How to Implement Key Account

Management
A framework for success

Presented by:
Warwick Brown
 Hello World!!
A strong account management solution driven by purpose, supported by process and skilled through
practice will accelerate the trajectory of your growth, deliver your objectives and respect your values.

The transformation from supplier to trusted advisor and true partner of your clients begins with a
framework and follows through with a strategy to succeed

Warwick Brown
Founder & Consultant at Account Manager Tips

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 Define Key Account Criteria
Establish systematic processes for selecting key accounts

Segmenting your customers will help you identify those clients that not only require
significant investment to manage, but also offer significant potential rewards.

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 Segmentation by Volume
The simplest segmentation is by client size, based on how much they spend with you.

Large
Your top 20% of customers. Major accounts are not
always key accounts.

Medium
The next 40% of customers. Look for clients with
future growth prospects.

Small
Your lowest 40% of customers based on transaction
volume or spend. Very few clients are key accounts
because of limited no return on investment for key
account management.

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Segmentation by Geography
Geography can bring additional perspectives to your segmentation.

Global
Clients who’s business you have in multiple countries
in multiple regions around the world.

Regional
Clients who you have their business in multiple
countries within a single region (e.g. LATAM, EMEA,
APAC)

National
Domestic clients

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 Who Are Your Most Valuable Clients?
Establish selection criteria for key accounts. Look beyond spend to other factors like harmony and value
creation. There should be a yearly process for selecting and de-selecting key accounts.

Evaluate clients based on their

commercial appeal and opportunities
to expand revenue and improve
margin.
GROWTH

Evaluate clients based on their Evaluate clients based on how well

partnership orientation. To what extent they fit your solution, your culture and
will your clients invest in the relationship your business strategy.
and view you as a strategic supplier?
VALUE HARMONY
CREATION

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 REMEMBER:

Key accounts are your most valuable

customers, not always your largest

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 Organizing for Key Account Management
Not all clients are created equal

Design your account management solution and relationship models around client
complexity and commitment. Give your most time, attention and resources to your key
accounts.

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 Client Requirements
Let growth and strategic value guide your account management strategy.

High
KEY ACCOUNTS
Strategic value and partnership orientation

LARGE ACCOUNTS
ACCOUNT GROWTH
Drive volume. Vendor relationship.
AND STRATEGIC
VALUE

MEDIUM ACCOUNTS
Middle-market accounts with
growth potential

SMALL ACCOUNTS
Vendor relationship
Low

Low High

SERVICE & RELATIONSHIP REQUIREMENTS

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 Account Management Tiers
Global Account Manager

Orchestrates strategy across

Strategic Account Manager multiple markets

Creates a vision for the

client’s business and how
you can help them perform
better.

Account Manager Key Account Manager

Understands what you do Understands what the client does

with your client.. and how your solution can support
their business

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 Account Management Tiers
Design your account management solution based on customer complexity

Alignment Tasks Client Access Resources Tier

Vendor Provides product Limited to lower Product is most Account Manager
and/or services levels and important
gatekeepers
Preferred Provider Provides products Low and middle Product and some Account Manager
and/or services levels value added services Plus*
Business Consultant Provides consulting To all or most levels Products and Key Account
to help customer services, value Manager
meet business goals added services and
consulting beyond
products
Partner Provides consulting To all or most levels Products and Strategic Account
to help meet mutual services, value Manager
business goals added services and
consulting beyond
products
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* Add some valuable services to your standard account management package (e.g. a strategy session) and offer it to potential key accounts and to former key accounts to help them transition.
 Account Management Perspectives
Business relationships evolve and change, Vary the depth and scope of account management to align with customer needs.

Depth of client complexity and commitment

Preferred Provider Business Consultant Partner
(Account Manager) (KA Manager) (SA Manager)
Value Focus Current share-of-wallet and its predicted Future share-of-wallet customer lifetime Wallet dynamics of the extended value
growth value network
Value Creation

Value Identification Account reviews with procurement – Consulting probing – ongoing Joint strategic dialogue across the
Scope of Account Management

quarterly network – ongoing

Value Specification Account plan internally developed and Value proposition crafted for and offered Business case jointly developed and
agreed upon to the customer validated with the customer

Value Realization Hand-off to operations/fulfilment Value-adding oversight regarding Marshalling resources and orchestrating
operational execution activity internally and externally

Risk Focus Current share-of-wallet Customer relationship and its lifetime Total value network dynamics that could
Risk Management

value affect the business

Risk Assessment Anecdotal information on competitive Comprehensive analysis of future trends Joint and fully transparent examination
encroachment affecting buying behavior of networkwide vulnerabilities

Risk Reduction Extended contracts, preferred pricing, Higher switching costs due to higher Shared governance over intervention
executive outreach integration, top-to-top engagement measures
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Source: Customer Centric Leadership: How to Manager Strategic Customers as Assets in B2B Markets, California Management Review VOL 55, NO 3, SPRING 2013
Customer Relationship Models
The Bow-tie account management

