Key Account Management: What the Best Companies Have Done to Improve Their Programs
- Customer Connection, Most Recent Blogs
- Account loyalty, Key accountsCustomer Connection, Collaborative R&D, Executive Matching, Key account management, Operational Autonomy, market support,
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The Focus of our Research
In a previous blog post, we introduced 8 Critical Success Factors for Protecting and Growing your Best Accounts based on a recent study completed by Solutions Insights and Hult International Business School. In that study, we conducted primary and secondary research on over 20 of the best Key Account Management (KAM) programs in many global industries. In addition to what we consider “baseline” critical success factors reported in our earlier post, we also identified what leading companies have done in the past year to improve their programs. Our goal was to determine what the best programs were doing to maintain their leadership position – and two big trends stand out.
The Two Biggest Trends
As a result of our extensive research, we were able to aggregate all of the important KAM trends into two categories:
Category #1: Greater Operational Autonomy
There seems to be a significant trend in how KAM programs are structured and positioned within their respective companies. The best companies have created unique KAM organizational units. Rather than having the KAM activities sit within the sales function, these firms have created a standalone KAM team with roles and responsibilities that are solely focused on the key account.
As a standalone team – which in some cases were set up as separate Business Units -- these KAM programs have honed their focus with dedicated top account reviews and tools, strong processes and separate internal accountability and support. This organizational independence for the traditional sales force also meant that many of these programs had their own budget and financial incentives, separate from the other regional and named accounts. This allowed some of the largest accounts to be run as their own P&L, with significant influence on R&D, supply chain, account negotiations and customized account support.
The move towards greater operational autonomy even stretched to talent management, mandating that elite account managers and support teams have dedicated training and development separate from the general pool of sales training and enablement activities.
Of course, with the increased investments and dedicated resources, we also found that there was often an expectation of higher performance and greater returns. The bar was set very high for long-term performance and excellence. To be clear, the key accounts that are the most valued strategically, or have the best opportunity for growth have always gotten the most attention. The difference that we observed, however, was that the leading companies have concluded they need to give the KAM program managers more autonomy and freedom in how they manage their accounts.
Category #2: Increased Marketing Support
The other major trend that we observed was that Marketing—a key resource in all the programs studied—had more than just a seat at the table in the higher performing KAM programs. By better leveraging marketing activities, these companies were able to significantly elevate their relationships within their respective KAM account. This heightened engagement took many forms, from highly customized and dedicated account intelligence initiatives to more focused campaigns. In effect, marketing was driving fully loaded, resource intensive programs aimed at discrete key customers – each individual KAM account.
Leveraging Greater Marketing Involvement to Attain “Trusted Advisor” Status
This enhanced role of marketing in managing the key accounts has helped a number of the programs either establish or significantly expand their “trusted advisor” status within the account.
What were some of the top programs doing to achieve this? A few key program activities stood out:
Keeping Pace with the KAM Leaders
In short, these top programs are giving their KAM program managers the autonomy and flexibility to act quickly and decisively in the best interest of their key accounts. In addition, they treat each account as a market of one—and some, as a business of one—that deserve the full palette of resources and activities with marketing squarely in the drivers seat. We recommend you consider some of these better practice approaches for your KAM program – your key accounts will thank you!
A blog by Matt Leary, Principal, Solutions Insights
This post is awesome. It has figured-out the most important topics always involved with any company. Through it, we all have something to remember and always to be proud of. Thanks for sharing all with us.
Your post is absolutely great! Like me, pretty much sure lot of your readers had a great knowledge after they read your post.:) Thank you so much for sharing this!
After reading this great blog in addition to the 8 critical success factors of KAM, I wanted to see how they apply to an actual company. I took the Solutions Marketing class at Hult International Business School. In class we studied a case on a well-known Real Estate company and I believe they have taken a good approach towards better KAM. They did an organizational realignment in which the traditional BU´s were dissolved and two new client-facing groups were created; Clients, that focus on marketing to and managing the firm´s relationship with large clients, and Markets, that would own their own specific major metropolitan areas and sell and market only in those spaces. When you assign a team to specific client companies you enable them to work very closely with them and try to address very specific needs. This company made KAM a priority and dedicated sufficient resources and tools to make it happen. The client team has roles and responsibilities that are solely focused on the key account; this fosters a closer relationship with the client and strengthens account loyalty. As the blog says, the KAM gave the new BU´s flexibility and autonomy to act quickly and decisively in the best interest of the key account.
I find this article insightful as it emphasizes the benefits of augmenting Greater Operational Autonomy with the enormous value available through the marketing unit. In my opinion, this allows managers to exercise entrepreneurial skills in keeping their accounts. The spotlight on the benefits of the marketing unit in being involved with phases of solution design through to sale is important. Hence, organizations have to refocus their strategies in order to optimize the resources in the marketing unit.
Three key takeaways after having read this blog entry, both of which complement the theory that we studied during our Solutions Marketing class: 1) Marketing department has a central role in ensuring that the company is solutions oriented - it has to ensure that the resources at the possession of the company are aligned with the customers, partners and internal organizations. This post stresses the increasing role of marketing department in supporting the activities of Key Account Management; 2) Account-Based marketing is rising in its importance - as more companies become solutions oriented, they realize the benefits that treating their most important customers as separate markets would bring. Hence, they try to design programs that would satisfy the needs of large accounts as effectively as possible; 3) It seems highly reasonable to 'detach' the Key Account units by giving them more responsibility, empowering them with more resources as well as treating them as separate financial entities with their own financial performance results. Ultimately, that would help to assess how effectively they have captured the needs of their largest customers. Overall, very insightful post.