From the course: Key Account Management

What is key account management?

From the course: Key Account Management

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What is key account management?

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- Key account management, or KAM, is a systematic approach to managing and growing a set of an organization's most important customers to maximize mutual value and achieve mutually-beneficial goals. Now, I know that's a mouthful, so let me simplify it by telling you what KAM is not. Key account management is not just selling more stuff to big accounts. If you approach it that way, you put your company at risk of losing long-term profits. To stay successful, companies need to generate cash so they can invest in R&D and other programs. A strong key account management program can generate that cash over many years, if it's managed right. I want you to think of key account management as a way to be involved in as many places as possible with your customer, where you add value. You have to look at every part of your customer's business. I'm talking about marketing operations, R&D, and so on. And then ask yourself, how can our company make those areas more successful? Now here's the catch. You have to implement programs to help your clients succeed, but that you may never get directly compensated for. That's right, you may have to spend resources in a way that helps your client, but you're not reimbursed for it. So why would you do that? Well, if you selected the right accounts and you take aim to keep those accounts for a very long time, your company will benefit handsomely. In key account management, you need to take the long view. A short-term expense today is worth the long-term profitability into the future. Here's an example. Let's say your company has a strong advertising department, and it's mastered ways to link social media with traditional advertising. The department has some superstar employees who are really good at this. As a key account manager, you learn that your client is considering venturing into this, but doesn't know how. Imagine if you arranged a half-day training program that your advertising colleagues deliver for your client, teaching them the ropes. Do you think your client would be grateful? Absolutely. And therein lies the real magic of key account management. Think of it as doing a series of favors for your client over and over, and then taking credit for those favors in the right places and at the right levels, so that your company will be seen as an indispensable partner, never to be replaced. If you do that, your company will grow and flourish just as much as your clients.

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