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The life and times of key account managers

by
11th May 2007

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By Lucie Benson, features editor

Key accounts management (KAM) revolves around strategic planning that goes beyond what we traditionally see as 'selling', in an attempt to satisfy the needs of today’s powerful and demanding customers.

It plays a crucial role for many B2B companies because it dictates how they can maximise profits from their clients, and those key accounts have the ability to form a major part of the sales revenue. As such, it involves a great deal of relationship management and account planning.

A successful key accounts manager will understand the history of the account as well as where it is going in the future. It is therefore reasonable to expect that a KAM will face many challenges in their career, as well as successes. So what experiences have today’s key accounts managers had? What were their aims and how have they set about achieving these? And what impact has KAM had on the company?

Alan Clark is strategic account director at RightNow, an organisation that provides on-demand solutions to CRM. Clark says that KAM was implemented at RightNow because they wanted to focus much more on their key customers and develop their presence there.

“To do that, you need to have a wider view of the customer, in terms of what they do and what they are looking for,” states Clark. “These customers are leaders in their particular field so that gives us a massive advantage of positioning ourselves with the leaders, therefore earning the right to go into the rest of that industry with some very strong success stories.”

Through working as a key account manager, Clark has had to channel his focus significantly. “I have to get under the skin of the customer a lot more because my scope is shorter,” he explains. “So rather than having a really wide territory, an inch deep, I have a very narrow territory, but I am going down into a lot more depth.”

Clark advises that the timing has got to be right, when companies are thinking of implementing KAM in their business. “The key account is absolutely vital in helping to mature the model. So once you have got a good, established company, I feel that you can go into that KAM getting closer to them, handling them better, and understanding them more. So you have to be established enough to have the access and the time to spend on those companies, and the proof at the end of it is really quite valuable.”

Even though Clark believes that KAM can sometimes be limiting, by getting to know these companies better, you can actually deliver much more value to them. “The more companies work with their customers, the more they are working with you; the closer you are, the more likely you are to do even more business with them.”

One of the challenges of KAM, says Clark, is getting over the notion that you are reducing your whole field of potential opportunities. “It is a bit nerve-wracking to start with, but I can’t emphasise enough that if you actually focus and get closer, you can have absolutely phenomenal success with those organisations.”

Service, contact and communication

Sapiens UK is a provider of IT solutions to the insurance sector. In the early 1990s, it was more technology-based, but towards the end of that decade it started to become more of a solutions provider. Raj Ghuman is director of account management for the UK and Europe at Sapiens.

“Towards the end of the 90s, as an organisation, we were not doing any form of account management and we needed to increase that function,” he explains.

For Sapiens, the first step towards KAM was all about service, contact and communication. Then, over the proceeding one to three years, the model started to mature. “When you want to introduce KAM, you have to put in place the principles, the background and the infrastructure, to enable a slick service to be delivered,” remarks Ghuman. “You must also ensure regular communication, so think about putting in place regular account review meetings.

“Over the initial 6-12 month period, there was a bit of bedding down to be done, but ultimately in the long run, that reaped its own rewards and enabled us to penetrate the customer base,” he adds.

After this initial period, Sapiens then introduced the commercial element of KAM. “From early 2000 to date, we have acquired significant new business,” says Ghuman. “Today, 85-95 percent of our new business comes from our existing customer base and that is a significant shift from where we were.”

Sapiens has now managed to ensure loyalty within its customer base, with some of the big insurance companies sticking with them since the early 90s. This has, in part, been down to KAM, so it has therefore had a huge impact on the organisation. For three years running, they doubled their turnover, year on year. “Our deal sizes began to increase from tens of thousands to hundreds of thousands in new business, to many millions,” remarks Ghuman. “Obviously these deals aren’t done in six months – they are over multiple years.”

Ghuman adds that the impact has been nothing short of enormous. “It has changed our mentality, and, to look at today’s climate, it is very difficult in the insurance sector to acquire new business. So we still need to acquire new names but our foundation is solid with our existing customer base.”

Relationship exploration

Chris Smith is currently director for Europe for risk solutions at Royal & SunAlliance. Prior to this, he looked after a team of key account managers in the UK risk solutions business. The European business is a couple of years behind its UK counterpart and Smith is now tasked with bringing key account managers into the European business within the next year.

Smith explains that, before introducing the KAM role to the UK business, they encountered many problems. “Our technical staff faced out to our customers, some of whom were not equipped to talk to customers,” he explains. “We didn’t change our approach based on how valuable the customer was, and we approached the customer on one line of business only.”

This meant that the business missed opportunities to cross sell and left the customer with no idea how to access the complex organisation. “We set about changing our approach by implementing pilot studies on eight of the accounts,” he says. “We hand-selected key account managers who were allocated to each of these clients, and we were able to prove our case following impressive feedback from the pilot clients.”

As a result of this, there have been significant differences in the way the business now operates according to Smith. “Eventually, all our customer touch points came within the control of this role, our competitors began to copy us and we had more focus on our most valuable clients,” he adds. “Plus, reward and remuneration has been driven by customer satisfaction and retention measures.”

For KAM to be a success, Smith adds that it is essential for senior management to be on board. “It needs buy in from the top of the organisation because high level decisions will need to be made,” he advises. “Also, ensure the KAM role covers all customer ‘touch points’. And acknowledge that KAM isn’t the answer every time – ask the customer what they want. Obtain good independent customer research and don’t rely on what you think you know.”

Ghuman believes that, with KAM, it all boils down to relationships. “Make sure you are religious about keeping relationships intact. Existing customers for any business will be the bread and butter. If you take care of them, they will take care of you. For us, they are the foundation of our business.”

And for Clark, it is the exploration of that relationship that heralds significant benefits. “KAM allows you to work in areas you didn’t initially realise you could, by having opportunities to work in other departments and getting to know the wider business. So it is moving around inside an organisation and getting to know them more – that is where the success comes from.”

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