Theory and practice of key account management (KAM)

29 January 2015 Written by 
Published in Key account management

KAM concept can better be understood when view from the context of a specific industry like pharmaceutical where it is undergoing major transformation.

KAM has been touted as a probable panacea to the market access headwind the industry is facing.

Setting up a framework for a KAM solution requires a concise definition as to what constitute an account.

Under the conventional sales process, major accounts are typically ranked in terms of revenue numbers, growth and market share. The main driver of change is the shift away from drug efficacy and safety as the primary considerations for registration, reimbursement, recommendation, purchase, usage, or application to incorporate other factors revolving around value. Along with it, so has the composition of the decision making unit (DMU) which extends to include other stakeholders like payers, health economists, managers etc. besides physicians and clinicians. As such key account selection / segmentation process is more nuanced.

A different account management mind-set is required to understand and satisfy the needs of the customers whose decision-making process is becoming more complex. More resources are therefore required to handle such relationship structure.

It is natural for customers to put pressure on pricing as well as demanding quicker turnaround time to their needs. To avoid groupthink that increases the risk of commoditisation of the product and service, a well-conceived KAM system will create time and space for team members to think through the issues strategically and execute it with panache over and above the competition.

Companies can expect to be called upon to play the role of solution providers. This goes beyond mere selling and encompasses consultative, planning, finance, procurement, interpersonal, socialising and influencing skills – all roll into one. A sort of an entrepreneurial undertaking, if you like. This can only make sense if it is mutually beneficial and profitable. Trust is the glue that keeps the relationship intact and meaningful. Only accounts meeting a set of criteria can be considered as key.

The role of KAM is to suss out the nuanced signals and to figure which accounts will provide the most sustainable value to the customer and in turn the basis for better pricing power and thereby creating shareholder value for your organisation.

To transit from a traditional sale to KAM role requires a balancing of elements in the three critical categories i.e. domain knowhow, technology and networking. A learn-as-you-go approach minimises the risk of a costly build in a fluid market environment where many moving parts are in play. The following are examples of pointers for consideration when designing a KAM setup.

Entrepreneurship – domain knowhow

  • understand market, account dynamics / healthcare economics
  • clinical understanding of disease state and patient pool
  • understand how products address clinical needs
  • solving problem and co-creating value
  • aligning local market practices to global strategy
  • understanding priority and build a baseline for consensus
  • buying decision of customer is driven by what the product or service can do to create value, within their processes and markets
  • customers are ever more demanding
  • cost reduction pressure and risk of commoditisation of products / services
  • develop actionable solutions to drive value

Team engagement - technology

  • client demands increase speed of delivery
  • empower team engagement via cloud-based platform
  • rapid deployment with the ability to fine-tune / calibrate the system on quick-time basis
  • content creation ( external and internal )
  • consistency in data mapping to allow for ease of comparison
  • business intelligence gathering ( market research ) and information sharing
  • business analysis and report generation

DMU - connecting to stakeholders

  • connect and interact with multiple stakeholders and committees within an entity / account
  • pushback from entrenched interest groups within the organisation
  • strategic account opportunity planning
  • joint solution development
  • multi-functional team development
  • develop overall relationship
  • outcome management


Read 2871 times Last modified on Saturday, 21 February 2015 17:27
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