Key Account Management Sales Strategy Training | Sales Management Training | Key Account Management
Managing powerful customers profitably is perhaps the biggest issue facing suppliers today. One major response from most organizations is to put pressure on their suppliers because it is the easiest and quickest way to increase margins which are under pressure is to cut the price paid for external goods and services.
The problem with this approach, however, is that price cutting is finite whereas value creation is infinite and is limited only by our creativity and imagination.
So increasingly, purchasing manager are beginning to take account of the potential benefits of fostering a small number of truly strategic relationships with a privileged group of suppliers. Such relationships, however, are few and far between, because no organization has the time or the resources to align their R & D, purchasing, manufacturing, logistics, information technology (IT), finance, service, and other functions with the equivalent functions in their customers’ businesses in anything other than a few, special cases.
When it happens, however, our research has shown that such relationships are the wellspring of profitability for both parties and totally justify the effort.
Key account management (KAM), then, is without doubt the major challenge facing business today and is fraught with difficulties in conceiving, planning, and implementing it, involving, as it does, organizational change. With over years of experience dealing with buyer/seller, we know what are the requirements for successful Key Account Management (KAM). Without doubt, one of the biggest barriers is the type of people who are asked to implement KAM programmes, for KAM is as different from selling and sales management. Our experience over the years has shown us that key account managers must be experienced senior executives, fully trained in analytical techniques, financial analysis, strategic planning, political and interpersonal skills, and indeed, the very skills required by a successful general manager or chief executive officer.
The point we are making is that it is most definitely not a sales role and people who are trained to sell and who are rewarded accordingly rarely make good key account managers.
The purpose is to set out in a no-nonsense way what a top-notch key account manager needs to know and do in order to build profitable relationships with powerful customers. This inevitably means spending time on analyzing the customers’ businesses and DNA prior to producing a strategic plan guaranteed to build profitable relationships for both parties. It will focus on putting together strategic plans for key accounts prior to implementing the first year’s plan. The good thing about not having a strategy is that failure comes as a complete surprise and is not preceded by a long period of worry and depression. It is amazing to us how many major accounts are lost because the supplying company has little more than sales forecasts and budgets for 1 year only and how surprised they are when they are dropped in favour of another supplier who has taken the trouble to work out a longer term strategy for working together.
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