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Table of Contents

1. Market Forecast
2. Key Target Customers
3. Product Strategy
4. Strategic Partnerships
5. Channel Strategy
6. Brand Strategy
7. Organization

5-1
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Summary

 CKAD currently has a sophisticated distribution channels structure consisting of a mix of direct and
indirect channels. International benchmarking across 13 leading operators in Europe and the US show
that CKAD covers all relevant channels. Employees in Type A, B, and C companies, who currently
make their own telecommunications purchasing decisions, are satisfied with ZMCC’s channel
coverage and service. However, as purchasing is shifting form employees to enterprise decision
makers, CKAD needs to considerably strengthen the KAM function
 Given the importance of the Key Account Managers to CKAD’s business, A.T. Kearney has conducted
a diagnostics of current CKAD Key Account Management (KAM) and the results reveal major
challenges across all areas. The result shows that CKAD’s Key Account Management is facing a
number of challenges across key areas, including unclear roles & responsibilities, large differences in
Key Account Manager productivity, lack of alignment between market opportunity and sales force
coverage, no consistent and effective set of KPIs and lack of training in key areas
 To meet these challenges, CKAD needs to launch five important initiatives:

1. Clarify KAM Roles & Responsibilities. CKAD should establish a clear and uniform set of KAM
positions and responsibilities across subsidiaries
2. Expand Salesforce & Reduce Low Value Activities. CKAD should expand the CKAD sales
force from 681 to 784 Key Account Managers to align with market opportunities. This will include
large expansion in important cities such as Ningbo, Wenzhou and Hangzhou. Reduce the time
spent on low value activities such as travel, administrating subscriptions, simcards and handset
repairs – realizing savings of 8-12 hours per work week

5-2
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Summary (continued)

3. Design & Roll Out Uniform KPI System Linked to Compensation. CKAD should evaluate Key
Account Managers on five performance indicators – sales to existing customers, sales to new
customers, churn out, customer satisfaction and share of new products. Set stretch performance
targets for KPIs to maximize sales force performance. Establish a clear link between performance and
bonus pay-out
4. Re-focus Training & Leverage E-Learning. The ZMCC Training Center should focus training of
Key Account Managers on customer needs (both enterprise and employees), CKAD new products &
services, sales & marketing and negotiation skills and develop basic and specialized programs that
meets these training needs. The ZMCC Training Center should leverage E-learning programs to save
cost, increase roll-out speed and user flexibility
5. Improve Information Quality & Access. CKAD should improve the comprehensiveness and
accessibility of information that Key Account Managers need in the sales process

5-3
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CKAD currently has a sophisticated distribution channels structure consisting of a mix of

direct and indirect channels

• Currently the major channel of CKAD

KAM • Provides both group plan & enterprise
solution sales and service

Direct

• ZMCC shops used for sales of CKAD

products & services
Own Stores
• Mainly focus on group plan/VPMN, but
also for enterprise solutions

Partners • Independent companies, such as System

(System Integrators, Integrators, Equipment Provider (PBX
Indirect dealer) and other agents partnered with
Equipment Providers,
etc.) CKAD to promote, sell, and enable
CKAD products

5-4
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International benchmarking across 13 leading operators in Europe and the US show that
CKAD covers all relevant channels
Western Europe - Channels for Wireless Business Customers
Direct Business Sales Indirect Business Sales Channels
Channels
OEM/ Tele-
IT Other
Customer coms/
Own Tele- System IT Retailers Direct
Premises Telecoms Consu-
(Bus.) sales/ Integra- Distri- (e.g. car Marke-
KAM Equip- Service mer
Shops Inter- tors/ butors & radio, ting
ment Providers Electro-
net IT System Retailers photo Agencies
Manufac- nics
Houses special.)
turers Retailers

CKAD       

T-Mobile
Germany       

Vodafone
Germany        

E-Plus
Germany        

O2
Germany  ()    

• Sales representatives, Telesales and Internet are not established sales channels for business customers in Germany
• O2 was the first operator in Germany to position for the mobile data business, acquiring IT system integrators, IT system houses
as well as IT distributors and retailers as indirect sales partners – with other operators to follow
Source: A.T. Kearney Global Survey, January 5-5
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International benchmarking across 13 leading operators in Europe and the US show that
CKAD covers all relevant channels (continued)

Western Europe - Channels for Wireless Business Customers

Direct Business Sales
Indirect Business Sales Channels
Channels
OEM/ Tele-
IT Other
Customer coms/
Tele- System IT Retailers Direct
Own Premises Telecoms Consu-
sales/ Integra- Distri- (e.g. car Marke-
KAM (Bus.) Equip- Service mer
Inter- tors/ butors & radio, ting
Shops ment Providers Electro-
net IT System Retailers photo Agencies
Manufac- nics
Houses special.)
turers Retailers

