What is Key Account Management?
Key Account Management is a process that helps sustain and expand relationships with important key accounts and will work closely with multiple business departments in order to maintain and further develop the relationships with the key accounts. Key Account Management is responsible for the achievement of sales quota and is assigned key objectives/metrics relevant to key accounts.
Key Account Management is a strategic approach distinguishable from account management or key account selling and should be used to ensure the long-term development and retention of strategic customers. The acronym used by professionals in this industry is KAM.
The one common mistake many organizations, both small and big tend to make and repeat, is to treat all their accounts with the same business model. It is never too late, however, to correct the situation and start looking at your account type and process more closely. You will notice, there is a key difference in the account types, organizations like yours, have in their portfolio.
A Key Account Management process is required to manage Key Accounts, which may require more nurturing, different skills and utmost attention than other accounts.
The famous management rule applies in this case too, where 80 % of your profit will come from 20% of your strategic accounts. What resources to invest and how and where, are the key questions you have to handle. Automated systems and processes will work best for the 80% of your accounts, whereas, you can safely invest and focus your personal time on the sales of the rest 20% of your Key Accounts.
Knowing and serving these two different account types is the key to maximizing the potential of your sales force. It will pay to look at specialized KAM Softwares to help you mine your Key Accounts and enrich your relationship for the long term.
- Key account management is high profile but difficult to do well.
- Key account management is appropriate to several types of relationships but is most clearly manifest when supplier and customer have a mutually recognized partnership and a degree of trust.
- There are often mismatches between the way suppliers and customers perceive each other and their relationship, so careful communication and vigilance are vital.
- Regular monitoring of the profitability of individual customers by suppliers provides crucial information but is quite rare because customer profitability is difficult to measure.
- Strategic account managers need a broad portfolio of business management skills to deal with interdependent or integrated customer relationships.