Key Account Management (KAM) is systematic process of engaging and managing specific group of existing customers. It assists to define, understand and achieve a set of goals which mutually benefits organization and customers. The KAM process helps in engaging customers and nullify competition with respect to the customer account, where the ultimate goal is maximizing the revenue.
With combination of strong knowledge products, services and business judgments, suppliers can build their brand and get associated with key customers naturally, to generate required results.
About KAM
KAM practice usually involves part of marketing, relationship development, sales intelligence, market research and strategy management. KAM is not a short term activity, instead it requires months and years implementation efforts. There are various organizations who consider KAM as a pure sales process but they fail to understand KAM is all about building partnership which is more than sales. Besides, strategic planning, sales forecasting, opportunity generation comes into picture, while KAM process is under implementation.
Why it is necessary?
In every organization revenue generation is most important and thus, KAM contributes to achieve that goal. Moving further, customer segment can be divided into three parts i.e. new customers, major customers and key customers. In customer management approach each customer is treated as an account through which an organization generates revenue. From stats it is observed, if an organization has 500 new accounts, the contribution is only 10% of the total revenue. Whereas, remaining revenue is generated from major and key accounts which contributes 80% of the total revenue in the form of repetitive business. So, it becomes extremely necessary to manage the accounts of customers to generate maximum revenue. At times, KAM is also beneficial in identifying the competition and strategizing accordingly.
KAM Process
The process of KAM could be defined in simple ways as “learn from past, implement in present and benefit in future”.
The steps to implement successful Key Account Management Practices are:
- Shortlist your key accounts
- Appoint a key account manager
- Identify decision makers in account
- Build and maintain relationship
- Understand and define mutually beneficial goals
- Identify opportunities and build value chain
- Prepare strategy and action plan
- Implement action plan and win
KAM helps the organization in building rapport with the customer. A supplier organization appoints a person who will be treated as account manager for the customer where they study customer personas and requirements simultaneously. He is also responsible for developing and maintaining relationship to understand the present and future perspectives. Whenever there is a customer requirement, account manager records it and proposes a solution which is been already forecasted by account manager while studying customer’s persona. The account manager is capable to engage a customer to a level of partnership by managing account thoroughly by assuring about the profit before any competition jumps in.
Conclusion
KAM practices allows organizations to build relations and gain trustful value towards existing accounts. The revenue generated by key accounts can contribute in business growth. Understanding the value for each key account enables managers to contemplate opportunities in advance to develop a mutual beneficial approach.
