Two of a kind – Key account management and managing key accounts?
We have recently been involved in workshops with several leadership groups with others coming up in Montreal and Berlin.
One of perspectives we’ve identified as being essential for success is the notion that key account management is not the same as managing key accounts.
The two are close members of the same family but not identical twins.
Managing key accounts requires excellent account managers, strong value propositions and the application of essential relationship building and commercial skills. It’s about cementing and ideally growing business with a handful of selected accounts.
Managing key accounts is part of – and an important part of – key account management but this is a broader philosophy and set of disciplines.
Key account management is a leadership activity.
Portfolio management. Key account management requires the identification of partner accounts for development and the allocation of the right resources to these. But it also requires the identification of those customers where applying more efficient approaches can release margin. The focus here is not so much growth of business with these customers, as freeing up monies to be invested in other better placed ‘development accounts’ – customers that have the potential to one day become significant partner accounts.
In some cases, it may require cutting down the range of services offered or even turning down some or all business with a particular customer. Don’t expect sales managers or account managers to do this themselves, they very likely will fear loss of rewards and status that appear to go with this.
Enablers: Introducing disciplines, infrastructure and reward systems are also essential elements of key account management. Again, any key account manager cannot be expected to sort such enablers out for the whole of their organisation. They are focused on their target account or accounts.
Long term perspective: Whilst key account managers can be expected to plan and plot the long-term growth of working with a partner account, they shouldn’t be expected to see this within the overall strategic priorities of the organisation. Perhaps the nature of business with ‘their’ key account isn’t in the future sweet spot of where the whole supplier organisation is seeking to go.
Key account management isn’t something that should be delegated to key account managers – however strong they are. Active leadership involvement and shaping is required to deliver the exceptional results – research suggests margins can be doubled – that well executed key account management delivers.
Alistair Taylor: Managing Partner – Brightbridge Consulting