Key Account Management Planning

Structured criteria to select and categorize key accounts
Profitability potential from selected customers
Business opportunities that derive from an external and internal analysis of the client

Key account management
What this session covers
 The definition of a key account
 Different types of key customer relationship
 The key customer portfolio
Definition of a key account
 Definition
A key account is a customer that is of strategic importance to the supplier (McDonald and Woodburn, 2007)
 How KAM emerges
Globalizationa few major players began to emergebig global customers
International suppliers‘Tier 1’ suppliers
Local suppliers‘Tier 2’ suppliers: suppliers who deal indirectly through the Tier 1, suppliers
A major global customer wanted their suppliers to provide them with an individual (a key account manager) or a team (a KAM team) to look after all their business worldwideto reduce the expense and trouble of managing different suppliers in different regions
 The role of the key account manager
 The role of the key account manager or KAM team is to co-ordinate the internal processes of the customer and ensure that a seamless service is provided to the customerdifferent from the traditional sales role
 Key account managers are often measured on a ‘customer P&L’; that is, on the profit that the firm makes overall from its relationship with a customer
Traditionally, sales people are paid according to volume of sales
 Definition of KAM
 Definition
An integrated process for the profitable management of customer relationships (McDonald and Woodburn, 2007)
To service the customer, supplier processes need to be aligned, all the way from purchasing and operations management through to delivery and finance
 By treating major customers as priority, major customers can be better served, making companies more profit
 When suppliers introduce KAM
Increase share of customer spend, which increase their revenues
More efficient to