I was struck at a recent PM training course “Towards KAM – helping fee-earners with client relationship management” that there were a number of business development professionals in professional service firms who were in dedicated key account management roles. So books on Key Account Management (KAM) are topical and I reviewed this one for PM Forum magazine recently.
This is the third edition of a 1994 classic which remains one of the most important on KAM – Key Account Management. It is part of the Miller Heiman series on selling (initial books being Conceptual Selling and Strategic Selling) and is based on the Large Account Management Planning (LAMP®) methodology.
It states upfront its philosophy: “To be successful in developing large accounts there is a need to invest heavily in understanding the account, in building relationships, creating teams and working out the actions required to secure profitable business”. And much of the book is about how to build relationships that bring your customers measurable value over time – this in itself feels somewhat challenging in the professions.
The book is designed around the Miller Heiman Large Account Management Planning (LAMP®) methodology (those of us who have attended the training courses will remember the “gold sheet” template).
Its basic premise is that “to achieve long-term profitable relationships with your key customers, you must make consistent, measurable contributions to their profitability and their customer relationships” so it ticks all the boxes for me in avoiding the internally-focused, short term sales opportunism that is often an issue.
Whilst the book talks about organisations which are unrelated to and significantly larger than most of those that we deal with in professional services, it contains a lot of excellent advice. There’s an insightful recognition of the need for good information systems – and their wholehearted adoption.
There’s lots of great strategy and sales questions to challenge your account teams. There’s a focus on detailed analysis and thorough research which will ensure that you really understand your client’s business. And the use of the central model of the buy-sell hierarchy (“sell up to value, not down to price”) to become a strategic partner achieving a “win-win” outcome is hugely valuable.
The model is elegant but common sense and provides a language with which to discuss large accounts including field of play, strategic players, strategic coaches, sponsors, anti-sponsors, uncovered bases, red flags, trends, opportunities, vulnerabilities etc which tie in nicely with marketing audit and decision making unit (DMU) thinking. Throughout there is a plea to focus on no more than the three most critical issues in each area.
The importance of having a strategic charter (vision) and goals (relational and qualitative aims) before setting SMART revenue targets is stressed. The authors and leading business people they interview indicate that a ratio of one manager to five or ten accounts is appropriate. But in view of the amount of work involved, even this feels unwieldy for the resource-averse professions.
However, the examples and worked case study do not make it easy to relate to client situations in the professional services arena. Although the summary illustration in the pre-action checklist of what a surprisingly simple completed analysis and plan for a worked example helps a lot.
So, for me, this remains an important book on an increasingly strategic management issue. And, as the authors acknowledge, it’s far too important to be left to sales or business development people alone – it needs wholehearted senior management commitment and an organisation-wide effort. Hear, Hear.
Some of my favourite quotes from the book:
- “Alert to the traditional benchmark that 50 per cent of a company’s revenue comes from 5 per cent of its customers”
- “According to the Strategic Account Management Association, about two out of three companies have SAM programmes in place” http://www.strategicaccounts.org/ (US)
- “Today, in top firms you get to manage a major account only after you’ve proved your effectiveness in the selling arena”
- “The Lone Ranger has left the building”
- “An account only deserves the royal treatment if it treats you like royalty”
- “A company isn’t a person. It’s made up of persons. When you develop a business relationship, it’s really the sum of those parts”
- “The role of the account manager as “to orchestrate this web of contacts to ensure that the various touch points in the account are activated as frequently as is necessary and that the contacts are made with a common purpose in line with the strategy for the account”
- “The only way to determine whether or not capabilities are strengths for you in your current situation is to find out what value your large account sees in them”
- “There’s a lot of talk these days about providing solutions – so much so that a colleague of ours with scant patience for jargon calls it ‘the single most overused word in contemporary business literature’”
- “The only businesses that have a chance of sustaining competitive advantage today understand that it is relationships, not revenue per se, that provide the key to survival. They also understand that in building relationships, value as perceived by the account is the only kind that counts”
- “Without an execution culture, the perfect strategy is nothing more than a dream – some might even argue a nightmare”
- “Customers who are marketplace winners don’t just buy products and services, they buy expectations. What they want is problem solving and creative thinking about their business, which requires the commitment of and access to the supplier’s total operation”
- “According to our research, the single biggest obstacle to alignment is a silo mentality that divides an organisation into competing turfs”
- “Intent for the past on ‘optimising’ operations – including account management – firms must now, asserts Hamel, focus more on ‘Innovating’ and creating customer value”
The original article can be viewed here (please note you need to be a PM Forum member to access this) http://www.pmforum.co.uk/magazine/view_article.aspx?id=4446
Part One – Basic principles
1 The new landscape of account management: eight lessons
2 Selecting the large account
3 A real world example
Part two – Situation appraisals
4 The buy-sell hierarchy
5 Preparing the ground
6 Strategic players
7 The account’s trends and opportunities
8 Your strengths and vulnerabilities
9 Situation appraisal summary
Part three – Strategic analysis
10 Charter statement
12 Focus investments
13 Stop investments
14 Revenue targets
15 Pre-action overview
Part four – Execution
16 Actioning the strategy
17 Ninety-day review
18 The LAMP advantage
Other Miller Heiman books
Miller Heiman are, of course, well known for their books and the highly regarded sales training courses that are based on them. There other books in the series are:
The New Conceptual Selling® – The New Conceptual Selling® provides step-by-step tactics for achieving effective communication during one-on-one sales calls and managing all customer interactions.
The New Strategic Selling® – Strategic Selling® helps you identify and convert sales opportunities into closed business. You’ll assess what you know about your clients, discover what you don’t know and learn who and what you need to know to develop a winning solution.
Further details: http://www.millerheiman.com/
Other key account management (KAM) books
Other blogs reviewing books on KAM – Key Account Management include:
- “Key account management” by Peter Cheverton
- “Managing key clients” by Kevin Walker, Paul Denvir and Cliff Ferguson
- “Key account management – learning from suppliers and customer perspective” by Malcolm McDonald and Beth Rogers
I’m also still a fan of one of the original relationship marketing books which touches on the subject: “Relationship marketing – bringing quality, customer service and marketing together” by Martin Christopher, Adrian Payne and David Ballentyne. essay writing help online