Key account management (KAM) is concerned with planning and managing the relationship with the customer but this is a means to an end if you have little business development to show for it. Key account managers are not just salesmen with good negotiation skills but apply clear strategy to select, develop and maintain their most important customers in order to profit from them. They need to constantly update their own skills and have a clear idea of company strategy, operations and marketing functions in order to build lasting relationships with their key accounts. Customers now have power over their suppliers and are looking for greater partnership, anticipation of their needs and customised solutions/resources to give them competitive advantage.
Even for a large company the number of key accounts should not become unmanageable (optimum 15 to 35) and the right accounts should be selected for inclusion. With high numbers of key accounts it is doubtful that you can successfully attend to them and failing to deliver can lead to them exercising their customer power and going elsewhere.
When selecting these key accounts bear in mind the following:-
- Do your key accounts have a clear idea of your company strategy and are they aligned to it?
- Are they leaders in their field?
- Did you invest time and process in choosing them?
- Did you choose them objectively? Or were they just important to particular individuals/chosen under internal or political pressure.
- Is each department unified in the choices, were their views accounted for?
- Did you focus on the customer – their potential, their position in their marketplace, their strategy or just on the current profit yield from the customer?
- Did you use a criteria based approach to selection that was clear and covered customer needs/outcomes/attributes and risks?
- Do you have a dynamic process monitoring these accounts and review their resource allocation/status if they are not performing? Are you prepared to tactfully diminish their resource allocation?
- Are you using reliable diagnostic tools and measures of performance for your key accounts?
If you have answered yes to most of these questions then clearly you are not spending vast amounts of time managing accounts that really are not profiting your company and don’t belong in the key account category.