Key Account Management And Marketing

Key account management (KAM) has proven to be one of the most important changes in selling that has emerged during the past two decades. It redefines the way business to business suppliers manage their relationships with strategically important customers and (when successfully implemented) builds deeper, more mutually beneficial partnerships.

A lot of the focus in the literature has been on the reorganisation and mindset shifts that sales and operations need to make for a key account management approach to be successful, with less focus on the marketing aspect.

  
I was fortunate enough to be able to find some time to sit down with Richard Vincent, a Visiting Fellow at Cranfield School of Management and an expert in key account management having led KAM teams for large multi-nationals to explore how marketing fits into the mix.

Could you provide a brief overview of why organisations implement key account management?

Richard: Organisations generally implement KAM to better serve large, strategically important customers that need more than an off-the-shelf approach to meeting their needs. In most sectors key customers make up a significant proportion of revenue, and often a large percentage of the profits.

 

These accounts are typically complex, with multiple geographic locations, and while presenting significant opportunities for the organisation their bespoke needs would be too disruptive to standard operations if companies attempted to handle them through the standard “mass market” processes.

 

Accounts are typically chosen by their strategic fit with the organisation and for market reach can sometimes include companies that are competitors elsewhere in the value chain. It’s worth noting here that the bulk of the value creation is now often considered to be generated once a product is embedded into the customer offerings, rather than being inherent to the product itself, and therefore the need for closer, more consultative relationships is greater than ever.

 

Such close relationships must need to evolve over time as trust grows – are there defined stages to the relationships?

Richard: There are definitely different levels to KAM relationships but there aren’t distinct stages, rather there is a continuous spectrum of engagement level and different relationships can evolve in very different ways.

 

At one end of the spectrum you have very light touch relationships that only involve a small number of people that have constrained contact. Often these are instances where the supplier views the customer as a key account, but to the customer the supplier is one of many and therefore kept at arm’s length. At the other end, you have fully integrated partnerships where joint product development and marketing efforts are engaged in but the nature of each relationship and the activities that are important can vary widely.

 

Its important to note that there should not be an expectation that there will always be a progression from light touch to full-integration. Each relationship should be looked at separately and the appropriate level found. Lighter levels of touch are equally valid if that is what the customer needs. That being said, the higher levels of integration do usually evolve over time from relationships that start at lower levels of touch and progress as mutual trust and confidence is built-up over time. Gaining trust can be a slow process but is very rewarding for both parties once it has been earned.

 

As you build those in-depth relationships with customers at a strategic level, which functions are most impacted? Is marketing often neglected?

 

Richard: Key account management is often viewed primarily as a way of working that impacts sales, operations and technical product development and marketing is often neglected. But when KAM is integrated and working well, the key account management team is almost a microcosm of every function within the supplier organisation.

 

In a deeply integrated relationship, you often get a situation where the KAM team members are communicating directly with their counterparts in the customer organisation, sales to purchasing, operations to operations, engineering to engineering, marketing to marketing and sometimes legal to legal.

 

When you have all this peer to peer communication going on, there is a huge amount of valuable insight and information generated but you have to have systems and tools in place that allow the KAM team to capture, filter, analyse and manage it in order to generate actionable items that move the situation forward. The emphasis should always be on next actions, not measurement of past performance. Normal CRM systems are rarely up to the job.

 

What is the role of marketing in key accounts? And should you have dedicated marketing support for the KAM team?

Richard: There are several key roles that marketing plays and in an integrated relationship its crucial there be dedicated marketing support.

The first area is to support the KAM team to maximise the reach and awareness of the organisation across a customer’s divisions and to ensure that messages are personalised for the key account. Industry consolidation often leads to complex customer organisations with multiple groups or divisions that don’t necessarily have a reason to communicate that frequently despite all using versions of the same products or services. So, ensuring knowledge dissemination and transfer is a key role of the KAM marketing function.

 

Another is to assist in forecasting and identifying opportunities for growth be that for new product development or new geographical focus.

If the key account is an OEM supplier, then marketing also needs to support the creation of materials the customer can re-use in their own marketing materials.

 

Are there different approaches marketing needs to take with key accounts? What should they focus on?

Richard: A shotgun, mass market approach is not going to be appropriate in a key account, so tailored peer to peer Account Based Marketing approaches are recommended. This is currently an area being researched by Cranfield’s Dr Sue Holt.

 

It’s important to note that key account relationships are constantly evolving in many different directions and therefore the entire KAM team needs to be much more agile than the parent company. Rather than focussing on backward looking KPIs, the team needs to focus on what is important now, and what will be important in the future.

 

When KAM relationships are working as they should, the customers will see the KAM team as a key component in keeping them ahead of their competitors.

 

If readers are interested in contacting you Richard, what is the best way for them to reach you?

Richard: If you’d like to contact me, please drop me an email at richard.vincent@winsor-vincent.com