Key account management is a strategic business approach to ensure long-term partnerships with important customers. It recognizes that large customers are getting larger and more sophisticated in their demands. Key accounts purchase significant volumes and expect specialized attention, services, and a long-term cooperative relationship from suppliers. Effective key account management requires identifying the right key accounts, appointing and training dedicated account managers, and setting the proper metrics to benchmark performance and drive business growth.

1. Key Account
Management

2. The critical new interfaces for sales
Marketing Strategy
Large
Customer
Sales Level/
Potential
Small
Low
Customer Service/Relationship
High
Requirements
Key/Global
Account
The shrinking
Management
domain for the
traditional
salesforce?
Direct
channels/
Internet-based
sales

3. Customer power
• Big customers are getting bigger
• Customers are rationalising their supplier base
• Customers have become more sophisticated
• Customers want tailor-made solutions
• The cost of serving customers is increasing
• Suppliers and customers are developing new
together
ways of working

4. Key Account Management
• Key account management is a strategic
business approach with the objective of
ensuring long-term and sustainable
business development through profitable
partnerships with strategically important
customers
• Key account management is not an
isolated business process. It is an
integrative element of the business
strategy

5. Key Account Management
• Recognize that KAM is an organizational
change, not a sales technique
• Get high-level buy-in
• Appoint a KAM champion
• Identify your key accounts very carefully
• Appoint and train your key account
managers
• Set the right metrics.
• Benchmark and build.

6. What is a Key Account
• Purchases a significant volume, both in absolute
dollars and as a percent of a supplier’s total sales
• Involves several people (perhaps several
functional areas) in the purchasing process
• Buys for a number of geographically dispersed
organizational units, e.g., stores, branches.
• Expects specialized attention and services
• Expects a long term cooperative relationship

7. Selection Criteria
• Order size
• Product mix
• Price and margins
• Customer maintenance cost
• Capacity utilization
• Order patterns
• Credit history

8. Buyer Seller Relations Evolution
• Awareness
• Exploration
• Expansion
• Commitment
• Dissolution

9. Managing the Major Account Boundary