CKAD       

Amena
Spain        

Telefónica
Spain        

Vodafone
Spain        

• All players in the Spanish market follow a multi-channel strategy, but do not make use of the channel mix for differentiation
from the competition
• While Telesales, Internet, IT system integrators and system houses as well as IT distributors, IT retailers and direct marketing
agencies are commonly used distribution channels, Spanish operators do not rely on service providers
Source: A.T. Kearney Global Survey, January 2003 5-6
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International benchmarking across 13 leading operators in Europe and the US show that
CKAD covers all relevant channels (continued)
Western Europe - Channels for Wireless Business Customers
Direct Business Sales Indirect Business Sales Channels
Channels
OEM/ Tele-
Key IT Other
Customer coms/
Account Tele- System IT Retailers Direct
Own Premises Telecoms Consu-
Mgmt sales/ Integra- Distri- (e.g. car Marke-
(Bus.) Equip- Service mer
(Large Inter- tors/ butors & radio, ting
Shops ment Providers Electro-
Enter- net IT System Retailers photo Agencies
Manufac- nics
prises) Houses special.)
turers Retailers

CKAD       

Bouygues
Telecom      
France

TIM
Italy  Mainly
consumer   

Wind
Italy     

• In contrast to the other operators in the panel, French and Italian operators make not extensive use of direct business channels
and mostly rely on key account managers as well as Telesales and Internet as direct sales channels
• Whereas all other operators in the panel use indirect sales channels with a strong focus on voice services (service providers,
telecom retailers etc.), Italian operators prefer to collaborate in the business segment with data services oriented distribution
channels: OEM, IT system integrators and system houses

Source: A.T. Kearney Global Survey, January 2003 5-7

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International benchmarking across 13 leading operators in Europe and the US show that
CKAD covers all relevant channels (continued)

North America - Channels for Wireless Business Customers

Direct Business Sales
Indirect Business Sales Channels
Channels
OEM/ Tele-
Key IT Other
Customer coms/
Account Tele- System IT Retailers Direct
Own Premises Telecoms Consu-
Mgmt sales/ Integra- Distri- (e.g. car Marke-
(Bus.) Equip- Service mer
(Large Inter- tors/ butors & radio, ting
Shops ment Providers Electro-
Enter- net IT System Retailers photo Agencies
Manufac- nics
prises) Houses special.)
turers Retailers

CKAD       

Nextel
USA       

Cingular
USA      

Verizon
USA      

• Mobile operators in the USA follow an almost similar multi-channel approach and make only "opportunistic" use of Telesales
and Internet for business customer acquisition
• US operators use classic indirect sales channels with a strong focus on voice services (service providers, telecom retailers etc.),
but currently do not collaborate with more data services oriented distribution channels (IT system integrators, IT retailers etc.)
Source: A.T. Kearney Global Survey, January 2003 5-8
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Employees in Type A, B, and C companies, who currently make their own

telecommunications purchasing decisions, are satisfied with ZMCC’s channel coverage
and service

“Does your enterprise influence your telecom “How satisfied are you with your operator’s
products/services purchasing decision?” channels coverage and service?”

Weak Strong
Yes
9% ZMCC

ZU-GSM

ZU-CDMA
No
91%
CT/XLT

Source: Employee Market Survey, A. T. Kearney analysis 5-9

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However, as purchasing is shifting form employees to enterprise decision makers, CKAD

needs to considerably strengthen the KAM function

Channel Performance Comparison

Channel ZMCC ZU ZT Comment

ZMCC needs to strengthen client coverage through direct sales force

“We never see ZMCC client managers, but we have frequent visits of
client managers from ZT and ZU”
— IT Manager, Category B Customer

“In general, ZMCC key account managers are ok but China Telecom
KAM 2 3 4 key account managers are definitely the best. They have the “key
account manager” concept since 1995!”
— Telecom Manager, Bank

“ZMCC and Unicom always change the account managers. I always

have a different person to help me each time. China Telecom is the best
in this areas.”
— Telecom Manager, Tourism

5 = Strong 1 = Weak

Source: Focus Group with decision makers; A.T. Kearney analysis 5 - 10

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However, as purchasing is shifting form employees to enterprise decision makers, ZMCC

needs to considerably strengthen the KAM function (continued)

Comparison with ZT in Key Account Management Quotes from Category A & B Customers

Key Abilities of Key “Client manager from ZT come to visit us each week. But
ZMCC ZT ZMCC client managers come much less.”
Account Managers
—Telecom Manager, Financial
Frequency of
  “We have never seen people from ZMCC.”
interactions/visits
—Telecom Manger, Transportation
Knowledge of latest
  “We are frequently updated on the most recent new
products/service product/service offerings from ZT.”
—Telecom Manger, Hi-tech
Understanding of
  “With more frequent interaction with ZT client managers, our
customer specific needs needs are more deeply understood by ZT”
—Telecom Manager, Banking
Responsiveness to
  “ZMCC is very responsive for some products like GoTone
requests
packages. But for more tailored solutions like MVPN, they react
very slowly.”
Ability to provide to
  —Telecom Manger, Hi-tech
solutions problems
“ZT has improved a lot in responsiveness and quality of post-
Quality of post-services   service. ZMCC is now lagging behind.”
“” indicates customers’ rating of performance — Telecom Manager, Social Services

