| Having Mentioned Horse Racing in the title of this | | | | Companies need a rationale for selecting their Key |
| article, let me begin mixing my metaphors. | | | | Accounts which has a structure, an underpinning |
| Selecting Key Accounts for a Key Account | | | | process and a clear strategic rationale. A Key |
| Management Strategy is rather akin to playing | | | | Account Management Strategy needs to focus upon |
| Roulette. In a game of Roulette, one has to decide | | | | the following; |
| where to place one's chips. Clearly, we could | | | | 1) A clear rationale and process for Key Account |
| guarantee a win by putting a chip on every number | | | | Selection (if you think this is easy, think again. If you |
| (assuming we had enough chips) yet that is clearly; a) | | | | think it is just the big ones think again twice). |
| Not a great Strategy and b) Hardly Key Account | | | | 2) A clear strategy for deployment of personnel and |
| thinking in practice. IN the game one is forced to | | | | other resources across the customer portfolio. A good |
| decide, to commit and to select one number (or else a | | | | rationale will divide customers into distinct segments (of |
| very small number of numbers) to which one is going | | | | which 'Key' Accounts is just one) and then strategies |
| to commit one's chips. | | | | need to be devised to match the requirements of |
| It is the same when pursuing a Key Account | | | | each sub-segment (e.g. where we will automate, |
| Management Strategy. We are planning to commit a | | | | where we will Proactively 'Hunt', where we will 'Farm', |
| disproportionate number of resources (people, time, | | | | where we will discount, where we will raise prices. |
| money) to service a small subset of our total | | | | There should be different price points and different |
| customer base. We have a very finite number of | | | | propositions for each one of the customer types. |
| 'chips' to deploy and we need to do all we can to | | | | Although this process involves sorting perhaps a great |
| guarantee a win. Moreover, we need to save our | | | | many customers into smaller sub-divisions, it is not |
| chips we might otherwise have gambled elsewhere, in | | | | segmentation, at least, not in the classical sense. That |
| order to have them to bet on the Key Accounts. This | | | | said, such a rationale works very well when applied in |
| is the real challenge of KAM. | | | | tandem with a classic market segmentation model |
| You see, everyone is familiar with the idea of KAM | | | | because it allows for tailored and focused customer |
| being the selection of a small number of important | | | | propositions to be made. |
| accounts who are singled out for the 'Special | | | | The decision to select Key Accounts according to a |
| Treatment'. What is often overlooked is the much | | | | strict strategic rationale lies with senior management, |
| more difficult (and in many ways, more important) task | | | | who should embark on the selection process to |
| of removing resources from many other, non-Key | | | | determine which accounts are Key, which need future |
| accounts so we can deploy them to the greater good. | | | | investment and which should have resources |
| These resources need to be withdrawn and saved in | | | | withdrawn (and how you are going to manage that |
| such a way that they do not upset the non Key | | | | service withdrawal). |
| Accounts or make them feel that their business in any | | | | Easy to say and, actually, fairly easy to do as long as |
| less important to us. | | | | short-cuts are not taken, assumptions are not made |
| We have come across so many examples where | | | | and egos are left at the door! |
| companies have withdrawn funds and support from | | | | Then and only then, will we have enough chips to |
| 'less important' customers only to find that they lose all | | | | place our bets. |
| that business (often very quickly). | | | | |