Getting to grips with KAM
Chris Morgan, a principal at ZS Associates, explains the keys to successful key account management.
By on Mar 30, 2010Chris Morgan, a principal at ZS Associates, explains the keys to successful key account management.
Key Account Management (KAM) is a hot item in todays pharmaceutical environment. The growth in the power of payer organizations, and the loss in power of individual physicians, have left pharmaceutical companies scrambling for a new model to reach customers and sell products more effectively.
Most agree that KAM is the solution. Those companies that havent implemented the model yet are at least considering it or planning its integration.
And yet, for all its hype, KAM has turned out to present quite a few challenges of its own. An October 2009 eyeforpharma survey of more than 150 life science experts found that while 95 percent of respondents are involved with KAM, only 11 percent think theyve got it cracked.
Customers first
A lot of people ask me questions about how fast can we as an organization implement key account management, says Chris Morgan, a principal at ZS Associates. Obviously theres limits as to how fast an organization can move, but far more important is the question of how quickly will our customers move. Because KAM isnt something you do to a customer; its something you do with them, which means that you need their cooperation. Theyre implicit in the sales model here.
Ushering the customer into the sales model is a significant change and a sizable challenge. Historically, sales reps relationships with customers have been defined by rebates and conversations about product features and benefits.
KAM, however, seeks to completely redefine that relationship, to make the sales rep a trusted adviser to the account.
Sales rep as trusted adviser
Which doesnt happen overnight, Morgan says. It requires a building of trust. Theres typically quite a lot of work we have to do in helping people disrupt the status quo in accounts to be able to shift the nature of the relationship and the existing perceptions This might last six months, it might last a year. So its a very different feeling sales process.
Morgan says that one key is to help account managers break down a long and complex process into shorter steps, often described as advances. If you can supply an account manager with 10 smaller advances needed to achieve a more substantial end goal, it will make KAM flow more smoothly.
So, too, will ensuring that individuals in this new KAM model arent overburdened with unrealistic expectations.
Multiple roles, tight coordination
When you have these multiple stakeholders with multiple needs, if you try and invest too much of that in one person, you often end up with a very overloaded role with a competency profile which pretty much only fits superman, Morgan says.
Ive seen this happen in a lot of circumstances, Morgan continues. People have created a sales model which assumes the existence of some super-qualified, experienced, and capable person to be the lynchpin of the whole thing, and then a year later theyre disappointed because they havent been able to find people to fit into those roles.
Morgan believes the future the model will be one of multiple roles but with very tight coordination, simply because firms need to be realistic about what spread of capabilities they are likely to find within one person.
Training talent
Another obstacle is training. Few sales managers or reps have experience with KAM at present, which makes it difficult to teach skills. How do you apprentice young talent in a company where expertise is yet to be established?
Typically, people have been trained to get to selling the solutions, selling the product very quickly, Morgan says. Typically, when youre trying to sell a higher-level value proposition, you need to spend a lot more time understanding the business of listening before you get to the solution.
Thus, its critical for a company to embed an apprentice development strategy in their overarching KAM approach.
Different KAM models
One of the most vexing challenges of KAM is complexity: Its critical to acknowledge that one size doesnt fit all and to apply different KAM models within your larger KAM strategy.
Morgan recommends that companies segment their customers and ask what value they can deliver to the customer instead of the traditional inquiry of how valuable the customer is to the company.
Theres a variety of different opportunities for us to add value, says Morgan. The only way for us to understand what we need to bring in terms of a market offering to generate a strong value proposition for the customer is to understand the customers business and how we can impact that.
Morgan even suggests going one step further: Think about your customers customers, which is typically the patients but in some cases the payers. Thats the place thats critical to consider if you want to generate mutual value, according to Morgan.
Dont forget the key
Lastly, Morgan advises companies to manage their ambitions. Every company wants to optimize as much of the market as it can, but jumping in too deep too fast is a death knell when it comes to KAM.
Dont forget the key part in key account management, Morgan says. Start with a few accounts, learn with them, and then grow. Develop your capabilities with a small number and then expand beyond that. Everyone Ive seen whose been successful at getting KAM to stick has started slow to go fast in the end.
For more KAM insights, join the industrys key players at Key Account Management USA on September 13-14 in Philadelphia.
To learn more about KAM, visit eyeforpharmas KAM Knowledge Hub.
To hear Chris Morgan speak further on the topic, check out this Key Account Management Webinar.