Source: Focus Groups 5 - 11

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Given the importance of the Key Account Managers to CKAD’s business…

ZMCC Revenue by Channel Remarks

35% Example - Hangzhou

Industry KAM
• Currently, CKAD has 681
50% Key 15% Key Account Managers
Account Business KAM
Mgr across Zhejiang province
Project
• Going forward, the direct
<1% Manager(2) customer interface that the
100%
Key Account Managers
40% Own <1%
Agent provide will be increasingly
Channels Store(1) important since:
7-8% <1% – CKAD will offer more
Reseller Independent Rep.
and more complex and
7%
Affiliated Store tailored solutions to
10% enterprises
Partner <1% Systems – Enterprise solutions are
Integrator
forecasted to grow from
<1% Equipment
Provider
0.3% to 20% of CKAD’s
Value Added
Reseller (VAR) <1%
business over the next
2-3% ISP/ICP five years
% Estimated share of ZMCC
2%
sales year 2002 Other
CKAD scope of business

Note: (1) Includes a large number of independent SIM card distributors

(2) Largely an execution/ support function, limited sales
Source: ZMCC Hangzhou, A.T. Kearney 5 - 12
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… A.T. Kearney has conducted a diagnostics of current CKAD Key Account Management
(KAM) and the results reveal major challenges across all areas

Key Account Management (KAM) Framework Illustrative

• Are the Account Managers deployed

• Are Account Manager roles and
responsibilities clearly defined?
• Is the role and scope of work of
the Account Manager aligned with
customer segments?
against the right customer segments?
Key • Is the salesforce the right size and does it
cover the right geographic areas?
Account
• Are Account Managers spending enough
Management time selling?
• Can changes in sales support and
administration free more selling time?

• Is the right amount and type Roles & Deployment &

Responsibilities Productivity • Does compensation
of training offered to
reinforce desirable and
Account Managers?
doable initiatives?
• Should salespeople be
• Do we have
trained or replaced?
comprehensive financials
• Do we need different Motivation
Training, Coaching Information and non-financial
recruiting criteria? & Recruiting & Compensation
Resources rewards?
• Do Account Managers get
• Is there enough upside to
adequate coaching?
make a difference?

• Does the Account Managers have access to all

the information needed?
• Is IT leveraged to fully support Account
Managers in the sales process?

Source: A.T. Kearney 5 - 13

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Key Account Management – Roles and Responsibilities

Illustrative

Key
• Are Account Manager roles Account
and responsibilities clearly Management
defined?
• Is the role and scope of work
of the Account Manager
aligned with customer
segments? Roles & Deployment
Responsibilities & Productivity

Training, Motivation
Coaching Information
Resources & Compensation
& Recruiting

Source: A.T. Kearney 5 - 14

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There is no clear and consistent definition of the CKAD Key Account Manager’s role and
responsibilities across different subsidiaries in Zhejiang

Type A Type B Type C Individual KAM Classification

Subsidiary High-value
Enterprise Individual Enterprise Individual Enterprise Individual Criteria
Customer

Industry Mgr • Enterprise

Hangzhou • Individual
Business Mgr

Group Client Mgr

• Enterprise
Ningbo
• Individual
Business Mgr

Large Client Mgr

Wenzhou(1) • Size of customer
Client Mgr – C & Individual

Shaoxing Client Mgr • Geographic region

• For profit
Lishui Client Mgr
• Non-profit

Note: 1) Currently being rolled out in Wenzhou

2) Type A, B, C customers include any individual high-value customers within these enterprises. The category “Individual High-value customers”
represents high value individuals that are not employees of Type A, B and C companies.
Source: Interviews with ZMCC in Hangzhou, Ningbo, Wenzhou, Shaoxing, Lishui, A.T. Kearney Analysis
5 - 15
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CKAD should establish a clear and uniform set of KAM positions …

Blueprint for Role of Key Account Manager

Type A Type B Type C

Individual
Customer High-value • Establish KAM category
Type Enterprise Individual Enterprise Individual Enterprise Individual Customers II position to deal with
the relatively simple
needs of Type C
KAM companies and high value
Category I individuals (that are not
KAM employees of Type A, B,
Industry Teams C companies)
KAM Category II
• No need for further
Position
Government Finance segmentation due to
relatively homogenous
needs

• Establish KAM category I position to handle the complex and tailored products and services required by
Type A and B customers.
• KAM category I should be further divided into industry teams as appropriate. The main rational for this is
the increasing complexity of enterprise solutions and the similarity of needs across industries, and the
opportunity to sell similar solutions to several enterprises in a particular industry.
• In addition, industry teams will facilitate interaction with partners, e.g. applications providers and systems
integrators

Note: Type A, B, C customers include any individual high-value customers within these companies. The category represents
high value individuals that are not employees of Type A, B and C companies.
Source: A.T. Kearney 5 - 16
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… and responsibilities across subsidiaries

