There are a number of vital signs that will indicate whether a Key Account Management (KAM) programme is fighting fit or suffering with a series of debilitating ailments. The challenge is not to focus on just one or two in isolation but to build a robust and healthy programme that has the whole system aligned and in rude health just when you need it to be.
The Strategic Account Management Association (SAMA) estimates that only 20% of KAM (or SAM) programmes are fully functional and effective. Most KAM programmes fail because they take a narrow view of where the work needs to be done. Some KAM programmes focus on developing good key account managers, some on developing robust key account plans, some on understanding the customer and some on getting the measurement & reward system right.
There are a number of elements of the fitness regime required for a successful KAM programme. The best programme leaders have understood this and have addressed all of them to create a complete and integrated approach to managing their most important customers. In this two-part blog we’ll present an overview of each of the elements.
Let’s begin with Programme & Change Management: How clear and well-constructed is your strategy for rolling-out KAM? Is your programme governance robust? Is there clear leadership, sponsorship, and does the capacity of your account management resource match your programme aspirations? How well-constructed is your KAM skills development plan? Without solid programme management, companies run the common risk of pockets of excellence forming but a programme failing overall.
Closely related to Programme & Change Management is Measuring & Rewarding Performance both at the programme level and the performance of the KAMs themselves: Is there a suite of programme metrics encompassed in a balanced, performance scorecard? Do the metrics underpin how you would like the people in the system to work, and is there a healthy balance between lagging measures of financial performance and leading measures encouraging everyone to operate within the system as planned? How reliable is the system of pipeline and opportunity management?
A whole-enterprise approach to servicing the company’s key customer accounts demands the establishment of a Customer-Centric Culture. This is no easy task but has become increasingly important as customers demand higher performance standards than ever before, often led by professional supplier managers on the customer side, intent on capturing full-value from the relationship.
Managing Account Knowledge includes CRM and knowledge management systems. If your organisation suffers high churn of your KAM resources, capturing and retaining account knowledge is of paramount importance. To excel in this area your CRM system capability must be exploited to the maximum. The notion of CRM as an elaborate and expensive address book is forbidden!
Having a clear and consistent way of executing your KAM practice can be a real differentiator for companies looking to make their mark in their sector. A systematic, yet flexible KAM Process understood by internal stakeholders will be a great enabler of comprehensive account planning, internal collaboration with partners and the post-contract delivery of great customer service and value.
Of course, as an advocate of account management, you would like to roll-out the practice to as many customers as possible, as it has proven time and time again a strong enabler of customer retention and business-winning. But we all operate under the limits of scarce resources so Account Selection for inclusion in the KAM programme must be based on a dispassionate assessment of the importance of each customer to the company. For that you need a multi-criteria account selection template and process.
Finally, here in Part 1, we’ll consider Structure & Organisation. Clear roles and responsibilities within a well-designed organisation structure are a must have. CXO sponsor roles for each key customer relationship are defined and there is clarity about the expected methods of support and engagement required of the sponsor by the KAM. The days of the KAM being simply a high-ranking sales manager are, or should be, long gone. The role demands broad business skills, and P&L responsibility for the customer account being managed is strong evidence of the KAM as ‘business manager’ having arrived. The role should be seen by the company as a senior one and appropriately remunerated.
We hope this gives a good flavour of the territory covered by the Four Pillars KAM Healthcheck. The KAM Healthcheck itself enables the evaluation of 120 indicators, as well as providing a prescription for how to grow your KAM programme’s success to the best it can be.
In part 2 we’ll provide an overview of the Development of Key Account Managers, including their Negotiating Competence, Building Account Teams with stakeholder involvement, Deep Customer Insight for competitive advantage, Selling (and defending) Value, and the management of Key Account Plans.
By Ed Bradford & David Atkinson