Construction Strategy

Key Account Management

What is Key Account Management?

Key Account Management (KAM) is a professional sales approach which involves the supplier and customer’s business working together to achieve common goals.

This is not a Buyer-Seller relationship, you need to involve people from all aspects of your business and they should be talking with people working in all the activities of your customer’s business.

Both parties combine their expertise, working together to find better ways of doing things. They achieve cost savings by re-engineering processes, reducing inventory and avoiding unnecessary activity. Cost savings are achieved as a result of a better understanding of each other’s business. Importantly, the cost benefits achieved are shared by both parties.

It is just such an approach being promoted by the Government’s construction strategy.

Why should we offer Key Account Management?

Unless your company has the lowest cost base in its sector it cannot expect to succeed with a policy of cutting prices.

The alternative is to offer your customers best value. Key Account Management will help you to build stronger business relationships and make it much harder for your competitors to secure your business.

By entering into KAM relationships you will:

build stronger relationships with your customers
gain an advantage over your competitors
reduce the issue of price (because of the value you provide)
encourage customer loyalty

Who should we offer Key Account Management to?

One philosophy of KAM is to work with those customers that you wish to develop a long term relationship with and really understand their business.

Because of its complexity KAM is expensive to implement and can only be applied to a select (key) number of customers. They need to be chosen carefully. The customer organisation must be able to understand the process and have the desire to participate. They must also have the level of business, or potential, to make the cost of the exercise worthwhile.

Select your larger customers, those that you value and want to continue working with and see if you can find ways of working with them to take costs out of their business. It will help you to build stronger business relationships and make it much harder for your competitors to secure any of your business.

This is a win-win approach. Both companies should benefit from the savings and once you have worked with your key customers, to find opportunities to take out cost, you can apply them to other customers, making your business offering more competitive without the need to reduce margins.