By Shahaboddin Wahdatehagh, Sr. Director Global Account Management, Aramex
Aramex is a leading global provider of comprehensive logistics and transportation solutions, headquartered in Dubai and listed on the Dubai Financial Market. Aramex services include international and domestic express delivery, freight forwarding, integrated logistics and supply chain management, and e-commerce solutions. The company has grown into a global brand and a market-leading express delivery and logistics services provider to the Middle East and other emerging economies.
Aramex was the recipient of the 2021 SAMA Excellence Award for “Outstanding Young SAM Program.”
Responding to Market Shifts
The logistics and transportation industry has been going through big changes in recent years, thanks in part to challenges wrought by new competitors who have disrupted the industry through technology. Additionally, customers have started to explore greater independence through forward integration (a push by carriers entering the freight-forwarding business) as well as through backward integration (insourcing, in some cases, the capabilities needed to manage express and domestic deliveries).
“In response to these market shifts, Aramex decided to move from a purely product-oriented approach to a market-shaper approach through deep integration with its customers.”
To succeed, we established four objectives that went beyond technological changes to include people and processes.
- Form an organizational capability around co-creating products and solutions with our customers
- Redesign our philosophy around our customers’ needs
- Make a positive business impact on our customers’ operations
- Ingrain a deeply customer-centric vision and mission for sales.
We needed a different sales strategy and go-to-market approach with regards to strategic and global key accounts, as our existing country-focused structure could not support, let alone scale, the required new concepts.
Garnering Executive and External Support
The program was sponsored by the CEO of Aramex, who created the role of chief commercial officer to drive the required change with the support of the whole C-suite in close cooperation and partnership with the leadership of the regions. A new central commercial organization was born.
To ensure the inclusion of external insights to shape and direct the new commercial organization, we partnered with SAMA for thought leadership on Strategic Account Management (SAM), as well as with Rain Group for continuous education of our sales teams. These efforts were flanked by partnering with a solution provider for the establishment of account-based marketing principles with a focus on strategic key accounts, as well as technology partners for the implementation of a state-of-the-art CRM system.
Embarking on a Three-Tiered Change Initiative
A substantial change initiative like the introduction of a strategic key accounts program requires addressing transformation efforts involving the entire organization, the applied processes and the people affected. For this, Aramex embarked on a broad-scale commercial transformation.
Tier 1: Organizational Structure
The primary component of the SAM program was the establishment of a dedicated global organization, called Strategic Value & Impact (SV&I). Its mission is to handle defined strategic key accounts. It is set up at Aramex headquarters and is independent of the regional and product entities related to customer management, value co-creation and strategic alignment at the corporate level, while remaining interdependent on execution and service delivery.
The overall SV&I organization is subdivided into segments that reflect customer needs across four strategic industry verticals: retail and e-commerce, oil and gas, telecom, and healthcare. Segments are managed by leaders specialized in each industry.
“In a multi-phased approach, the local account management activities for the defined SV&I accounts have been transferred to the globally acting and responsible SV&I client business partners.”
We introduced the title of “client business partner” differentiating this role from the standard key account management function. These dedicated client business partners represent the customer’s perspective. They are the primary points of contact for all commercial requirements and for defining the strategy and planning for their respective customers.
The set-up and evolution of the SV&I organization was flanked by the centralization of several other commercial teams:
- Customer Service: works closely with respective client business partners and customers as multi-layered dedicated teams.
- Account-based Marketing: develops one-to-one marketing plans and one-to-few vertical-based plans and supports client business partners in better understanding the needs and trends in the client’s organization.
- Customer Experience: caters to the specific requirements of strategic key accounts by developing programs to enhance the customer’s experience and measuring customer satisfaction.
- Sales Enablement: works alongside the client business partners, the customer service group and operations teams to define the right solutions that cater to the customer’s requirements and introduce technology and innovation to the portfolio of our offering.
