Key account management is a permanent fixture in sales. In recent years, the existing models have hardly evolved at all. This is surprising given the numerous changes in practice. Based on our sales consulting, we have developed the Zurich Key Account Management Model. This new model picks up on current developments in sales and offers a new system for improving key account management in a targeted manner. The model is based on our Sales Excellence Model and is divided into two levels. The upper level deals with the various activities in key account management. Starting with valuable customer insights through to the differentiating playbook, the central activities are systematically managed. This is a clear added value compared to existing approaches that see key account management less as a sales activity and more as an organizational unit. At the underlying level, the aim is to systematically transform the organization so that key account management can adapt to changes in customer purchasing behavior. This clear separation and systematic approach is unique and has proven to be clearly superior to existing approaches in our training courses, seminars and consulting projects.
Level 1 of the Zurich Key Account Management Model
The upper level of the Zurich Key Account Management Model comprises six stages. These are not to be understood as a linear sequence, but as integrative sales activities.
Level 1: Value Insights
In principle, sales excellence is aimed at improving information management in sales. This is particularly true in key account management. It is important to understand the value of the company and its solutions from the customer’s perspective and the financial value of the customer for the company (customer value). The better the information base, the greater the chances of a successful KAM. In addition to understanding value, it is also important to have insights for the application of modern sales approaches, such as Challenger and Insights Sales.
Level 2: Structure
If value insights are available, it is important to structure the customers optimally. How many and which customers does the individual KAM manager look after? How are the customers segmented? What content is communicated and what pricing models and discounts are used? As key accounts usually account for up to 60% of sales, it is particularly important to develop further each year in price management.
Level 3: Solutions
Key accounts are buying fewer and fewer offers and more and more comprehensive solutions. It is therefore important that companies develop solutions or service modules to support the individual KAM manager. Value insights again play a central role here. How great are the opportunities for the individual cross-selling offers? Which additional services offer optimum added value for the customer and strengthen differentiation? As the individual KAM manager cannot delve into the depths of all offers and spontaneously develop service modules, the focus is on empowerment.
4. sales tactic
The sales tactic or sales approach represents the operational core of the Zurich KAM model. Four dimensions need to be considered: (1) the negotiation process as such; (2) the relevant service modules; (3) the optimization of the customer’s business model and (4) support for the changes that are usually necessary in the customer’s organization. There is still too little awareness that comprehensive training on these four dimensions is required at least every three years to ensure that every KAM manager is up to date.
5. pricing
As already mentioned, a customer-oriented pricing approach is particularly important in KAM. In price negotiations, loyalty, cross-selling and increases in customer value should be systematically supported by price management. In addition, price management should be combined with the bonus system. Increasing sales while simultaneously reducing the margin has overwhelming consequences for quite a few companies. Price management in the KAM must also be optimally combined with price management for A/B/C/D customers so that no contradictions can arise in the market.
6. playbook
Key accounts are hopefully not only contacted once a year via email. A playbook or support plan needs to be developed that takes into account the various interactions and enables employees to improve their negotiating position as a guideline. Systematically and based on the relevant information from the first five dimensions.
The focus on the central activities in key account management is unique to the Zurich Key Account Management Model and is what makes it so valuable in practice.
Level 2 of the Zurich Key Account Management Model
The lower level of the Zurich Key Account Management Model focuses on the transformation of the organization in the spirit of sales excellence. Six elements are taken into account.
A: Strategy
It is particularly important to integrate KAM into the corporate strategy and develop a concrete plan for improving the individual building blocks of key account management. What will be done in the area of value insights over the next three years? How will pricing skills be improved, etc.? Even if many companies believe that there is no need for a strategy in sales. It pays off particularly well in key account management.
B: Processes
Customer interactions must be understood as processes. These must be continuously analyzed in terms of performance and, if necessary, improved. Furthermore, there is still hardly any automation in sales. Successful KAM makes optimal use of automation so that employees have more time for value-creating activities.
C: Digitization
The central weak point in sales. Although KAM employees spend a lot of time entering less relevant customer data into less supportive systems, the added value for the customer and the company usually falls by the wayside. Digital tools, such as AI, should be used much more so that, in addition to automation, these tools also provide employees with greater support.
D: Enablement
The central building block in the Zurich Key Account Management model is enablement. Marketing, customer service, finance and product management are called upon to optimally enable the KAM. How do new technologies affect the customer’s cost structure? Which customer visited the website? These are examples of how important it is that the entire organization rallies behind the KAM and optimally enables it to maintain a valuable and long-term relationship with customers.
E: Skills
Enablement is closely linked to skills and competencies. KAM requires a regular skills analysis and, if necessary, skills adjustments or improvements. As the KAM is responsible for a large proportion of sales, enablement must be a top priority here. Data management, negotiation management and customer-oriented price management are currently still non-existent in many companies. This illustrates the great importance of skills.
F: Alignment
For KAM to be successful, it must be optimally integrated into the organization via the structure, information and decision-making processes. However, the controlling of KAM activities should also be systematically improved so as not to focus solely on sales year after year. Enablement and alignment or integration are therefore closely linked.
The Zurich Key Account Management Model comprises two levels, each with six dimensions. This model is unique and holistically covers the requirements of modern key account management. We use it successfully in our seminars and in-house training courses and will continue to develop it further in the coming years. More systematics in KAM pays off!
