Key account management (KAM) is one of the most significant advances in selling during the last two decades. KAM is a totally innovative organisational approach used by B2B suppliers to manage relationships with strategically essential clients, and it provides demonstrable business benefits.

Smart suppliers, predictably, are eager to implement KAM. However, many KAM implementations fail and are dropped. In other circumstances, suppliers discover that they must make significant adjustments to the KAM programmes in order for them to perform.

The good news is that many of these blunders are avoidable. This is a significant shift, but the odds of success can be greatly boosted by following the seven stages outlined below:

Step One: Understand that KAM is a business transformation, not a sales strategy. Implementing KAM takes years, not months. Companies that have effectively implemented KAM were those who saw it as a transformation in the way they did business, rather than something limited to the Sales department. Suppliers who fail at KAM tend to perceive it as a sales department project. This strategy is guaranteed to fail.

KAM is a commitment to operate differently with select priority clients, and other supplier divisions must understand and support KAM in order to achieve this promise. Supply chain management is a prime example. If a critical account is promised priority access to vital items or services, it is Operations, not Sales, who can offer it. Best-practice firms teach their operations and supply chain personnel, as well as their sales personnel, in KAM.

Step two: Get high-level support. A major organisational change of this nature necessitates high-level endorsement, preferably from the C-suite. Rolls-Royce and Siemens, for example, have high-level sponsors for each of their main accounts. Siemens’ main board members, including the CEO, each sponsor a number of key accounts and visit them on a regular basis.

Step Three: Appoint a KAM champion. After the organisation has agreed that it is starting a big shift and senior management understands and supports KAM, the next stage is to identify someone who will champion the KAM programme and drive its execution. This is usually someone higher up in the organisation, and it helps if they report directly to senior management, at least for the duration of the project. As a result, KAM is elevated to the top team agenda, and the champion receives the necessary backing to effect change. Your KAM champion should be enthusiastic about KAM, with strong influencing skills and boundless energy.

Step four: Carefully identify your critical accounts. To get the KAM programme up and running, you must first identify some key clients and create an offer that differentiates them from the rest of the customer base. Starting small is sound advice here. It is easier to add customers to your KAM programme than it is to ‘demote’ clients once they have been designated as important accounts. In general, the number of critical accounts should be kept to a minimum.

Step Five: Identify and train key account managers. Several businesses make the mistake of just promoting their top salespeople to critical account manager positions. That is a mistake because KAM is about transforming the way people work, not just selling. Changing your top salespeople to key account managers may imply that you’ve placed a large number of individuals in roles they aren’t particularly fond of, and you’ve just lost your finest salespeople as a result. In fact, there are technical and project managers who can create excellent KAMs. You must consider what the function requires (a wide range of talents, including financial, consulting, planning, interpersonal, and influencing abilities) before selecting the best person for the job. Don’t forget to train them: Very few people enter a KAM role with all of the necessary abilities.

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Step Six: Determine the appropriate metrics. What is measured becomes managed. If you have assigned your main account managers with developing long-term relationships with their customers, do not continue to compensate them as if they were performing a conventional sales job. Conventional sales measurements, such as customer interaction time, are meaningless to KAM. Many key account managers spend a significant amount of time within the supply organisation managing key accounts on behalf of the customer. If you compensate your key account managers based on top-line revenue, you may expect them to prioritise short-term sales above long-term value creation. The lifetime value of a client (the customer bottom line) is the correct statistic for a key account manager, not top-line revenues. This is a crucial point: Important account executives often focus on larger projects for larger clients. Some of these transactions can be so large that the supplier company would suffer significant financial harm if they went bad. As a result, the key account manager must grasp the cost to serve as well as the top line.

Step 7: Measure and build. Your key account programme should evolve over time. Instead, you should keep it up to date. One method is to add new key accounts to the software (and occasionally move former key accounts out if they no longer match up). Another method is to actively seek best practices both within and outside of your organisation.

KAM can have a significant impact on the supplier organization’s success. Yet getting there demands a different approach. These seven steps will assist your business in successfully transitioning to KAM. It will be difficult, but it will be worthwhile.

The Bigger Picture: A Path to Success

KAM can dramatically impact a supplier organization’s success. However, achieving this requires a shift in mindset and strategy. By viewing KAM as a comprehensive transformation, businesses can position themselves for sustainable growth.

If your business is just getting started, consider the broader framework required for scaling. For instance, establishing a strong foundation by focusing on critical administrative steps—such as ensuring you Register a LLC—can help align your structure with future growth initiatives like KAM.