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How Key Account Management can Revolutionise your Business 

Alistair Taylor | Jul 25, 2017 155 views 2 Comments

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Source: terimakasih0 on Pixabay (Creative Commons)

Key account management has developed over the last two decades to become one of the most important changes in the way businesses sell their goods and services to other businesses. An organisation-wide approach, KAM shifts the emphasis away from short term selling to long term collaboration and relationship building with those strategic customers that can help the business grow its profit margin long into the future.

In this article I want to explore how key account management can revolutionise your business’s approach to selling.

Why Key Account Management is not another Sales Strategy

It’s all too common for key account management to get mistaken for a slightly more complex form of sales strategy. This couldn’t be further from the truth and underplays the strategic long term approach that key account management encompasses.

There are several fundamental differentiators that distinguish key account management from sales strategies:

  • It seeks to strategically quantify value: The most intrinsic difference between sales and KAM is the way the latter defines value. Whereas sales seeks to build revenue through selling, strategic account management looks at what the customer values most and seeks to deliver this. This could be dependability, cost, locality, adaptability, flexibility or even shared business values.
  • It’s a long term approach: Short term wins matter, but because key account management isn’t just focused solely on generating immediate revenue and winning business, it can attract long term investment to realise long term strategic goals, such as improving supply chain integration or building collaborative approaches to innovation. 
  • It seeks to strengthen the customer’s business: Key account management sees the customer supplier relationship as a partnership and one that is reciprocal. In other words, it is in the interest of the supplier to strengthen the customer’s business, as this will generate further opportunities and enable preferred supplier status to be reached. In other words it is a ‘customer first’ approach that benefits both parties.
  • It’s a collaborative approach: Realising long term goals requires ambition and buy-in from both the supplier and the customer side of things. In that sense, KAM enables truly collaborative relationships to be built. 
  • It’s an organisation wide approach: Key account management is more concerned about changing the way you do business than just winning new business. It’s about building a sustainable pathway to growth. This requires buy-in from senior management, as well as bringing on board various other parts of the business, such as HR, IT and operations, so internal change can be realised and managed properly.

Hopefully this has outlined just how much bigger and more involved key account management is from a business wide point of view. Before I go on to explain some KAM tactics and how they can deliver profit margin for your business, let’s turn our attention to key account selection.

Selecting Key Accounts

It’s a truism in key account management that not all customers are equal and identifying which customers require resources and budget invested in is an exercise is quantifying value and how that value can be achieved through collaboration and innovation.

It’s tempting to think of the biggest customer accounts as the ones ripe for your key account management programme, but this isn’t always the case. Whilst today’s big revenue generators are often prime candidates they can also be some of your most troublesome, least loyal and ultimately financially draining customers. Creating a key account selection framework means focusing on lifetime value, that is the potential future net worth of a customer account.



Understanding long term value means looking forwards as well as backwards at your relationship with the customer. Are they a small but rapidly growing business? Do they share the same values as you and a willingness to collaborate? Are they good to do business with? Do they have a talented team who are capable of innovating and effecting internal change? All these are questions you should be asking of your potential key accounts.

Key Account Management Strategies to drive Profit Margin

There is no magic bullet or golden rule when it comes to developing and running effective key account management strategies. Each of your key accounts will have their own ways of doing things, as well as areas that can be improved. There are some very important general rules of thumb though and I’ve gone through some of the most important of these below:

  1. Position your strategy to effect organisational change: Key account management cannot be confined to the sales department. It’s important to understand from the outset that commitment will be required from other business functions like supply chain and HR. As I’ve mentioned KAM is about changing the way you dobusiness not just how you win
  1. Securing senior buy-in: Because KAM’s scope is business-wide and requires long term budgetary investment, it’s essential you get senior buy-in. This means bringing on board managers in key departments, along with director level sponsors for each key account.
  1. Training and development: Key account management is an organic and constantly evolving process that requires a blended approach of internal training and skill development. To secure major business through KAM programmes requires the training of cross-functional teams. This will help maximise returns. Training should involve internal coaching but also it can pay to capitalise on insight and expertise offered by external trainers.
  1. Appoint a key account manager: Key account managers require a raft of skills that go beyond that of a sales manager. This includes business management, building cross-departmental understanding across the business and establishing effective communication channels at all levels within the company as well as with key accounts.
  1. Set metrics and KPIs: The Austrian born management consultant Peter Drucker once famously remarked ‘what gets measured gets managed’. It should be intrinsic to all good key account management strategies. This means properly benchmarking against competitors as well as internal clients. This will help you contextualise achievements in KAM programmes at the account, business and market level.
  1. Constantly review: Key account management is as much art as science and decisions on your priority key accounts may need to evolve over time. A good key account management programme will be able to identify less successful accounts sooner rather than later, allowing you to divert vital funding and resources to other stronger opportunities. This means constantly reviewing all your key accounts, as well as keeping an active eye on new customers who are growing and showing potential against your key account selection criteria.
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2 Responses to How Key Account Management can Revolutionise your Business

  1. Shilpa Gaddikoppula July 25, 2017 at 6:54 pm (4 comments) #

    Great suggestions Alistair! Organizations have the opportunity to play pivotal roles for helping key service provider customers such as identifying, creating, differentiating, and deploying profitable leading-edge managed services. They can accelerate end-user demand for new services by creating joint marketing plans and executing direct marketing campaign deliverables and also optimize business and market planning through the sharing of best practices that are central to an organization’s success.

  2. Alistair Taylor July 26, 2017 at 11:09 am (1 comment) #

    Thanks Shilpa – Good points – I particularly agree that outside suppliers have an important role to play in both accelerating and expanding the customers performance gains. Using insight from other industries, structuring existing knowledge in new ways and facilitating activities so that all – rather than the normal few – voices from within the customer are heard, drives rapid improvements.

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