• Principal contact between two people – the

account manager and the buyer.
• Simple, low cost and high degree of control.
• Attempts to gain access to other contacts may
be seen as a threat by the buyer.
• Messages from other functions may be
misinterpreted.
• Projects and activities held up by account
management/purchasing bottlenecks.
• Over-reliance on one relationship. When the
account manager moves on, the partnership is
at risk.
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Customer Relationship Models
One-on-many account management

• Account manager establishes direct contact with

other people within the customer.
• Useful model for the early stages of the
relationship to open doors, make first
impressions, get noticed and achieve quick wins.
• Interacting with a broader range of functions
improves understanding of customer’s needs.
• Provides insight into performance criteria beyond
the purchasing team.
• Account managers continue to work alone but
now represent the organisation across a wide
range of functions and issues. Risk of overwhelm.
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Customer Relationship Models
Diamond team account management

• Individuals on the supplier side form a team with

their counterparts on the client side.
• Contacts are secured at all levels, from operational
to senior management.
• Collaboration speeds the pace of joint activities.
• KA manager’s role is one of coordination.
• Focus is on nurturing the business, account
growth and planning for the future.
• Managing relationships and maintaining
communication can be daunting. Risk of functions
working to their own agenda.
• Creating a diamond team involves more people,
more time and greater cost. 15
 Key Account Management Framework
The essential elements of a successful KAM program

Explain, define and describe your key account management strategy and explore the full
scope of KAM.

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 Implementing Account Management
The essential elements of a successful KAM program.

People Aspects Structure and Processes

How will you recruit, train, develop, coach and 6 1 Define the KAM role and team structure. Identify
motivate your team?? what needs to be done and how. How does the rest
of the organization interact with KAM?

Value Based Business 5 2 Metrics and Profitability

How will you become a trusted partner? What are Decide how you’ll measure KAM performance
the sales and account management activities that and customer profitability. How will you calculate
create value for your client? targets and track progress?

4 3
Culture and Leadership Account Planning
How will you communicate the KAM mission to the Establish a key account planning system
wider organisation? Can you improve collaboration that allows you to develop and implement
across business units, help them understand your strategies client by client.
clients better and develop new ways of working?

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 1. Structure and Process

• Industry insights • Policies and procedures

How do you track and monitor trends in your industry? Is there a set of guidelines and procedures that explain how KAM
works?
• Customer industry insights
How do you track and monitor trends within your customer’s industry? • Alignment with sales
• Service levels Do the sales teams understand what key account managers do? Are your
processes lined up with theirs?
Define the service levels for KAM and how they’ll be measured.
• Alignment with Marketing
• Segmentation and portfolio
How will your team work with marketing? What support do you need to help

management with customer retention and growth (and how much budget should be
allocated).
Have you segmented customers and identified different types of key
accounts? How often will you review criteria and evaluate clients? • Consistency internationally
• KAM resources Are objectives, plans, resources and procedures the same in other countries
or markets? How can you align to ensure the client experience is as
What hardware, software and other resources are needed to deliver
consistent as possible.
KAM and grow your client’s business?

• KAM Teams/Support • IT support

Do you have the right data and reporting in place? Are there any
Do you have admin/support teams to help your key account managers 18
enhancements needed to existing tools that may require development?
operate effectively?
 2. Metrics and Profitability

• Business case • Target and objective setting

How will you develop strong business cases to secure additional Are key account strategies, objectives and targets clear and aligned across
resources and investment when you need it? the entire organisation?

• Client feedback • Share of wallet analysis

Are customer feedback loops in place and are they aligned to quantify How do you estimate the opportunity to capture more of your client’s
performance? activity?

• Client profitability • Business reviews

Are you able to generate a profit and loss for each key account? How How is the client’s performance tracked and reviewed (i.e. spend,
will you calculate profitability? transactions, service level agreements and key performance indicators).

• Benchmarking
How do you benchmark your key account management performance
against other industries and organizations?

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 3. Account Planning

• Plan template and structure • Plan evaluation

Do you have a key account plan template? How regularly are plans reviewed and input sought? Are they internal,
external or both?
• Client specific value
Does the template enable customer specific insights, strategy and value • Action plans
proposition development? Does the key account plan expect the account manager to outline clear
strategies and the actions required to achieve them? How will these be
• Client insights tracked (e.g. project management software?).
Does the plan encourage account managers to understand their client’s
long term strategy and associated analysis (e.g. SWOT, PEST). • Progress tracking
How often do key account managers meet with team members to ensure all
strategies and actions are completed? Should senior managers be involved?

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 4. Culture and Leadership

• Customer centricity • Internal communications

How do you stay focused on your client’s needs and develop new ways Do you have a formal communication strategy to engage with internal
of working that meets them. stakeholders and keep them informed?

• Commercial leadership • Account Managers as experts

How will you prepare your team to be commercially focused? Are your team highly regarded professionals? How can you elevate their
standing? Industry events, associations, courses, mentoring etc.
• KAM champions
Have you got the buy-in of your senior executives and are they • Organizational knowledge and
champions of key account management?
understanding of KAM
• Executive Sponsor Program Does the whole organization understand what key account management is
Will you invite your top management to be involved with your key and how each business unit contributes to its success?
accounts? An executive sponsor program assigns members of your
leadership team to a key account. They will be involved in developing
and implementing strategy as decided by the KA manager.