Category I Key Account Manager Responsibilities

Position Key Account Manager Category 1 Responsibilities

Job Provide sales and service to Type A and B • Grow Existing Customers. Build increasingly deep relationships
Description enterprises and their employees with existing customers by providing a growing range of innovative
products and services that meet customer needs - including both
For Category II Key Supervisor KAM Team Leader enterprises solutions and sales of individual products to employees.
Account Managers, Thus, maximizing CKAD sales to the enterprise and its employees.
lower levels of • 1 year or above marketing and sales
experience can be
• Retain Existing Customers. Ensure customer satisfaction to
experience improve enhance customer loyalty and minimize churn out. This
accepted since the
needs of Type C Qualification • Telecom knowledge, preferably related to requires meeting and exceeding client expectations in terms of
enterprises and high CKAD products product/solutions and service quality.
value individuals • Junior college degree
are less complex. • Acquire New Customers. Acquisition of new enterprise client
through promotion and sales of new and existing products and
• Develop sales to existing and new services.
customers
• Achieve customer satisfaction to enhance
Objectives To successfully execute above responsibilities, it is necessary for the
loyalty and minimize churn out
key account manager to develop a thorough understanding of
• Promote sales of new products and
For Category II Key customer needs, both on the industry, company and employee levels.
Account Managers,
services
target achievement
levels and
1. Sales Revenue – Existing Customers
weighting of KPIs 2. Sales Revenue – New Customers
should be adjusted 3. Churn Out Key Internal Interfaces
to take into account
4. Customer Satisfaction • Business support center (for billing, activation and etc.)
a more fragmented Performance
customer base and 5. Revenue Share of New Products • Marketing center (for marketing and individual products channel)
less sophisticated
Evaluation
product/service
• Data center (for data business R&D)
needs.
Refer to separate section for detailed • Executive office (for package design and promotion)
description of Key Account Manager
performance measurement and evaluation
Source: A.T. Kearney 5 - 17
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Key Account Management – Deployment and Productivity

Illustrative

• Are the Account Managers deployed

Key against the right customer segments?
Account
• Is the salesforce the right size and
Management
does it cover the right geographic
areas?
• Are Account Managers spending
enough time selling?
• Can changes in sales support and
Roles & Deployment
administration free more selling
Responsibilities & Productivity
time?

Training, Motivation
Coaching Information
Resources & Compensation
& Recruiting

Source: A.T. Kearney 5 - 18

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The size and coverage of the current Key Account Manager sales force is not aligned with
the market opportunity

Alignment of KAM Sales Force Coverage and Sales

Potential (Year 2002E)
RMB Bn
2

Hangzhou
1.8

1.6 Relatively few KAMs.

(Addressable Market)

Rapidly increase in the

Sales Potential

1.4 Ningbo number of KAMs to

align with market
1.2 potential
Wenzhou
1
Shaoxing
0.8 Relatively large number
of KAMs. Consider slow
Taizhou
0.6 increase
Huzhou Jiaxing Jinhua (if justified by overall
Number of KAMs is
largely aligned with 0.4 market growth) or
the market potential. decrease/maintain the
Maintain or grow 0.2 Zhoushan number of KAMs
sales force with Lishui
Quzhou
market 0
0 20 40 60 80 100 120

Number of KAMs

Source: ZMCC, A.T. Kearney analysis 5 - 19

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The productivity of Key Account Managers differ widely and 80% of sales is generated by
40% of the Key Account Managers

KAM Productivity – Hangzhou City

(Year 2002, Nov-Dec)
Accumulated Sales
of SIM Cards 4000

3000

2000
80% of
Sales
1000

0
0 10 20 30
Number of Key
Account Mgrs
40% of Key
Account Mgrs

Source: Hangzhou subsidiary; Survey among ZMCC subsidiaries; A.T. Kearney analysis
5 - 20
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Around 50% of a Key Account Managers time is spent on low value activities, such as
travel, subscriber registration, obtaining SIM cards and administration of handset repairs

KAM Activity Breakdown (Hangzhou Example) Remarks

Estimates
Sales related Service related Admin • Around 21% of a Key Account
100% Manager’s time is spent on the
10%
road. Individual interviews
10% with Key Account Managers
7% indicate that they often travel
7% large distances across the city
7% area during a workday –
14% loosing valuable sales time
• A Key Account Manager
17% spends around 17% of his /her
time in ZMCC outlets queuing
and administrating
14%
subscriptions and simcards
14% • A Key Account Manager
spends around 12% of his/her
time arranging for handset
repairs
Client On road Complete On Client On road On Repair Admin Total
meeting (Sales) subscriptionphone/fax meeting (Service) phone/fax handset
and Obtain
SIM card
Low value activities

Source: Interviews, A. T. Kearney analysis 5 - 21

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CKAD should expand the CKAD sales force from 681 to 784 Key Account Managers to
align with market opportunities - including large expansion in Ningbo, Wenzhou and
Hangzhou
Number of Key CKAD Key Account Manager Sales Force in Zhejiang 103
Account Managers 70 59
2002 Actual
2002 Target
2007 Target 154
94 87
72
29 43

