Good account management is never an accident. You need to have a process in place and a plan to follow if you’re hoping to hit it big with one or more of your accounts. Many plans have been suggested over decades of time, but only a few have stuck around until today. One notable example is the Miller Heiman Large Account Management Process (LAMP).
This account management process is an excellent framework for key account managers today. The core concepts have been widely debated, but are generally still applicable in today’s business world.
Who is LAMP Meant for?
Sometimes the word “large” can throw off potential companies from using this method. But, in this context a large account is not necessarily one of your biggest accounts. It refers to those accounts with the largest importance to your company rather than those with the largest size. Large size and large importance do often overlap in many B2B companies, but they may not always, so you should focus on those customer accounts that you can’t afford to lose.
Because of this distinction, LAMP can be effective for B2B companies of all sizes and in most industries. It’s not an effective method for B2C companies, because it’s focused on providing a higher level of service to specific accounts.
LAMP works well for B2B companies who are looking to gain a strong competitive edge over others in their industry. Using this method, companies can become partners with their largest accounts, limiting the risk of losing the account while simultaneously gaining a more strategic position.
What is LAMP?
Before looking too closely at how relevant LAMP is today, let’s take a look at the core concepts of LAMP and what makes it different from regular account management principles. Paul Gruhn summarized it well by breaking up LAMP into a few distinct phases and activities.
The purpose of the process is to create stronger partnerships with some of your most important accounts. This is not a process for general account management. It focuses instead on targeted accounts that may give the highest ROI for the extra resources devoted to strengthening the partnership.
This method looks to the future potential of relations with specific accounts instead of only paying attention to what has happened in the past or what currently exists. Strategic partnerships that benefit and grow each side of the table are the goal of the LAMP method. It works through this basic process:
- Segmenting customers
You can’t make a plan without having the right focus. To gain that focus, you need to know who you should be targeting. This requires customer segmentation. Instead of just segmenting based on account size or revenues, you should focus on some other quality indicators that will help you tell which accounts have more potential for growth with you than others.
Segmentation is not a simple process. It takes a lot of data gathering and information collection to have a good enough understanding of each account to make the right decisions. This should not be a gut feeling thing or a process that you just jump into. A lot of time and thought need to go into which accounts are segmented in each category. Only the accounts with the highest potential ROI should be included in your LAMP planning.
- Setting organizational goals
Many programs tell you to set quantitative goals that can be measured and assessed constantly. LAMP is more concerned with useful, qualitative goals. The goals need to be valid, recognizable, and beneficial for both parties, but they do not have to revolve around hard numbers. Goals should be the overarching guidelines for where you want to be in 1 – 3 years.
Goals are always specific to each account. It’s important that you spend the time creating goals that make the most sense for individual accounts. No goals will be applicable to every account at once, and they should not be made in a copy-paste fashion. If you don’t put effort into making useful, individual goals for each account, you’ll be ignoring the strengths and weaknesses of that account and the exact circumstances of your relationship with them.
You cannot make your goals in a vacuum. It’s not possible to ignore what your clients need in order to make goals that work best for you. You have to pay attention to making goals that are beneficial for both sides of the table. If the goals won’t benefit your accounts just as much as they benefit you, your accounts will have no reason to devote any of their resources to meeting those goals.
- Creating a strategy
You need to create strategies for how you’re going to reach each goal. Go through one account and one goal at a time, coming up with strategies for reaching the goals you’ve set on each account. Strategies are made by looking at the areas you are currently invested in, examining opportunities around you, and screening each one to find the best combination.
It’s beneficial for you to look at what you are currently doing with each account to see if you are investing properly into reaching your goals with them. Some activities you’re doing may not be the best use of your resources. To get the best returns on each account, you need to be using your resources wisely and scrapping those investments that don’t hit the mar.
Scrutinize each investment you’re currently making with your account to see which ones are leading to higher returns and which ones are either not producing well, draining too much of your resources, or could be better. Even some investments that are giving you returns may not be giving you as high of returns as you could be getting through your other investments, which makes them a less than ideal investment for your goals.
Look at opportunities in the same light. It’s best to find opportunities that are likely to give you the highest returns, instead of wasting resources on opportunities that are too risky. Don’t gamble with your accounts. Take opportunities that are promising, not those that are have too much uncertainty.
Filter your selected opportunities through different lenses to see which ones may be the best to consider. Look at things like the amount of resources needed for the opportunity to be successful, how relevant the opportunity is to your goals, how the returns compare to other opportunities, and any specific measures that matter more to you or your account.
- Moving forward with a plan
The next step is creating quantitative objectives that will help you reach your goals. Whereas goals focus on the long-term, objectives focus more on what’s happening in the short-term with each account. Objectives should be achievable within a year or less to be useful in this framework.
Throughout working on each objective, you can check your progress with milestones. Because objectives are quantitative, they can be monitored easily throughout the year to make sure you’re on track. With the completion of each objective, you should be closer to reaching the overall goal for the account.
Objectives help you to break down your goals into small, actionable parts. This makes it easier to plan for the day-to-day activities and tasks that need to be done to complete the goals.
- Get buy-in from both sides
Once you’ve formulated your goals, objectives, and milestones, it’s time to look for buy-in. You need executive buy-in from both your own organization and your account’s organization before you can move forward with the plan. Technical people also need to agree that the goals and other parts of the plan are possible, beneficial, and a good use of resources.
This step is very important, because you won’t be able to proceed without both sides of the table agreeing on the deal. You will need cooperation from both side to be able to move forward with the partnership. Don’t underestimate the importance of buy-in from your company, because your own executives can stall things up if they aren’t truly on board with the mission.
- Ninety-day review
Just because you have a great plan doesn’t mean you’re guaranteed success. Once you start the implementation, review progress after 90 days. This gives you enough time to see if things are going well or if you need to refine the plan. This is enough time to make changes before you’re too locked into something. If you make any changes, review again after 90 days.
These are the basics of the Miller Heiman Large Account Management Process (LAMP). The actual structure does offer more specific guidance in certain areas as well as more resources to help you complete each of the steps.
Is LAMP Still Relevant Today?
Although the book by Miller and Heiman that first introduced LAMP was written in 1991, the concepts lay fantastic groundwork for key account management and other account management strategies today. It may be more than 25 years old, but that doesn’t stop this method from working today in much the same way as it did in 1991 and before.
Sales and account management have not changed drastically enough for us to disregard this book. The refined edition, released in 2005, updates some of the material to reflect the realities of that time, but in general the material is still just as useful in 2018 as it was when it was first written. It may not seem as revolutionary, because we have built up a lot of different account management strategies and theories since then, but it is a highly effective way of organizing and operating large account management. To illustrate this point, Miller Heiman still teaches courses based on this material up to today.
Why Does LAMP Matter?
If you need a thorough explanation and workable information to help you become a partner to some of your top clients, rather than just another vendor, LAMP is a great starting point. It is actionable, detailed, and able to produce great results when implemented well.
Those who are already using another key account management strategy may not need LAMP as much as those who are looking to start. The framework and processes outlined in LAMP are straightforward and can be implemented in almost any B2B company.
Guidelines for Key Account Management Strategies
LAMP is in some ways the grandfather to key account management strategies. Many key account management strategies used today hold a lot of similarities to LAMP, with differences in how you implement and some of the specific steps you take. Some key account management plans emphasize different areas of planning more than others, depending on the main focus of the organization and the goal you’re trying to accomplish.
Using LAMP as a flexible framework for your organization can lead to great account management strategies and excellent outcomes. It’s not an outdated system, but a system that can still benefit you and your accounts by helping you form stronger partnerships over time.