Key Account Management McDonald and Rogers (2000)

Changing world of Personal Selling Transaction focused Hard Sell techniques to close the sale (see Yr. 1 notes) DMU theory considers the way decisions are made inside the organisations –Users, Influencers, Deciders, Approvers, Buyers, Gatekeepers (Webster and Wind 1972) RM shifts emphasis to long-term retention, growing business together

Globalisation –fewer, larger customers –opportunities for growing together Mature Markets –intense competition –price led ‘re-commoditisation’ –importance of retaining and developing existing business resulting in Customer Power –demanding sophisticated, bespoke solutions

Key Accounts Identified as part of Strategic Planning 80/20 not just the biggest but the best potential using BCG/GE/McKinsey matrices –market growth/ market share –market attractiveness/company strengths

Identify target segments Select compatible partners Analyse their strategic plans to understand how you can/do add value to their activities

Stages in KAM Pre- –prospecting, bidding for business Early –one of many suppliers (price-led) –contact only through sales - buyer depts Sales Buyers

Stages in KAM Mid- –preferred supplier (over 50% share) –regular interaction between staff in many depts but account manager still the main contact –some degree of trust and commitment –but alternatives and exit strategies still considered

‘Gone are the days of the expense account lunch, instead the KAM executive will organise skittles, tennis or golf tournaments to strengthen the web of transactions between the two companies’

Partnership KAM 100% share, commitment for 3-5yrs Open-book sharing of information, expertise, testing of innovation, joint marketing campaigns Full alignment of all departments Account Manager Main Contact Steering, coordinating role

Synergistic KAM You can’t see the join teams from each organisation work together on projects long-term decisions made jointly

More likely to be found –in complex products which are tailor-made –Where quality is vital (safety, legal, competitive advantage reasons) –stable industrial markets (not fashion-led)

Why things go wrong Change of key personnel Breach of trust Failure to deliver expected quality Cultural mismatch Changing markets Financial problems

What makes a good KA Manager? Personal –integrity, resilience, likeability Knowledge –product, market, financial, legal, cultural

Thinking skills –creative, flexible, strategic, lateral Managerial –listen, persuade, lead, –credibility, admin.

Selling is less than 10% of the job Social skills –gain networks within the buying company –organise events for the two staffs to meet & mix –build formal or informal multi-disciplinary teams to improve service but never forget it is about making money