http://www.themarketingprocessco.com/key%20account%20management/kam.htm
http://www.mbs.ac.uk/research/marketingpurchasing/documents/IMPResearchGroupBriefing2007_2.pdf
http://www.iproceed.com/marketing/key-account-management.htm
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Key account management or customer relationship management is a very effective strategic tool, performed with the objective to ensure long term and sustainable business development through its exsisting customers. It can be explored in terms of value which can be either from the customers or suppliers perspective.
ReplyDeleteThrough the following articles it can be understood that KAM is not just any tool used on the basis of its exsisting customers but it is an effective tool and there are many other factors which affects the companies decision.
In the second article the more emphasis is given on different types of KAM's model types,and accordingly the customers are differentiated on the basis of key account customers, exsisting and new customers.
In context to the multi-facet key account value perspective there are three different categories such as- exchange value(customer benefitted),Proprietary value( company benefitted), relational value(both customer and company benefitted).
Further an article related to key account value analysis, was discussed we mainly talked about the how an organisation can identify and divided different sections for key account analysis and benefit its organisation.
Lastly it can be said as for a competitive market scenario it is very important for different companies to perform and maintain its customers both exsisting and new customers for overall companies growth and exsistence.
While I understood what Key Account Handling is, I have a few questions that I would like to ask. They are:
ReplyDelete1. Can a retail store have key accounts?
2. If yes, then does that mean that the most loyal or regular customers are the Key accounts?
3. Do the customers who have the privilege loyalty cards (like shopper's stop gold card etc.) fall in this category?
4. As Straps will be re launched, can it have key accounts?
The articles talk about issues relating to key account management: about assessing and selecting key accounts, account analyzing and planning.
ReplyDeleteWhile assessing key accounts one has to look at not only the sales/revenues but also the profits, growth rate, opportunities ahead, mix of orders, prices and resource allocation.
Key accounts selection can differ from company to company. The ultimate objective should be to focus on customer retention and loyalty. On an average 80% of the firm’s revenues is supplied by 20% of its customers. So, companies have to understand the customer needs, and then provide support and services that help them grow. This way a company becomes not just a supplier but a value partner.
So a need for restructuring sales efforts and resources are needed. I’m not implying that the bulk 80% customers should not be treated well or not given attention but just that they should be treated differently from the high value customers who are worthy of greater managerial attention. Further, the firm can identify less expensive methods to deal with smaller accounts. One article talks about a dual CRM strategy: one for key accounts and another one for the rest. This may be an effective way for account management.
It is but obvious that acquiring new clients/customers is more expensive than maintaining old ones. This is because of increased competition, economies of scale, cost cutting by customers and downsizing of vendors. That’s what makes account management a customer centric activity.
Supplier companies (whether SMEs or fortune 500) face a critical situation today and will be forced to relook at key accounts management as a core business process. From a personal observation (during internship-institutional sales), this year the market in general was extremely price sensitive (more than usual) due to recession. Cost cutting was the mantra and almost all companies first reduced their vendors and switched to cut rate competitors with lower quotations. Suppliers companies who were not able to maintain value partnerships lost out on several key accounts which reflected on their financials.
These articles talk about what KAM is all about and its importance to an organisation. Kam is necessary in all organisations so that the company can identify its loyal customers and can get a stable base for its revenue. It also helps in monitoring these customers and identify the most profitable customers. Kam is not just about identifying customers but also appraising them, developing strategies for each customer and improve results.The key account selection matrix is one of the tools for the selection criteria of key customers. It allows the company to plot their customers on the matrix on the basis of account attractiveness and customer satisfaction.If customer satisfaction and account attractiveness are both high then the company should invest in the customer and if the situation is vis-a-versa then the company should manage for cash.If the account attractiveness is high but the customer satisfaction is not that high then the company should selectively invest in the customer and if the customer satisfaction is high and accoun attractiveness is low the the company should maintain its customers.
ReplyDeleteTo shruti's questions
ReplyDelete1) of cource retail stores can have key accounts. They can keep trck of customers who regularly purchace from the retail store and can invest in them in terms of offering more benefits to them in return getting their loyalty.
2)No, only those loyal customers are the key accounts who regularly purchase from them offering the store a stable revenue. There may be a loyal customer but if he, she purchases only once a year then he does not become a key account.
3)No,same answer
4)Yes it can have key accounts only after a period of time and not as soon as u launch it...It takes customers time to develop preference for a brand and only go their for their purchases. In the initial stage of launching it cannot have key accounts.
After reading the following articles, i realised that KAM is an important tool in any company to maintain its identity with the customers.as these customers leads to better profits and revenue.
ReplyDeleteas i was going through the articles , i now understand the importance of KAM in the organisation, its more or less the relation which is shared with the customers and how to convert your potential customers into existing and existing onces into loyal. its basically making the customer happy and satisfied so that the customer doesn't end buying your product once but becomes loyal to you. which will lead to increase in high sales , profits an revenue .
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