287

185 22 16 26
114

215
137

11 12 25 52

166
103 105 106 106 124
59 47 71
33 11 22

Source: Zhejiang Statistic Bureau, ZMCC, A.T. Kearney analysis 5 - 22

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Reduce the time spent on low value activities such as travel, administrating subscriptions,
simcards and handset repairs – realizing savings of 8-12 hours per week
Improvement Share of Total Estimated
Area Work Week Recommendation
Time Saved(1)

• Account for geographic proximity/clustering of clients

when assigning clients to Key Account Managers
Travel • Improve time management skills - proactively manage
21% 3 hours
(Sales & Service) customer meetings to ensure overall efficiency and
maintain updated data on clients, e.g. clients’ preferred
meeting location

• Enable Key Account Managers to obtain SIM cards,

complete client subscription and expedite rush
Complete orders/services at ZMCC stores without queuing and at
Subscription & the CKAD office:
17% 3 hours
Obtain SIM card — Establish priority status for Key Account Mgr at
own store
— Assign staff at CKAD office to assist Key
Account Mgr

• Provide free voucher for handset repairs to encourage

clients to go to venders shop or repair center instead of
Handset Repair 10% calling on Key Account Managers 2 hours
• Enable Key Account Managers to test and repair
customer’s handsets at CKAD office location

Total 48% 8 hours

Note: (1) Based on 42 hour work week.

Source: ZMCC interviews, A.T. Kearney analysis 5 - 23
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Key Account Management – Motivation and Compensation

Illustrative

Key
Account
Management

Roles & Deployment

Responsibilities & Productivity
• Does compensation
reinforce desirable and
doable initiatives?
• Do we have
Training, comprehensive
Information Motivation
Coaching financials and non-
Resources & Compensation
& Recruiting financial rewards?
• Is there enough upside to
make a difference?

Source: A.T. Kearney 5 - 24

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There is no consistent set of KPIs for Key Account Managers rolled out across subsidiaries

KPI Comparison Across Subsidiaries - Examples

Revenue

Cost

Customer #

Acquired new customers

Customer retained #

ARPU increase

ARPU decrease

Customer degrade

Churn out

Satisfaction rate

Handset bandage rate

Enterprise client #

Acquired enterprise #

Enterprise churn out

Enterprise new biz (solution) sold

VPMN usage rate

New biz # of user in enterprise

New biz revenue rate

Receivable collection
City The number
and type of
KPIs used
differs
Hangzhou ۷ ۷ ۷ ۷ ۷ ۷ ۷ ۷ ۷ ۷ significantly
among the city
Ningbo ۷ ۷ ۷ ۷ ۷ ۷ ۷ ۷ level
subsidiaries
Shaoxing ۷ ۷ ۷ ۷ ۷

Lishui ۷ ۷ ۷ ۷ ۷ ۷ ۷ ۷ ۷

Source: Survey among subsidiaries, A.T. Kearney analysis 5 - 25

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Many Key Account Managers are not clear on the indicators that are used to measure
their performance and believe that the KPIs fail to create the right incentives

Are you aware of what indicators that are Does the current performance indicators create
used to measure your performance? the right incentives for the sales force?

Unclear
2%
Very Clear
26%
Yes
34%

No
66%
Not Very
Clear
72%

Source: KAM survey in Hangzhou Subsidiary; A. T. Kearney Analysis 5 - 26

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CKAD should evaluate Key Account Managers on five performance indicators – sales to
existing customers, sales to new customers, churn out, customer satisfaction and share of
new products

Guiding Principles for KPI Definition Recommended KPIs

 Consistent – Align corporate strategy with Sales Revenue

1
business initiatives by translating strategic – Existing Customers
direction into KPIs
Sales Revenue
2
 Simple – Limit the number of measures to a – New Customers
critical few, not more than 6-8, so that it is
easy to monitor and focus
3 Churn Out
 Comprehensive – Incorporate internal and
external, financial and non-financial,
quantitative and qualitative measures 4 Customer Satisfaction

 Balanced – Ensure that one objective is not Revenue Share of New

pursued to the detriment of another 5
Products

Note: Account profitability is not a recommended KPI since the accounting system does not allow for evaluation of cost on
account level. Instead, desired margins should be ensured through adequate pricing guidelines
Source: A.T. Kearney 5 - 27
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Set stretch performance targets for KPIs to maximize sales force performance
Illustrative
Expected Performance Against Targets Remarks
• Set stretch targets at levels such that
Contract target Stretch target — Only 20% of staff can achieve or
overachieve
— 60% of staff can achieve “contract" targets
— 20% of staff will not achieve "realistic"
targets
• Track both stretch and contract targets, both of
which are tied to compensation
— Achieving or over-achieving stretch targets
translates to A rating
60%
— Achieving contract targets translates to C
rating
— Not achieving realistic targets translates to
E rating
20% 20% • Compensation should be based on actual
performance against targets, and not against a
forced performance distribution ranking