- Commercial Excellence: supports organizational and talent needs, develops and makes available dedicated competency models meeting the requirements of the SV&I organization.
- Consulting Services: The mandate of the process excellence team, a six-sigma black belt group, was extended and the team transformed into Aramex Consulting Services (ACS). More than a dozen key accounts have identified substantial business performance improvement opportunities through engagements by ACS.
Tier 2: Applied Processes
We also introduced a series of new processes that are currently building to maturity.
- Key Account Planning: Outlines a standardized methodology and template for key account planning, which has enabled the team to use account plans as a communication vehicle for internal and customer-facing purposes.
- Executive Sponsorship: Maps key customer stakeholders to executives and experts inside Aramex.
- Forecasting and Business Outlook: Provides forecasts and regular formal status updates to ensure visibility of the business performance and outlook to the internal stakeholders.
- Strategic Account Selection and Segmentation: Identifies and selects strategic key accounts and their onboarding into the SV&I organization.
Three additional processes are in incubation. These include value release measurement which will identify and formalize the value impact Aramex brings to its strategic key accounts and account profitability analysis. The introduction of account-based (global parent roll-up) profitability assessments (actual-based costing and planning) will enable good decision making. Finally, we initiated the introduction of a state-of-the-art, globally integrated CRM. The solution will cover all aspects of account management, from sales to contract management (including legal, insurance, operations and more) and service delivery.
Tier 3: People Development
The final building block of the SV&I program is the team members, and the changes here are fundamental.
- Role-based Competency Models: The human resources and commercial excellence teams developed role-based competency models to define the skill sets and capabilities the SV&I organization needs.
- Baselining through Self-assessments: In parallel to the development of competency models, each member of the SV&I organization completed a formal self-assessment along key dimensions of their respective roles. Structured 360o assessments are planned for the near future.
Our key performance indicators cover internal and external measures as well as “soft” factors to determine progress and success.
- Revenue: Revenue targets are developed “bottom-up,” by the account team. The goal is to outperform the industry as well as the rest of the Aramex sales organization.
- Gross profit: The goal is to improve performance year over year.
- Value co-creation: This is meant to measure positive impact on the customer’s key business metrics.
- Innovation: This measures our success in pushing the boundaries of innovation with customers who are considered leaders within their domain.
- Customer-centricity: This “soft” metric is meant to measure the degree to which our strategy and mission are outward-focused.
- SV&I brand: We want our talent to feel both that they are equipped to succeed and given the opportunity to be challenged to grow professionally. This metric measures our success attracting talent from across the Aramex organization.
Dealing with the Pandemic – Customer Validation
When the Covid-19 pandemic in 2020 caused major disruptions of global supply chains, Aramex faced the easier-said-than-done task of re-imagining the supply chain within a few weeks. This was achieved through total customer-centricity and strategic collaboration, continuous agile planning and re-planning, as well as controlled execution.
“Aramex’s strategic key customers were able to manage through these major challenges in close cooperation with their dedicated client business partners in the SV&I organization.”
Each SV&I customer has a regular cadence of business reviews at different levels of their organization, from operations to C-level. In these business reviews, the customer can raise concerns or provide praise.
The high level of alignment achieved through the regular business reviews and the team’s focus and dedication to serving the SV&I customers helped customers mitigate pandemic-related risks and enabled them to achieve their revised objectives. SV&I customers consistently praised the program for delivering exceptional value.
Additionally, a good number of the strategic key accounts have already taken advantage of the specialized ACS team. These engagements have uncovered diverse opportunities for improving the critical business performance objectives of the customers, ranging from cost savings through supply-chain network redesign, improved time-to-customer service levels and more effective and flexible logistics capabilities by moving to third- and fourth-party solutions offered by Aramex. Each of these engagements has led to excellent feedback from customers.
