What is the best way to ensure your Key Account Strategy fails?

This may seem a strange title for an article on KAM yet so many companies seem to be hell-bent on pursuing KAM strategies incorrectly that I thought I would start a thread that I hope will become the definitive “How not to…” guide for anyone setting up a Key Account Team.  Top mistakes I have observed companies make include;

Tags: Key Accounts | Key Account Management | KAM | Strategic Accounts | Strategic Account Management | Key Account Selection | Choosing Key Accounts

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One of the critical tools for managing and delivering a KAM strategy are those (usually software) tools that manage the entire customer relationship - towhit, Customer Relationship Management (CRM) Tools.  In the past I and others have been slightly disparaging about these tools, not because of any fault of their own, but more for a misconception of what they are.

Many companies still think that if they spend mega bucks on a CRM system they are doing KAM, this is often, sadly, far from the case.  CRM tools used correctly, are critical to the execution of your KAM strategy but they need to be established with considerable thought and planning.  CRM is a mindset, not a piece of software, used correctly and you will wonder how you ever managed without do, do it wrong and you will have just bought a nice five-bedroomed de-luxe mansion in Fool's Paradise!

Tags: Key Accounts | Key Account Management | Strategic Account Management | Key Account Selection | Choosing Key Accounts | Customer Relationship Management | CRM

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Having Mentioned Horse Racing in the title of this article, let me begin my mixing my metaphors.

Selecting Key Accounts for a Key Account Management Strategy is rather akin to playing Roulette.  In a game of Roulette, one has to decide where to place one's chips.  Clearly, we could guarantee a win by putting a chip on every number (assuming we had enough chips) yet that is clearly; a) Not a great Strategy and b) Hardly Key Account thinking in practice.  IN the game one is forced to decide, to commit and to select one number (or else a very small number of numbers) to which one is going to commit one's chips.

It is the same when pursuing a Key Account Management Strategy.  We are planning to commit a disproportionate number of resources (people, time, money) to service a small subset of our total customer base.  We have a very finite number of 'chips' to deploy and we need to do all we can to guarantee a win.  Moreover, we need to save our chips we might otherwise have gambled elsewhere, in order to have them to bet on the Key Accounts.  This is the real challenge of KAM.

You see, everyone is familiar with the idea of KAM being the selection of a small number of important accounts who are singled out for the 'Special Treatment'.  What is often overlooked is the much more difficult (and in many ways, more important) task of removing resources from many other, non-Key accounts so we can deploy them to the greater good. These resources need to be withdrawn and saved in such a way that they do not upset the non Key Accounts or make them feel that their business in any less important to us.

We have come across so many examples where companies have withdrawn funds and support from 'less important' customers only to find that they lose all that business (often very quickly).

Companies need a rationale for selecting their Key Accounts which has a structure, an underpinning process and a clear strategic rationale.  A Key Account Management Strategy needs to focus upon the following;

1) A clear rationale and process for Key Account Selection (if you think this is easy, think again.  If you think it is just the big ones think again twice).

2) A clear strategy for deployment of personnel and other resources across the customer portfolio.  A good rationale will divide customers into distinct segments (of which 'Key' Accounts is just one) and then strategies need to be devised to match the requirements of each sub-segment (e.g. where we will automate, where we will Proactively 'Hunt', where we will 'Farm', where we will discount, where we will raise prices.

There should be different price points and different propositions for each one of the customer types.

Although this process involves sorting perhaps a great many customers into smaller sub-divisions, it is not segmentation, at least, not in the classical sense.  That said, such a rationale works very well when applied in tandem with a classic market segmentation model because it allows for tailored and focused customer propositions to be made.

The decision to select Key Accounts according to a strict strategic rationale lies with senior management, who should embark on the selection process to determine which accounts are Key, which need future investment and which should have resources withdrawn (and how you are going to manage that service withdrawal).

Easy to say and, actually, fairly easy to do as long as short-cuts are not taken, assumptions are not made and egos are left at the door!

Then and only then, will we have enough chips to place our bets.

Tags: Key Account Selection | Choosing Key Accounts | Key Account Management | KAM | Strategic Accounts | Strategic Account Management

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Key Account Management means making tough choices

For some time now, Key Account Management (KAM) has been a popular strategy in many businesses.  We have written about this topic many times before but wanted to record here some additional thoughts as we still see many examples where organisations miss the point.

