What is Key Account Management?
I recently read a debate on a website which asked the question what is KAM in the pharmaceutical industry?
By on Aug 9, 2009
I recently read a debate on a website which asked the question what is KAM in the pharmaceutical industry? This was a genuine question from someone who was confused about the concept as I am sure many of us are. Below are extracts from two replies to the question.
KAM is about managing the process of identifying the right customers to get product endorsement or formulary listing and selecting the right internal people to see these customers. It is then about managing the sales people in the field to pull through this endorsement and generate sales from it.
KAM is employing the right people to work across a range of customers to create a favourable business environment for the organisation whilst offering some benefits to add value for the customers. The writer here notes that each customers definition of value will be different.
What is striking is the difference of opinion which no doubt pervades the industry and will influence any KAM strategy that an organisation decides upon. The first definition is about the management of people internally to get the right outcome and the subsequent sales. Personally I believe this continues to advocate the product approach to selling whereby the organisation has a product and pushes this towards the customer.
The second explanation is more customer centric and realises the need to create value for the customer. Note that the writer considers value to be different for every customers thereby taking into account that each customer will want different things from a product/organisation. This approach is akin with the pull customers towards your products, taking into account their needs and wants and is more inline with the shift in sales and marketing seen in other industries over the last 15 years.
The question also led me to look at definitions of KAM in other industries, BNET Business Dictionary definition is similar to others around at the moment they say KAM is:
The management of the customer relationships that are most important to a company. Key accounts are those held by customers who produce most profit for a company or have the potential to do so, or those who are of strategic importance. Development of these customer relations and customer retention is important to business success. Particular emphasis is placed on analyzing which accounts are key to a company at any one time, determining the needs of these particular customers, and implementing procedures to ensure that they receive premium customer service and to increase customer satisfaction
On reviewing the definition above and some of the articles, blogs and thoughts of others about KAM, I wonder can we truly implement what other industries have successfully done over the last 15 years or is it a step too far? Are we hampered by the fact that products are developed for unmet clinical needs with little consideration for the customer or end user and if we are, how can we overcome this?