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KEY ACCOUNT MANAGEMENT

Adedoyin Adebayo
Definition of Key Account
Key Accounts are the 20% of customers who provide
80% of your profits

Key Accounts are defined as the prospects or existing
customers who have the potential or now fall in the
80/20 category.

Any customer that is of strategic importance to your
company loss of it of inability to secure potential
future revenue would cause a significant impact.
KAM Status
Complex buying behaviour- large decision making units

High sales potential

Long term alliance or partnership


ACCOUNTS
20%
80%
PROFITS
80%
20%
80% N28K
20%
N110K
N138K
A Customers
Sales
N28K 80%
20%
N110K
N50K
Undeveloped
Potential
N188K
N160K

Without Key Account Selling
If we cannot demonstrate our value to
our top 20% Key Accounts - in terms of
increased profits (for them) - we will be
classified as a commodity supplier and
run the risk of losing our business to a
cut rate competitor.

What has it to do with 80/20
principle?
Understand who are your 80/20 customers,
their needs and profile
Redeployment of sales efforts and resources
Understand your own ranking, positioning,
growth potential or 80/20 status in your key
customers suppliers profile seek
improvement adopt aggressive growth
strategy

Redeployment of sales efforts
and resources
High value customers should be treated
differently from the average
customers
They should receive a disproportionate
share of resources and are worthy of
greater managerial attention
Cautions for Key Account
Management
Too many eggs in one basket
Insufficient benefits to the distributor
Insufficient benefits to the potential key
account
Limitation of opportunities
Cost and Bureaucracy
Significant organizational change
Selecting Key Accounts -
Criteria
Direct Sales Revenue and Profit
Current Sales Revenue
Current Profits
Future Sales Volume and Profit
Financial Security
Acquisition Potential
Key account effort on firms likely to be acquired may be
wasted if the acquiring organization is given the
dominant procurement responsibility
Selecting potential acquirers as key accounts may bring
long-run benefits
























What is Key Account Selling?
Selecting Key Accounts -
Criteria
Organizational Interrelationships
Coherence with firm strategy
Key account selection is a strategy
implementation decision
Supplier valued by the customer
Customer believes, or can be persuaded, that
distributor can meet its needs over the long run
Cultural Fit
Building Relationship with KA
Personal trust
Ensure promises are kept
Reply swiftly to queries, problems and complaints
Establish high frequency of contact with KA
Arrange factory/site visits
Engage in social activities with customer
Give advance warning of problems
Building Relationship with KA- contd
Technical support
Research and development cooperation
Before-and after-sales service
Provide training
Dual selling (supplier helps KA to sell
Building Relationship with KA- contd
Resource support
Provide credit facilities
Create low interest loan
Engage in co-operative promotions to share costs
Engage in counter trade (accept payment by means
of goods or services rather than cash

Building Relationship with KA- contd
Service levels
Reliable delivery
Fast/just-in-time delivery
Install computerized reorder systems
Give fast accurate quotes
Defect reduction

Building Relationship with KA- contd
Risk reduction
Free demo
Free/low-cost trial period
Product guarantees
Delivery guarantees
Preventive maintenance contracts
Proactive follow-ups
Reference selling