In recent years many companies have implemented some form of Key Account Management (also sometimes called National Account Management, or Strategic Account Management) to address the needs of important customers.

Key Account Management (KAM) is a systematic process for managing key interactions and relationships with critical accounts. Writers sometimes quote the Pareto Principle to describe strategic accounts: 20 percent of the customers generate 80 percent of the revenue/profit. It's usually an apt comparison, although the numbers can vary dramatically if the supplier’s strategy has targeted emerging or medium-sized accounts. Nonetheless, key accounts tend to provide a disproportionate share of a supplier’s revenue/profit.

The supplier's future tends to be intertwined with these accounts' success. With customers whose contribution is that critical, KAM can play a crucial role in a supplier’s marketing strategy. That's why successful KAM tends to be a company wide initiative, systematically and proactively delivering strategic solutions to multiple contacts at targeted key accounts, in order to capture a dominant share over time.

Embrace KAM as a way to improve your company’s overall business performance. When a supplier, as is common, defines KAM as a sales initiative, the returns are limited. Everyone, not just sales, needs to own the strategic account. If other departments see account management only as a sales initiative, salespeople are likely to have an unrewarding, uphill battle.

Key Account Managers are salespersons who must generate profitable revenue, quarter-to-quarter and over the long term. At the same time, they are general managers, overseeing assigned relationships as separate assets in the customer portfolio. Businesspeople sometimes distinguish between salespeople who are hunters and those who are gatherers—those who get the business and those who manage the business afterwards. True Key Account Managers are both and neither of these classifications: they are hunters but within their assigned accounts, continually working to increase account share. They also must manage those account relationships, and be accountable for ongoing and long-term financial growth.

KAM has generally brought suppliers and customers closer together by addressing a host of strategic, structural, human resource, and process issues. Companies must develop strategies, structures, processes, and human resources that are responsive to the challenges presented by major customers as they make their procurement decisions.

Source: www.articlesbase.com