Percent of staff

Source: A.T. Kearney 5 - 28

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Establish a clear link between performance and bonus pay-out

Illustrative
Calculation of Performance Rating Bonus Pay-out
Assumes 20% of Assumes 20% of
Assumes 60% of staff achieves
Actual Weighting Weighted staff won't staff will achieve
KPI achievement of of achievement achieve realistic and over-
realistic targets achieves on
target KPI targets
stretch
Sales Revenue
– Existing 120% 30% 36% Realistic Stretch
Weighted Performanc Target Target
Customers Achievement e Rating

Sales Revenue
– New 70% 30% 21% >100% A
14 +
Customers
80-99% B

Bonus months
Churn Out 80% 15% 12%
8-10
60-79% C
Customer
Satisfaction 120% 15% 18%
Rate 20-59% D
4-6
Revenue Share
<20% E
of New 60% 10% 6%
Products 2-3

1
Total: 93% E D C B A
Performance
Actual target levels should be based on historical Rating
data individually designed at city/ cluster level

Source: A.T. Kearney 5 - 29

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Key Account Management – Training, Coaching and Recruiting

Illustrative

Key
Account
Management

Roles & Deployment

• Is the right amount and Responsibilities & Productivity
type of training offered
to Account Managers?
• Should salespeople be
trained or replaced? Training,
• Do we need different Information Motivation
Coaching & Compensation
recruiting criteria? & Recruiting Resources
• Do Account Managers
get adequate coaching?

Source: A.T. Kearney 5 - 30

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The recruiting process is perceived to be relatively good and Key Account Managers have
relevant experience in Telecom and Marketing & Sales
Hangzhou Example

KAM Recruiting Process & Criteria Experience Levels of Key Account Managers

KAM recruiting interviews are conducted by an HR Mgr, a Months of Experience

Marketing Mgr and a CKAD Mgr:
• Telecom background 34
• Sales/Marketing experience 31
• Education

“Currently the recruiting is mainly based on work experience in

sales/marketing, telecom background, and college degree. I think
this is good”
Key Account Manager

“The recruiting pay much attention on applicant’s 9

communication skill and sales/marketing experience, which are
all directly linked to our real work”
Key Account Manager

“Most of the newly recruited employees are able to effectively Telecom Experince Mkt/Sales Experience ZMCC KAM
undertake their work” Experience
Key Account Manager

Source: KAM survey in Hangzhou Subsidiary; A.T. Kearney Analysis 5 - 31

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However, Key Account Managers do not believe that current training programs
sufficiently address their needs, especially in understanding customer needs, new products
and sales/negotiation skills
Do you believe that the amount of training Selected Quotes on Training Needs
should increase, decrease or stay unchanged?
"We need more training on selling skills. During my work, I'm often
76% bothered by client's turning down my offer and I don't know if and
how to further negotiate“
Key Account Manager

"They should teach us how to better communicate with people and

to establish relationships. For example, we are often expected to be
able to meet the management of the enterprise client besides the
contact person within 3 visits to the enterprise.But how do we
achieve this?“
Key Account Manager

"If the department can give us more case training, e.g. how to
negotiated with client and sell a big deal, then it will be very useful
14% to us“
10% Key Account Manager

0 0 “New employees should work in our ZMCC stores for at least 1

week before becoming a Key Account Manager. This would be good
Significant Increase No Change Decrease Significant field training and would teach them the business process"
increase Decrease Key Account Manager

Source: KAM survey in Hangzhou Subsidiary; A. T. Kearney Analysis 5 - 32

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In addition, there is room for improvement in informal on-the-job coaching by supervisors

Is the coaching you get by your Selected Quotes on Coaching

supervisor satisfactory?
“Most supervisors are employees with a long SOE history,
they to some extent lack the experience and feel for customer
Unsatisfied service, so their coaching is not very effective”
5%
Key Account Manager
Very Satisfied
33% “ …when I turn to my supervisor, she is very kind, however,
sometimes she doesn’t have the knowledge and skills to help
me”
Key Account Manager

“My supervisor tries to teach us something now and then,

but is in fact not very useful”
Key Account Manager
Not Very
Satisfied “Some supervisors don’t care much about coaching
62% subordinates, they care more about their own business”
Key Account Manager

Source: KAM survey in Hangzhou Subsidiary; A. T. Kearney analysis 5 - 33

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The ZMCC Training Center should focus training of Key Account Managers on customer
needs (both enterprise and employees), CKAD new products & services, sales & marketing
and negotiation skills …

