You must have heard people working in big companies use the terms “key account management” and “strategic account management” every now and then in their conversations and discussions.
But if you ask each one of them “What is key account management?” or “What do you mean by strategic account management”, be assured you will receive a different answer or explanation from each one of them.
This is not a good sign when the workforce in a company does not know the real meaning of Key account management, then the company is already on the path of downfall from the start.
It is necessary for each company to have an effective and collectively understood definition of key account management, because if a company is not able to define something, then it is next to impossible to develop a strategy around it and work on it.
Key account management keep your business growing.
What is Key Account Management?
Key account management (KAM) is the process of building long ever-lasting business relationships with the company’s most valuable customers. It describes the approach which each salesperson will need to apply to create these long term relationships.
A key account manager provides committed resources, rolls out exclusive offers and conducts periodic meetings for converting the customers into business partners.
So how can a Key Account Manager define the Components of Key or Strategic Account Management? Along with a core definition, a company and its workforce also require to have a shared understanding of the below-mentioned components which will help in creating focus.
6 core values of Key Account Management
- The key accounts need to be viewed separately from the customers which are just large in terms of revenue for the company.
- The number of key accounts should be limited, there should be a control on maintaining the key account list growth.
- Pursue the key accounts to become your institutional partners, so that together you can innovate and create value.
- Focus on the key accounts with three principal areas: penetrating, growing, and safeguarding the accounts from the competition.
- View the key accounts as assets that require continued and many times a huge amount of investment for yielding maximum returns. These investments are for organizing and supporting the business processes and systems to maximize the account value.
- The key account management investment returns should be viewed as a part of the long-term business strategy.
Difference between Key Account Management and Sales
Many people confuse sales and key account management. Though the outcome of strategic key account management and sales are similar, for example, revenue growth or increased profits, or attaining higher mindshare. The paths to reach these goals are different.
The sale is an all-encompassing process followed across all industries, whereas Key account management is specifically for catering to existing customers.
Strategic key account management is more widely used in B2B companies having complex solutions, varied offerings, and continuous, long-standing engagements.
Strategic key account management involves a deep understanding of the customer domain, the challenges faced and then arriving at a solution. In Sales, customers are offered a set of products that are already available with the company.
It is said that in sales the company sells to customers, whereas in Key account management the company helps the customer buy.
Key account management will help your business and your customer business to upscale, Understand the need of the customer and be with solutions not with the product. Selling onetime is different from Key Account Management. Focus on the long-term association with the customer.