Will KAM save the day?
Most pharma companies have embarked on key account management (KAM) initiatives in one way or another. But building a true KAM competency can be a costly proposition. And in an environment where so many organizations are cutting costs, pharmaceutical executives need to ask some tough questions: How exactly do we create new value through KAM? Are we there yet?
By on Dec 21, 2009Most pharma companies have embarked on key account management (KAM) initiatives in one way or another.
But building a true KAM competency can be a costly proposition. And in an environment where so many organizations are cutting costs, pharmaceutical executives need to ask some tough questions: How exactly do we create new value through KAM? Are we there yet?
The reasoning for a KAM strategy is straightforward. As payers gain ever more power and control over pricing and access decisions worldwide, their designation as key accounts deserving more dedicated attention from manufacturers is obvious. The same holds true for large hospital groups and healthcare provider networks, the other increasingly sophisticated big buyers of pharmaceuticals.
Getting much closer to these powerful customers to understand and better address their needs is the survival strategy to contain the squeeze on prices and margins. And KAM is the vehicle to achieve this customer-centric approach, which will increasingly lead to strategic partnerships for value creation that have the potential to transform the pharmaceutical selling model. So it is not surprising that KAM was declared mission critical for pharma in recent years, and that it has been subject to so many conferences and articles. Everybody is talking about it. Everybody is doing it.
But will KAM save the day? How precisely will it lead to a brighter future for the pharmaceutical industry? Is it creating good returns already, or is it still something our industry is trying to figure out how to do well?
As one executive at a conference recently shared: We have created new KAM positions in pharma. We have all run the account management training. We give our people account planning templates. We have spent millions on new improved account and customer data management systems....and more. But are our people truly selling differently now? Or have we just shuffled some people around and given them fancy new titles? Where exactly is the additional value our KAMs create? Do we really understand in detail what they are doing, or what they should be doing?
Pharmaceutical executives need to ask these tough questions. If KAM eventually lives up to it's promise and delivers on expectations (and I believe it will!), it is most likely to happen as a result of this kind of self-awareness and honest assessment, the kind that prompts investment today to prepare for tomorrow, even in a time when many organizations are under pressure to improve productivity, and cut costs.
Well be discussing these issues and more at the Selling Pharmaceuticals in 2015 Executive Forum on 9th February in Philadelphia. To find out more, click here.