOTE 9 OF 12
“the balanced scorecard is the only tool which enables you to establish exactly where you are and what needs to change in order to stay on course”
Another 20+ components of account management can be found at ASPIRE Account Management together with over 300 free checks & tips - all of which aim to significantly improve supplier performance and block the competition.
NEXT POST: Client Account Performance Reviews
Account Management Blogs - the full set:
Introduction to Account Management
Understanding Your Clients
Supplier Values, Ethos & Image
The Account Manager
Client Relationship Management
Client Contact Management
Sales Propositions & Opportunities
Sales Opportunity Qualification
Balanced Scorecard (‘today’)
Client Account Performance Reviews
Client Satisfaction Surveys
Risk Management
As these blogs will be geared to anyone engaged in developing new business with clients or prospects, and for ease of context, I’ll regard all readers as account managers as everyone has the same endgame, no offence!
I really hope you, your colleagues & business associates find value in these blogs; please let me know either way. Please also get in touch if you think there might be potential for our businesses to collaborate.
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