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 5. Value Based Aspects

• Managing conflict and negotiation • Relationship management

Do you have risk management models in place? Are your team skilled at Developing influential relationships with decision makers, budget holders
dealing with conflict and leading negotiations? and influencers is vital. Are there processes to identify, connect and engage
with key stakeholders and how will you measure the quality of your client
• Sales processes networks. Are your account managers competent at relationship
Will you use any methodologies to manage the sales cycle (e.g. BANT, management?
MEDDIC, SPIN). Are your KAM processes aligned with your Sales
processes? • Value based pricing
Conversations with clients should always be centred around the value you
• Value added services and solutions provide so price becomes relative. Are your teams capable to negotiate
Do you offer bespoke offerings? How are these packages developed. value based pricing?
Are there any account management activities you could monetize (e.g.
additional reporting).

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 6. People Aspects

• Personality type • Identifying and appointing

Will you select key account managers according to their personality Is there a defined process for selection, recruitment and appointment of key
type (e.g. Myers-Briggs)? account managers?

• Background and expertise • Training and coaching

What is a ideal candidate profile in terms of employment history and Are there adequate training, coaching and development programs in place
previous experience? for key account managers?

• Skills and competencies • Performance monitoring

What are the skills required to fulfil the different key account manager How are key account managers measured? How does personal performance
roles? link up with the overall KAM strategy?

• Reward structure
Decide target compensation for key account managers including annual
salary, incentives and other rewards.

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 Key Performance Indicators
How to measure KAM performance

Process Driven Results Driven

Qualitative insights that measure the interaction between the supplier and Quantitative insights that measure financial performance and relationship
the customer. Process quality and efficiency, information sharing, solution quality. They should include a blend of short term accomplishments and
development and role performance. long term goals.

Product/service mix optimal Revenue growth

Cost to serve Profitability

Account plans in place and progress made Customer satisfaction

Quality of internal relationships Customer loyalty/retention

Top management commitment Relationship quality

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 Implementation
Change management is the secret to successfully launching key account management.

Key account management is a different way of working. Engagement, communication and

senior management support are essential to gain momentum with your KAM program.

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KAM Implementation Milestones
Design your strategy, define capabilities and manage change

Conduct an internal/external audit Training and coaching

Why do you need key account management? Be Create training programs to develop key account
clear about want KAM to achieve, current gaps and managers.
potential obstacles.

Form a steering group Quick wins

Develop a cross-functional team with executive Generate account plans that drive growth. Use these
sponsorship to define what is a key account. as case studies. Seek customer testimonials for
evidence of the impact of your KAM solution.

Create a vision Build on success

Use the KAM framework to develop a strategy, define Engage with more middle/senior management to
actions to build your key account management solution. communicate systems and talk about successes.
Pilot with a few selected accounts to test.

Engage and communicate Embed

Connect with the wider business to explain the case Continue to refine and review your strategy on a
for change and seek buy-in from key stakeholders. regular basis until KAM is understood and
embedded across your organisation.

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 KAM Implementation Checklist
PRE-LAUNCH POST-LAUNCH
 Our senior managers have really bought in to KAM  We have increased our share of key customers' spend
 We have defined selection criteria for key accounts  Revenues from key customers have grown faster than revenues from non-key
 We have clearly identified our key accounts as separate from other accounts customers
 We have individual account plans  Costs to serve key customers have grown faster than costs to serve non-key
 We have someone who is the KAM champion within our company customers
 We have appointed specialist key account managers  The profit margins on key customers have increased
 We have fully trained key account managers  Our relationships with key customers have improved
 We have specific targets for key accounts  Our customer satisfaction ratings with key customers have gone up
 We have KAM teams that deal with individual accounts  Our retention of key customers has improved
 We have developed specific motivation and reward schemes for KAM  We have obtained increased advocacy (word of mouth recommendation) from our key
 We have well-developed feedback processes with key customers accounts
 The top management in the company have an active involvement in Key Accounts  The amount of shared investment (e.g. joint projects or shared innovation) with key
 We have changed our organization structure to accommodate KAM accounts has increased
 We benchmark against other organizations about KAM
 We have established specialized policies and procedures for handling key accounts
 We have completed a pilot with a few accounts to test the KAM model.
 Our KAM managers have good access to internal resources
 Our key accounts have higher service levels than non-key accounts
 We have joint activities with key accounts (e.g. process improvement)
 We have joint investment in relationship between supplier and key account
 We measure the performance of our KAM program
 We have IT support systems for our KAM program
 Everyone in our organization is educated to understand the KAM program

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 Lao Tzu

The journey of a thousand miles begins

with one step

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 Additional Resources

Whitepaper: Which resources and capabilities Whitepaper: Competencies of Strategic

underpin strategic account management? Account Managers

Research: Key Account Management Performance, Case Study: Implementing KAM at 3M

Measurement and Rewards

Research: Customer-Centric Leadership: How to Worksheet: Key Account Scoring Matrix

Manage Strategic Customers as Assets in B2B
Markets
Framework: C.A.R.E. Key Account
Management Model

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