My Two Cents on Key Accounts Management

I read about Key Accounts Management Practice in year 2008 during my MBA. For me it was nothing more than a fanciful keyword, exclusively developed and derived by sales leaders to approach clients and woo them. I had plenty of questions in mind and they were continuously resisting my urge to accept it as a possible and probable sales approach. One of them was rationale of allocating higher budgets and costly manpower to cater needs of Key Accounts while leaving others unattended (I am sure that people will pardon me for being novice at that time). I was also shocked to hear that several activities are conducted by an organization to ATTRACT, ENGAGE and CONVERT these accounts into reality..which may never happen in reality. I tried finding reason behind its importance when I heard that Key Account Management Program is (or should be) directly administered by the senior management of the organization.. but the question was..WHY SO MUCH..??

The first person to rescue KAM Program was Vilfredo Pareto with his 80-20 Principal on unequal relationship between input and output..and I am not going to discuss it here further. He made me understand that why those 20% customers matter more than the remaining 80% of the chunk and yeah..!! his theory worked for me..Partially. 

The next thing was my stint with a couple of organizations I served. As Key Accounst Manager, I realized the potential of Key Accounts but observed that Pareto’s unequal distribution applies within Key Accounts also. This contradictory behavior turns organizational KAM Structure into an annular ring, where concentric rings (Key Accounts as per the values assigned) are moving in opposite directions reducing impact of KAM as an organizational practice.

It was indeed a great moment when I was Clear, Confused, Convinced and Cynical..all at the same time. I joined program based on Key Accounts Management Practices and they did provide me desired insight. We had long sessions where we discussed several aspects of KAM practices and the rationale’ behind it. From that point my entire focus shifted to Stakeholders' concept . That program reminded me of a famous quote by a very well-known artist in which he defines Courage as an attitude to keep oneself composed and confident.. even when stakes are so high. It also supported the fact that KAM practices increase your chances..when wind is flowing in opposite direction.

For me, Key Accounts Management came out as practice through which an organization can:

1. Keep growing even in difficult times;
2. Earn loyalty of Influencers through engagement programs run by the organization;
3. Outclass competition through effective branding and market presence;
4. Have a detailed and realistic market intelligence from the horses’ mouth which further helps in new product development

Finally, when I summarize my experiences, learnings and observations I see that Key Account management is not a new concept in India..its been followed since ages. There are several lobbyist in Indian and international politics (unregulated in India but regulated in US as per LDA 1995) who have devoted their life to their profession. Let’s not forget our Shrines where each and every pilgrim/visitor is hosted by bunch of Pundits for executing rituals and rites. These pundits ask visitors of their native place and their family lineage. After conforming details they direct visitors to connect to the assigned Pundit for executing rituals. The distribution is so clear and realistic that no-one experiences any type of discomfort during the process. This is another magnificent example of Key Accounts Management Practice in reality where each Account Manager (pundit in this case) has a set of clients defined on the basis of region, caste, culture and demography. This example adds two more points which enables organizations to:

5. Segregate potential accounts on the basis of their geographic location, potential business, segment and forecasted business in any FY;

6. Manage internal conflicts between teams through effective distribution of clients

Key Accounts Management comes with a set of pre-requisites which are critical to its success. Things to be followed while setting up a KAM Centre in an organization are:

1. Selection & categorization of Key Accounts must be dealt in a detailed manner;
2. In-depth understanding of business and possible customizations by each Key Account Manager;
3. Long term vision and a well-defined strategy and expected RoI;
4. Identification and allocation of Key Accounts to respective manager in a realistic manner;
5. A clear set of instructions for deselecting Key Customer shall be in place from day 1

When I analyze everything..it assures me of the success (though exceptions will always be there). The only thing a Key Account Manager must keep in his mind is:

“ITS NOT JUST A JOB, IT’S A LIFE”

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any agency. Examples of analysis performed within this article are only examples. They should not be utilized in real-world analytic products as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of any Indian government entity.