What is Key Account Management?
Key account management (KAM) defines full relationship between a business and the customers they are selling to. It describes the individual approach of sales people to their customers in order to create long everlasting business relationship.
Key Account Management (KAM) could be the most important change in selling that has emerged in the past twenty years. Unfortunately, many KAM implementations fail and are abandoned. These failures are unnecessary. KAM is a major change, but the chances of making it a successful change can be hugely increased by following the steps below.
Key Account Management must be seen as a change in the way you do business, not as something that is confined to the Sales department. Converting your best sales people into key account managers is not the best option as they might not feel comfortable with their new role. In fact, the role requires more than sales skills – it also requires a range of skills including interpersonal, consultative, financial, planning, and influencing skills. Good key account managers are often technical people or project managers. Some companies choose to train their operations and supply chain people in KAM as well as their own sales people. A champion of the KAM programme can also be designated to lead and drive the implementation.
A KAM should be a visionary. They should help everyone see and be excited by what's possible. Their customers and their peers should respect them. They should be able to respectfully challenge and direct the customer in the customer's best interest. This means they must have a degree of comfort with tension. Traditional Account Managers are too quick to cave when facing tension with clients. Also, when progress needs to happen internally, they need to have the respect of their team. Team members should want to go the extra mile for them.
To get the KAM program started, you need to identify some key accounts, and you need to develop an offer that differentiates them from the rest of the customer base. Good advice here is to start small. It is easier to add customers to your KAM program than it is to ‘demote’ customers once you have told them they are key accounts. Generally, the number of key accounts should be small. Our rule of thumb is somewhere between 5 and 25 key accounts. Be clear about what defines a key account and stick to that. Don’t give in to pressure to add certain customers to your key account program just because they have been customers a long while, or they are golfing buddies with the CEO.
Many organisations make the mistake of simply moving their best sales people into key account manager roles.
KAM is about changing the way people work — it is not just a sales technique. Converting your best sales people into key account managers might mean you’ve put a bunch of people into a role where they are not comfortable. You may just lose your best sales people as a result.
In fact, there are technical people and project managers who can make great KAMs. You need to think about the broad range of skills the role requires:
Then you can look to choose the right person for the role. Don’t forget to train them: few people come into a KAM role with all the skills they need.
Key account management success depends on the relationship you have with your customer. Once your key accounts are chosen, you can begin your KAM strategy by proposing an offer which will make them stand out from the rest of your customer base. Maybe you can talk to your customers face to face or give them advice and tips that could help them. Make them feel appreciated – why not send a thank you note, gifts, vouchers, or other tokens of appreciation for staying with your company? Or by introducing added incentives like a loyalty programme which would entice customers to return?
A successful Key Account Manager recognizes the pace of change we are undergoing. Consequently, they are always open to training and development. They never rest on their laurels. Part of the respect they gain from others comes from the fact that others see that they are constantly growing in their perspectives and abilities. They constantly look for opportunities to improve in areas that they have identified as important.
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