Is Key Account Management Applicable to All Markets

The debate about Key Account Management (KAM) and its application within the pharmaceutical industry continues to evolve.

By Joanna Allen on Nov 12, 2009

The debate about Key Account Management (KAM) and its application within the pharmaceutical industry continues to evolve. Recently there appears to be a move towards writers considering KAM not to be an industry wide solution but market specific. With some people considering it to be the approach needed to meet the needs of larger more mature markets and not niche market ones.


 


This debate is possibly fuelled by a lack of common agreement about what constitutes a key account. Many different metrics currently exist to define key accounts with sale potential and numbers of customers featuring highly on the list.  Research performed by IMONIC in other industries showed, when questioned Key Account Managers could offer up at least 8 different definitions of how key accounts were chosen these include:


 



  1. One that contributes a significant percentage of our turnover.

  2. Customers are market leaders that give us additional credibility.

  3. A main customer in a market niche in which we wish to grow.

  4. Key customers commit to us by contracting a significant proportion of business.

  5. Key customers are our oldest trading customers.

  6. Customers are those which gain us access to other customers.

  7. Key customers are alliance partners as well as customers.

  8. Key customers are of strategic importance to a parent/sister company, which designates, them with key customer status in our business

 


Substituting the word market for key opinion leader in definition 2, would make the majority of these definitions applicable to how key accounts are also defined within the industry. Potentially the more mature market approach would be to identify key customers who are alliance partners, i.e. those where we can build collaborative partnerships. Niche markets may identify more closely with definitions 2, 3 and possibly 6, given the rising number of stakeholders in the decision making process. Overall is not the focus on building shared value and commitment especially given the NHS and industry share a common agenda to improve health or prevent disease. If this is the case surely a Key Account Management approach should be taken what ever the size or age of the market.