Key account management, or ‘KAM’, is a vital aspect of any marketing agency or department. Without good KAM, everything else suffers.
Despite this, most companies seem to get it hopelessly wrong. Here are five reasons why this is happening, and what can be done to improve the situation.
1. Business schools don’t cover KAM
An increasing portion of the business world is owned and controlled by a few large conglomerates that fall under the responsibility of KAM, and yet business schools in the UK aren’t teaching it. This means that students graduating from MBA and MSc courses aren’t prepared to effectively work with clients of this size; they’re ill-equipped to deal with the realities of the modern world. If more institutions incorporated KAM into their curricula then the problem would be massively improved, but there’s another glaring issue that stands in the way of progress.
2. Professors and lecturers lack KAM experience
Because many of the individuals teaching these courses come from a purely academic background, they lack the experience necessary to educate others on KAM, and so it remains grossly neglected on their curricula. Business schools could improve this situation by hiring lecturers that come from real-world marketing backgrounds and have the relevant knowledge to teach students about effective KAM.
3. Companies think KAM is about selling
There’s a widespread perception among businesses that KAM is simply ‘selling with bells on’, and therefore they assign their best sales people to deal with their biggest customers and clients. In fact, this is totally the wrong way to think about KAM, and research conducted by myself and Cranfield University School of Management has shown that important customers hate being sold to. Instead, KAM is about offering solutions to the customer that can help create advantage, rather than solutions that merely help them avoid disadvantage.
4. KAM roles are assigned to sales people
With the above point in mind, KAM requires managers that have a deep understanding of the business of their major customers. What it doesn’t require, on the other hand, is sales people who are paid to sell, which is what most companies seem to opt for. Unless they’re paid to analyse in detail the business of their customers in order to prepare positive solutions, they will continue to sell — much to the annoyance of these big customers. This is why there needs to be a root and branch reorganisation of KAM within most companies.
5. Most companies are too set on ‘delighting’ customers
All too often, companies have self-destroying KAM policies that are only focused on maximising the profit from each of its customers. Instead, companies need to classify their major customers according to the potential of each one if they are to grow their profits over an extended period of time.
If companies can learn from these five fairly simple tips, it won’t be long before they’re seeing the KAM results that they’ve always been hoping for.