Tags: Key Accounts | Key Account Management | Strategic Account Management | Strategic Accounts | KAM | Choosing Key Accounts | Key Account Selection

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Meetings are a large and important part of Business.  Organised and executed correctly, meetings are a very effective way of communicating, brainstorming, bonding and strategising. A problem is that, often, people regard meetings as either a chore or a junket.  If the meeting is offsite, especially if it held at a nice country house hotel location, meetings are often viewed as a holiday from the office rather than a serious and important Business activity.  In this article, we discuss how meetings are not only very important but can also be very expensive (especially if not managed correctly).

Tags: Management | Organizing Meetings | Running Meetings | Meetings

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Management of Stress is a Strategic Differentiator

It is hard to turn on the TV or open a serious newspaper these days without coming across an article or piece about workplace stress. People often confuse the state of pressure with that of stress – this is simultaneously understandable and wrong. It is understandable because everyone realises that stress is bad and most people assign negative connotations to the term 'Pressure'. Yet, despite the apparent similarity between the two states, they are poles apart in terms of what they do to performance and well-being.

Tags: Stress | Stress Management | Management of Stress | Stress at Work

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From Mediocre to great, what differentiates great sales people.?

It is surely one of the great ironies of the selling profession that sales people are often described as being 'great talkers'.  Great sales people have to be effective communicators of course but the 'gift of the gab' can actually often be a hallmark of the poor sales person, not the great one.

Tags: Sales | Selling | Selling Skills | Sales Skills | Consultative Selling | SPIN

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In an age where businesses are being hit by a 'Perfect Storm' of Worldwide Economic Recession and dual effects of Internet technology making product/service comparisons seamless, easy and instantaneous and also enabling close-to-free global Marketing and Brand-building via Social Networking, e-Mailing and, well Blogging, it has become increasingly difficult for organisations to differentiate themselves and their offerings, to stand out from the crowd (who are often on the other side of the world) and make a clear and compelling value proposition to desired segments.

Tags: Key Account Selection | Strategic Account Management | Strategic Accounts | KAM | Key Account Management | Key Accounts

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Key Account Selection is everything

Whilst many books, journals, CRM systems and training sessions concentrate on the (very important) skills and processes of Key Account Management, one very critical component that is often overlooked is the selection of the accounts in the first place.

Tags: Key Accounts | Key Account Management | Key Account Selection | Choosing Key Accounts | KAM | Strategic Accounts | Strategic Account Management

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Key Account Management (KAM) has been one of the 'Hot Tickets' in many industries in recent years.  A blossoming industry has grown up in Books, Webcasts, Training, Consultancy etc etc etc around the area of Key Account Management.

Worthy as these products and services (often) are, too many Key Account Strategies fail.  There are many reasons for why this should be so but our experience has shown that failure is too often a consequence of not thinking things through adequately.  As the old maxim goes, 'fail to plan and you plan to fail'.

Tags: Key Accounts | Key Account Management | KAM | Strategic Accounts | Strategic Account Management

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Team Building is important but difficult

Pick up almost any Business book on Sales Management, Leadership or Strategy and you will doubtless find many references to the importance of teamwork and team-building. Laudable though these are in exhorting managers and leaders to develop, nurture and encourage a 'team culture' or 'shared ethos' within a group, many of them simply do not work. It is a sad fact that many 'teams' are not teams at all, many do not actually exist outside of the imagination (or, more often, wishful thinking) of the leader.

We have seen so many examples where a leader has asked for support for the 'team' only to find we were dealing with a collection of disparate individuals whose only common bond was that they were compelled to share the same physical space for 35 hours per week. In any other regard, and by any other metric, these were not teams, except for the fact that the leader hoped and wished they were.

Tags: Team | Team Building | Team-Building | Teamwork | Building Teams

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In an age where businesses are being hit by a 'Perfect Storm' of Worldwide Economic Recession and dual effects of Internet technology making product/service comparisons seamless, easy and instantaneous and also enabling close-to-free global Marketing and Brand-building via Social Networking, e-Mailing and, well Blogging, it has become increasingly difficult for organisations to differentiate themselves and their offerings, to stand out from the crowd (who are often on the other side of the world) and make a clear and compelling value proposition to desired segments.

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Losing your budget requires a new way of thinking
The ongoing Global Recession has already taken many casualties, jobs and companies are disappearing every day and the much hoped-for 'green shoots' of recovery still seem a long way off.

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