4 things you didn’t know about Key Account Management
Key Account Management could see your growth double – but watch out for these four lesser-known pitfalls.
by Alisha Lyndon
August 31, 2022
Diana Woodburn, Chairman of the Association for Key Account Management, shares four lesser-known insights about Key Account Management which she has learnt from over 20 years in the field.
- It’s simple – but challenging
Key Account Management is a stunningly simple idea. But companies drift so far from that idea while kidding themselves that they’re doing KAM, when they’re absolutely not. With KAM, you have to take it whole. If you start shaving off this bit or that bit, pretty soon you’re not doing it at all. And if you’re not doing it, you’re not going to get the reward. So, when people say, ‘It didn’t work for us’, it’s almost always a failure of execution, which may be due to the culture or willingness to do it.
- It’s not about sales, it’s about trust
One of reasons execution fails is that everybody is thinking of it as sales and putting in sales targets and call rates – the wrong kind of drivers for a KAM program. Most key account managers do come from sales because that’s what the companies ask of them – a proven track record in sales. The problem with that is key account managers need to work with a lot of different people in different teams. Someone with a history in sales may have been working outside their company most of the time and not really in a team. Momentum ITSMA’s Customer Buying Index® found that enterprises have fewer than three trusted providers, which means, if you’re not one of them, your visits are potentially wasted. In Key Account Management, you’re looking to make sure that there is value from those meetings, and that has to be through tailoring. In my experience, when a company’s doing Key Account Management, it will see the growth in its key accounts of about twice the rate of the growth of its other accounts.
- It’s relatively new to tech companies
If you go back 20 years, the big tech industries didn’t feel the need to understand their customers that well or develop relationships with them. They were all about big sales. Now that’s not the case. In businesses where you’ve got sales spikes – a big project where sales were inclined to go in, win the project, and then exit when the project was fulfilled – they found that if they kept up the relationship, there actually was more business to be had in between those spikes. Often it didn’t have to go out to competitive tender in the same way as the big spikes did. People’s view has changed of what an ongoing relationship with a customer can yield.
- It’s not entirely suited to hybrid working
We recently did a survey on digitization in KAM, hybrid working, and using more virtual communications. Some people thought it had made the relationship better, some thought it made it worse, and some people thought it hadn’t changed it. So, the jury is out on that. There are advantages, for example you can do more virtual meetings instead of waiting for months to get a face-to-face. But I think everybody is clear that’s not a total substitute. When you’ve got complex things to talk about – and in KAM most of the customers are complex and most of the suppliers are complex – there’s a limit to what you can do in a virtual meeting.
The Momentum ITSMA Customer Buying Index® report is available at no charge for Momentum ITSMA Growth Hub members. To inquire about becoming a member, please contact firstname.lastname@example.org.
Listen to Diana’s interview in full on the ABM podcast here.
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