08 Feb The 3 Pillars of Key Account Management
Build your KAM initiative on rock-solid principles
Are you in charge of a true Key Account Management initiative?
By “true”, KAM initiative, I mean a programme that aiming at accelerating innovation and growth with a few carefully selected customers.
If this is the case, here is a very simple approach that can help you tremendously as you design, implement or improve your KAM initiative.
The principle is very simple to expose. A strong KAM initiative is always built on the following 3 Pillars: KAM infrastructure, Key Account Teams and Key Account Plans.
Let’s describe these 3 Pillars in a way that applies to any sector and is independent of the many specifics of a KAM implementation.
Our first Pillar is about the strategic scope of the KAM initiative and all the KAM-specific processes, systems, rituals and governance principles that enable the organisation to execute.
A true Key Account Management initiative comes on top of your usual sales and customer management activities. It is therefore normal that it requires a few specific processes. The crucial point here is to identify which ones. However, it is not about creating a heavy bureaucratic machine. May be some existing processes and tools can be adapted and enrich to accommodate the case of Key Accounts and their specifics. New, KAM-specific, processes should be created only where absolutely necessary. Lean thinking must drive their design.
Typical elements of the KAM Infrastructure are: the articulation of the KAM Strategy, the identification, evaluation and selection of Key Accounts, the design of a KAM methodology and the creation of the associated tool, processes and management rituals.
Building the KAM Infrastructure is also very much about Programme Management, Change Management and properly handling human factors such as alignment, collaboration, team dynamic and skills development. Defining how the initiative will be managed and with which resources is crucial. Will a Head of KAM be appointed? Who will be in charge of developing and rolling out the KAM processes and tools? How will the support functions such as HR, Learning & Development, Customer Service, Product Management, even sometimes R&D, be involved? An adequate attention must be paid to the development of new skills and new collaborative behaviours.
Of course creating the KAM infrastructure is not a one-off effort but a progressive one. Not everything must be created at once and the set of KAM-specific processes develops and evolves as the programme matures. As with any game-changing initiative, there are traps to avoid. The Charybdis and Scylla of Key Account Management are too much and not enough methodology. The most frequent mistakes are related to excesses or shortages in terms of processes, number of key accounts, and nature of the short- and medium-term goals. Even in an area like developing the adequate skills, excesses can be observed in the form of a too rich training delivered too early and as on one-off effort. This being said, a shortage of KAM skills development measures is far more frequent.
All in all, experiences shows that organisations who focus on carefully identifying their needs and building step-by-step the adequate KAM Infrastructure, casting an adequate balance between ambition and patience, have higher chances to be successful with KAM.
Implementing true KAM requires having performing Key Account Teams in addition to the central team chartered to manage the KAM Programme.
A Key Account Team is built around the Key Account Manager and is in charge of designing and implement the Key Account Plan. Core Team members are involved in the KAM operations. Extended Team members are involved more sporadically.
In the vast majority of cases, Key Account Teams are virtual teams. Belonging to the team is a part-time job, an assignment that comes on top of an existing job. This means that Key Account Team members do not report to the Key Account Manager but to somebody else. As a consequence, the time allocated to the KAM-part of their job and priority setting are sensitive topics and must be carefully managed.
In these situations where ambiguity is frequent and the necessity to arbitrate between priorities the norm, Key Account Managers and their Account Team must be supported not only with adequate processes from the KAM Infrastructure (role descriptions, resource allocation, managerial alignment) but also with specific processes, knowledge and skills that help create and maintain a true team dynamic.
In companies who have an established KAM practice (3 years and more) one can draw a line between those who use a systematic approach towards team dynamic and those where this is left to the talent of each Key Account Manager and to luck in terms of managerial support.
KEY ACCOUNT PLANS
The Key Account Plans materialise the implementation of a company’s KAM strategy. They are the instrument that ultimately bring the results … or not.
The standard elements of a Key Account Plan are as follows: Account profile, history, status of relationship and network of contacts, competitive analysis, opportunities, strategic & operational goals, tactics, action plan, dashboard.
In the real life, the above elements are not always present and, when they are, their form can vary a lot depending on how the KAM-specific activities complement the normal sales activities. For example, in many cases a Key Account Plan covers all sales activities. However, it is not rare to see Key Account Plans which are focused on developing sales in selected application domains while the more standard opportunities are managed through the usual sales model. In addition, seasoned KAM practitioners recognize that the relationship with a strategic customer must adapt to the specifics of each company. The KAM methodology must allow this flexibility and not force the management of a strategic relationship into a rigid one-fit-all model.
A universal challenge with Key Account Plans is their formatting and the management of their content. For most companies practicing KAM, this is a permanent point of pain. Excel and Powerpoint templates remain the norm as well as cumbersome update and communication processes. Only a small minority of companies leverage digital tools to create, share and update their Key Account Plans. Taylor-made or commercially available KAM-specific applications, most often offered as an add-on to CRM systems, are powerful instruments. However, they bring value only to companies who have already defined their KAM methodology and created the necessary level of alignment beforing rolling-out such digital tools.
All in all, a well-conceived and implemented KAM Programme equips Key Account Teams and other internal stakeholders with the adequate tool kit to design and implement strong Key Account Plans. It also provides guidance and coaching to reach a high degree of quality. As with the two other pillars, the method and tools for Key Account Plans must fit with the maturity of the KAM initiative. One again, it is about avoiding the deadly traps of too much complexity or of a too simple approach.
From our 3 Pillars of KAM, the Key Account Plan is probably the one that is most easily identified and understood by companies implementing KAM. Despite this, one can observe huge differences in the quality of implementation.
OUR ADVICE: BALANCE YOUR EFFORT ACROSS THE 3 PILLARS
Many factors must be aligned to succeed in KAM and this is no trivial task. Using the 3 Pillars as a guiding principle provides a solid base to people chartered to build and implement a KAM programme.
Our state-of-the art KAM Reloaded Methodology leverages the 3 Pillars approach and combines it with a few others powerful pragmatic concepts. Upcoming posts will expose some of them.
To see this article summarized in a visual that you can dowload, it is here
If you are designing or evaluating your KAM initiative and want to discuss how to approach this, get in touch!