Should the content of training be changed? Remarks

• Training should focus on building the
Increase Maintain Decrease
Training Area right competencies that KAM need to
Focus Focus Focus
acquire, grow and maintain customers
General Telecom Knowledge ۷ • Feedback from key account managers
should be an integral part of defining key
Understanding of customer needs training areas and designing training
(enterprise) ۷ programs
• A survey in Hangzhou branch shows that
Understanding of customer needs the training in city area should focus on:
(employees) ۷
— Understanding of customer needs
(enterprise)
CKAD new products & services ۷
— Understanding of customer needs
Sales & Marketing skills ۷ (employees)
— CKAD new products & services
Negotiation skills ۷
— Sales & Marketing skills
Customer purchasing behavior ۷ — Negotiation skills

Source: KAM survey in Hangzhou Subsidiary; A.T. Kearney Analysis 5 - 34

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… and develop basic and specialized programs that meets these training needs

Basic Program Specialized KAM Programs

Future Business Model — HR Training DRAFT Strictly Confidential

Basic Training Program Will Ensure the Establishment of Training

Infrastructure
Training Programs Future Business Model — HR Training DRAFT Strictly Confidential

Training objective, target and content for strategic specific KAMTraining program
A comprehensive set of soft skill based Management & Leadership
Training program……
E. CKAD new products & services (con’t)
Management & Leadership Training Required course

F. Understanding of customer needs

Program E: KAM Basic Skill Based Training

Target Audiences Preferred Approach Objective Content

Core Knowledge All required basic skill based Training program for KAMs:
Individual Modules/Content
(enterprise)
Develop Improve skills of KAM, to facilitate
Area G3-4 G5 -6 G7 -8 Outsource establishment and expansion of retail RM team in • Soft skill
in-house – Common purpose and direction
2002/2003 – Management and organizational skills
Understanding of  CMCC Direction and Culture     – Business fundamental and individual skills
customer needs  Orientation Program  • Product skill

G. Understanding of customer needs

(enterprise) – Enterprise products fundamental
 Meeting/Presentation Skills Target Audience – Enterprise products sales skills
Understanding of  Information Management    
All KAMs
customer needs  Problem -Solving
(employees) 

Conceptual Thinking
Creative Thinking  (employees) Program F: CKAD’s Enterprise Product Skill Based Training

CKAD new  Communication Skill Objective Content

H. Sales & Marketing skills

products and  Strategic Planning
services  Change Management
 Project Management
 Knowledge Management
 Business Process Reengineering
 Continuous Improvement
    Enterprise products specific module as required
Improve deposit skills of KAMs, to support
growth in enterprise products, especially in 2003
-2005 :
• CKAD’s enterprise products and solutions
• Enterprise products International Best Practice
 • Referring famouse Customers
Target Audience
I. …
• Referring well-known solutions
KAM completed basic skill based timing •…
program (program E)

Source: A.T. Kearney analysis A.T. Kearney

Source: A.T. Kearney analysis A.T. Kearney

Basic training programs should be Specialized programs should be designed and implemented to fit the
defined based on competency needs. needs of different subscribers. This is to ensure that category I and
Each program should be described in category II Key Account Managers receive adequate and
terms of content, target audience and appropriate training in relevant areas specific to the subsidiary.
program development approach Objectives, target audience and detailed course content should be
defined accordingly

Source: A.T. Kearney 5 - 35

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In addition, the ZMCC Training Center should improve supervisors’ coaching skills and
the ability of Key Account Managers to be good coachees

Role of the Coach Role of the Coachee

Communicate Need for Support

Add Value
• Anticipation • “Am I communicating my need for support?”
• “In what areas am I looking for support?”
• Point of view • “In what way would I like to be coached?”
• Content
Commit to Results and Required Actions
Build trust • “Am I really committed to the results?”
• “Am I willing to do what it takes to
• Reliability
accomplish these results?”
• Objectivity
• Honesty Be Receptive to Coaching
• “How much ‘cooperation’ do I provide?”
• “Can I take straight feedback?
Establish Objectives • “How far do I allow my coach to ‘push’ me?”
• Define success
• Agree the
commitment

Coach
• Feedback/continuity
• Possibility
• Conversations

Source: A.T. Kearney

5 - 36
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The ZMCC Training Center should leverage E-learning for delivery of training programs
that do not require interactive participation. Benefits include cost savings, increased roll-
out speed and user flexibility
Key Benefits of E-learning

Delivery Mode
Training Area — Course development
On-site E-learning Cost Savings — Course delivery
General Telecom
Knowledge
Understanding of Consistent — All participants use the same
customer needs Course content to learn
(enterprise/employees) Content — Minimizes instructor bias

CKAD new products &

services — Employees do not need to travel to
Increase Training events
Sales & Marketing
Speed of Roll- — Courses are now available to off-
skills site personnel
out
Negotiation skills — Minimizes employees time away
from work
Customer purchasing
behavior — User learns at his/her own pace
User — User can choose the courses most
… Flexibility appropriate to his/her level
— User can choose to take courses at
times that accommodate his/her
schedule

Source: A.T. Kearney 5 - 37

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Example: E-learning Program

Sample Screen

Course Overview & Download Options Navigation Tool

• Course
overview
• Target
audience
• Key contents
and modules

• Introduction to navigation tool

• Download options and software and on-line resources
requirements, links to downloads • Registration process – Learn
• Link to Hardcopy download – Test
and starting point
– Research

Source: A.T. Kearney 5 - 38

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Example: E-learning Program (continued)

Sample Screen

Online Course Content Test Questions & Certification

• Multi media
options, e.g.
video clips

• Course contents • Test questions on course

• Conceptual frameworks contents
• Key learnings • Scoring and rating of
performance
• Record of course completion
– certification, diploma, etc.

