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Strategic Key Account Management

What is Strategic Key Account Management (Key Account Management)?

Strategic Key Account Management (also known as Key Account Management ) is a process of creating, sustaining and expanding relationships with your company’s most valuable accounts.
The term is predominantly used in B2B sales to describe the approach that is taken towards accounts that make up the majority of the business income. Key Account Management requires close work with multiple departments in order to maintain and further develop the relationships with these key accounts by providing dedicated resources and unique offers.

What is the difference between KAM and Sales?

The major difference between KAM and Sales lies in their point of focus: a Salesperson is concentrated on the short term profit whilst a Key Account Manager underlines importance of the future.

KAM tends to be specific to existing customers in B2B companies with complex solutions, multiple offerings and long term repetitive engagements. It requires a deeper understanding of customer domain, situation and challenges involved in order to achieve a profitable relationship based on mutually beneficial project.

Sales are concentrated on the offering of suites of products already available and selling them to (potential) customers rather than ‘helping customers buy’ the product (this is the main objective of KAM).

4 Stages of Relationships with Key Accounts

1) Tactical Relationship: The account can be at this stage for two reasons: either it is new or nature of the ‘Account’ makes it preferable to keep the relationship tactical. Transactional emphasis, pricing as the main criteria, few engagements, short term forecasts and the ease of exiting the relationship for wither party are the main characteristics of the Tactical Relationship Stage.

2) Cooperative Relationship: Stage for low to medium potential ‘accounts’ that have slowly started moving beyond transactions with an increasing cost of relationship. Engagements and interactions remain at an operational level but the number of people engaged into the process have augmented from both sides.

3) Interdependent Relationship: At the Interdependent Relationship stage, interactions are taking place at all functional levels. ‘You’ and ‘Account’ are locked in mutually beneficial engagements (so it would be difficult for the account to exit the relationship) that are profitable and plausible for long term forecasts.

4) Strategic Relationship: Strategic Relationship is the highest stage of a relationship where a win-win and long-term key account management strategy has been achieved by cooperation from both sides. The exit barriers to the relationship are very high and would have major consequences. The ‘account’ is very profitable and you have a long-term visibility of business growth.

What is the Role of a Key Account Manager?

The core role of a Key Account Manager is to handle the most valuable clients and build strong and long-lasting relationships with them. They manage the account, identify challenges or opportunities and find means to address them in the best possible way. They play a critical role in client retention and revenue growth processes. Key Account Managers and Key Account Directors should make proof of skills such as ability to cooperate, effectively lead the key account team and coordinate the creation key account management plans including activities for complex accounts. In order to ensure a smooth Strategic Key Account Management in big companies, various level of KAM Managers are required (examples as follows):

  • Assistant Key Account Manager,
  • Junior Key Account Manager (also referred to as Large Account Manager),
  • Senior Key Account Manager (also referred to as Key Customer Manager),
  • Regional Key Account Manager,
  • National Key Account Manager,
  • International Key Account Manager,
  • Global Key Account Manager.

Key Account Management Best Practices

Finding your Best Practices to support you throughout all stages of the Key Account Management process will be highly beneficial to your business.

Successful Account Management strategies involve:

1) Selecting the right accounts.
2) Building a dedicated team.
3) Consistently measuring account performance (make use of Key Account Management systems).
4) Investing in the right Key Account Management tools (such as Key Account Management software).

Read more on the topic of Key Account Management

What is Key Account Management?
CRM: What is Key Account Management?
What is Key Account Management – LinkedIn Course

For more KAM Best Practices such as: Key Account Management Models, multiple Key Account Management PPT and Key Account Plans, see Strategic Key Account Management category below.

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