Finally, Aramex utilizes the services of a third party to conduct independent interviews and surveys with stakeholders and executives within strategic key accounts. The responses and level of satisfaction of the customers conveyed through this independent party is further testimony to the effectiveness of the SV&I program as seen by the customers.
Profitability During the Pandemic
Profitability during the pandemic was impressive.
“In 2019 the strategic key accounts program recorded more than 30 percent revenue growth over the previous year, surpassing the overall average revenue growth of the rest of Aramex. Additionally, the company experienced above average growth of gross profit from strategic key accounts.”
- In the first three quarters of 2020, the SV&I group effectively maneuvered the pitfalls of the pandemic, showing a high degree of agility in adjusting capacity and capability to each customer’s requirements. This allowed us to keep pace with the extreme logistics and distribution requirements driven by the skyrocketing e-commerce growth of our strategic key accounts in the consumer and retail verticals.
- Aramex expanded its wallet share across some of the major regional players by two-to-five times year-on-year and was able to not only remain profitable but also beat market expectations.
- During the last seven quarters (FY 2019 and the first three quarters of 2020), the dedicated focus of the client business partners has led to the further solidification of business fundamentals with the SV&I accounts. This reflected itself in the win of previously non-existent market share across countries, expanding the penetration in about 35 percent of the strategic key accounts. Furthermore, this is reflected in an increase in the number of SV&I customers using the full suite of Aramex products, from 62 percent to 79 percent.
Our Learnings and Advice
Within Aramex, the common feelings – suspicion and anxiety, to name two – that can result from change, especially during times of crisis like the pandemic, subside once individuals see the value and impact a strategic key account program can bring to the company and its customers. Measurable results are the best removers of such concerns.
Our strategic key accounts appreciate the SV&I organization. Customers who are in search of a true strategic partnership see it as a game changer. But there have, of course, been growing pains. The shift from local decision making and the practice of “cutting curves” to a globally coordinated and controlled approach requires substantial discipline and adherence to best practices. This is even more challenging when the new framework of action has to be followed mostly by those who are used to a more freestyle way of working.
- Clarity on expectations is fundamental, and new procedures must be simple, functional and controllable. At the same time patience combined with a learning attitude that accepts some degree of failure is pivotal to sustain a positive environment within the organization.
- Communication is critical. Change is challenging both internally and externally. Some customers are concerned about losing the “local touch” when a centralized model is deployed. This is best countered by continuous communication among the stakeholders within the enterprise and the customer about plans, actions and business performance.
- The value of the experience of other companies who have already implemented such programs should not be underestimated. Being part of a community like SAMA, to learn about best practices, is essential. However, the most successful programs are customized to the needs of the organization they were designed for. We have not come across a program that can be copied as is to our organization.
- Strategic account management has broad impact and cannot be an initiative for the commercial organization alone. It needs to be owned by the commercial organization but sponsored by the CEO, and it needs to involve the entire organization, including products, regions, operations, finance, HR, digital, and even legal and compliance.
The three most important pieces of advice I would offer anyone embarking on or fine tuning a strategic key account management program are:
1. When choosing strategic accounts, size should not be the exclusive criteria. The customer’s perspective of your relationship must be considered. Not every large, multinational customer wants to enter into a strategic partnership. By the same token, many smaller and mid-sized customers may be ready to partner and take the relationship to a strategic level.
2. Internal change is a must. A strategic key account program cannot be introduced without substantial internal change in the organizational structure, applied processes and contributors’ day-to-day actions. And change requires the willingness of all involved, which can mean changing out stakeholders and individual contributors where needed.
3. It is a journey, and every journey requires a clear vision combined with patience and sustenance to succeed. Quick gains and low-hanging fruit are fundamental in demonstrating the feasibility and profitability of such a journey. Stamina and patience are needed to work through and overcome the many challenges along the way. Leadership, a clear vision and a well-articulated “why” should be the guiding star on the journey.
We hope you come away with some learnings. How will you make changes in your SAM program?
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