Introducing Key Account Management successfully
Given limited sales resources, (even the biggest company has ´limited´ resources), ambitious growth and profit targets can only be achieved by strictly focusing on attractive customers. This, of course, does not mean that the other customers should no longer be served. The question is, however, how much time and attention is allocated and through which channels (distributor or internet instead of personal sales) they are served.
Key Accounts are customers which offer a particular potential - now or in the near future. They provide an opportunity to increase turnover and profit and to build a long-term partnership.
A step-by-step approach to introducing Key Account Management (KAM)
Segment your customers with respect to their development potential. Segmentation criteria may include turnover, contribution margin and the customer´s image in the market. Customers with the biggest potential are key account candidates. The question, how many key accounts make sense depends on the situation. However, experience shows that a key account manager cannot serve 20 real key accounts, but 2 -5 at the most.
After selecting your key accounts, you have to convince them of the benefits they will get from a particular partnership with your company. If the customer agrees, you can start to formulate a plan (Key Account Plan) to systematically develop the business. This includes a comprehensive analysis of the customer´s position in the market, the competitive environment, his business strategy and his internal strengths and weaknesses. On that basis, you can define solutions which offer your key accounts a measurable added value and which, at the same time, enable you to reach your turnover and profit targets.
Establish Key Account Managers. Key Account Managers should be effectively integrated in the organization, otherwise they can quickly become "paper tigers". They need sufficient authority and decision-making power to act effectively and to produce results. The best salesman is not necessarily the best candidate for the key account manager position. The latter is much more a general manager and a relationship builder than a seller who wants to strike a quick deal. Key account managers need the ability and patience to systematically penetrate a complex customer organization, to build networks and to identify opportunities for generating new business.
Key Account Management must not be done half-heartedly. A seller who serves key accounts on a part-time basis is not a real key account manager.
Experience shows that the challenges in key account management are similar across industries. A clear role definition, active support by Top Management, attractive remuneration packages, effective organizational integration, personality and technical know-how are universal criteria for success