Source: A.T. Kearney 5 - 39

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Key Account Management – Information Resources

Illustrative

Key
Account
Management

• Does the Account Roles & Deployment

Responsibilities & Productivity
Managers have access to
all the information
needed?
• Is IT leveraged to fully
support Account Training,
Information Motivation
Managers in the sales Coaching
Resources & Compensation
process? & Recruiting

Source: A.T. Kearney 5 - 40

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Key Account Managers do not have comprehensive and up-to-date information available
in the sales process …
Key Account Manager Current Source of Challenge
Area Information Needs Information
• Basic client information (business data, mgmt/contact • ZMCC Operations Platform and IRP System
Client
Background
person info, telecom usage, etc.) (KAM Team Leader only) through office desktop • Current
• ZMCC data on enterprise clients (e.g. revenue, MVPN • High value individual customer information
information is not
usage rate, etc.) and individual customers (e.g. ARPU, system
MOU, etc.) • Key Account Manager own data collection integrated
• Client history, i.e. record of previous interaction with • Not comprehensive
ZMCC

Pricing • Updated basic pricing guidelines for products and • Regular email with price list • Lack of coordination
packages • Regular meeting to brief on new pricing policy of price changes
Information • Upcoming and ongoing promotional pricing
across departments

Product • Basic information on existing products • Email with product information • Lack of adequate
• Planned new product introductions and key selling points • Regular meeting to brief on new products information on new
Information
• Upcoming and ongoing product promotions
• Customer feedback on products
products
• Related product information, e.g. handset functions

CKAD/ZMCC • CKAD/ZMCC organization and functions • Occasional email with new company • Lack of information
Organization • CKAD/ZMCC business processes information
on internal processes
• Key contact person for each department
• Available information sources and contact persons

Market • Market trends, especially competitor new marketing • The Marketing Center and CKAD issues • Lack of access
Information initiatives, promotions, price, products, etc. newsletters to management, but this
• Trends in the telecom needs of different industries
• Not comprehensive
information is type of information is not
• Information on the handset market, trends and upcoming available to Key Account Managers
products

Source: ZMCC interviews, A.T. Kearney analysis

5 - 41
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… and IT is not perceived to be fully leveraged

Do you have all the information you need in Are you getting enough IT support in the sales
the sales process? process?
Yes
26%
Yes
42%

No
No 58%
74%

“ZMCC policy changes rapidly, especially on handset packages, “Our email system often has problem and this creates
and some times clients know the new policy before KAMs” problems in customer interactions”
Key Account Manager Key Account Manager

“Information from internal sources is out-dated, especially client “My working PC has problems here and there and nobody
information” settle this problem since my coming for 3 months”
Key Account Manager Key Account Manager

“When we promote handset subsidy packages, we don’t even “When I have IT request, I always don’t whom turn to, and
know the functions of some new handset models” always nobody response soon”
Key Account Manager Key Account Manager

“Our new businesses are rolled out so quickly and we are not “The back office IT supporter should increase efficiency and
coordinated enough to received enough info in time” work correctly instead of doing wrong and annoy clients”
Key Account Manager Key Account Manager

Source: Interview in Hangzhou subsidiary; A.T. Kearney analysis 5 - 42

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CKAD should improve the comprehensiveness and accessibility of information that Key
Account Managers need in the sales process
Client Background
• Create integrated and comprehensive database
• Add information in the key areas, including:
– Basic client information, such as business
data, mgmt information, etc.
– Telecom usage of enterprise and
individual clients
– Special needs related to important
activities within enterprises (company
conference, outing) and individuals (e.g.
birthday). This creates an opportunity to
tailor promotions to activities
CKAD/ZMCC Organization
• Ensure introduction to ZMCC/CKAD
organization and processes at start of
employment
• Notify Key Account Managers of any
changes, e.g. through meeting
• Create and update contact list for people
related to key processes
Source: A.T. Kearney analysis
Key Account
Managers
Market Information
• Newsletter sent directly to Key Account
Managers
• Ensure comprehensiveness of information,
including market trends (especially
competitor tactics, trends in the telecom
needs of different industries, handset
market intelligence)
Pricing Information
• Coordinate pricing changes across relevant
departments
• Enable pricing information on intranet for
real-time access
• Explore possibility of mobile access
• Meeting to explain policy changes
Product Information
• Enable product information on intranet
for real-time access
• Ensure comprehensive information on
CKAD current and new products
• Ensure comprehensive information on
handsets, models and features
• Explore possibility of mobile access
5 - 43