Key account management is often mistaken for just another sale strategy, but it is an approach that seeks to change the way you do business, as well as how you win new business. As such, it has the power to affect your business at every level and drive profit margin long into the future.

In this article, I want to explore key account management (often referred to as strategic account management) and how it can be applied to any business.

Defining key account management

At the heart of key account management is the defining of what makes a valuable customer. By understanding long term value and not just measuring value in terms of current revenue, a deep analysis of your customer portfolio can be undertaken and key accounts that can offer strategic long term value selected.

It makes no sense for a business to share its efforts and resources equally amongst customers that generate different value. An occasional, low-value and small customer won’t generally become a key account, unless that is, you can strategically identify the potential in nurturing that relationship for greater sales and better profits over the long term. Potential value is as important as current value in this equation. In an environment where good resource management is essential, prioritisation of investment and resources is key.

Each of your key accounts will be different and value different things, so a plan to proactively invest in these relationships will need to be customised to grow them and achieve more business, better competitiveness and a healthy profit margin.

Prioritising high value customers

A fundamental aspect of key account management is to develop a profound understanding of what your customers really want and need – and then going the extra mile to deliver it. This could encompass deeper insight, closer collaboration, better purchasing systems, joint innovation and enhanced supply chain management.

By building long-term mutually beneficial relationships suppliers can deliver value for both the customer and themselves. Unlike some tactical sales, this is not one-way transactional activity. Sales efforts tend to focus on the short-term gains to deliver pressing financial targets. KAM is more strategic and symbiotic – where collaboration results in greater short and long term customer value and the establishment of competitive advantage for the suppliers business, allowing it to see off competition far easier.

Choosing your key accounts

Start by knowing exactly how your business defines a high net worth customer. Consider the growth potential of the account, which is often more important than its absolute size and a better indicator of future value, as well as behaviour – if the customer is a good one to do business with, it’s a tick in the box.

Other considerations might include whether there is scope for innovation – if you can bring innovation to the relationship of a business that is ready to evolve, you have scope to add significant value. It’s important that there is collaboration potential, as the relationship must be two-way. In other words, your key accounts must be willing to commit a degree of time and resources to working with you to deliver more value. In this sense, it helps when there are shared values between the two companies, as a comparable culture helps the relationship to flow.

Your customer must appreciate the value they can gain. A building blocks for their perception of value will come from your value proposition.


The value proposition

Creating a value proposition is crucial for bringing your key accounts on board and will help define how your key accounts will benefit from working with you, rather than your competitors. It can be wide or narrow, and based on a service or the entire business.

A successful value proposition must be:

  1. motivational enough to stimulate action
  2. differentiated so as to position you ahead of the competition
  3. quantified with clear ROI and risk
  4. credible and evidence based
  5. customer focused, demonstrating a clear understanding of the customer’s business motivations and concerns.

To ensure that your value proposition can be clearly communicated and understood it’s important to be able to define the essence of your proposal in just a few lines.


How Key Account Management drives profit

Once defined, your key account management strategy will allow you to develop the competitiveness of your business, by offering:

  1. an enhanced customer focus in the longer term, with resources committed to unlocking those benefits
  2. no waste of resources on low profit-margin customers
  3. greater competitive advantage, with key relationships and better loyalty, helping to create economies of scale, especially where preferred supplier status can be achieved to keep competitors away.
  4. the growth of your strengths as a supplier – by better understanding your customers to refine your pricing, productivity and negotiating positions.



Strategic account management is not always an easy or quick route to greater profits. It is a long-term process that will require coordination and buy-in across the entire business, with the building of more productive relationships, both internal and external. Done well, however, it will become a strategic change management programme of its own, one that generates high levels of growth. It will also avoid potential wasting of your time and resources, by focusing effort on the customers who represent the best potential value and profit to the business.

This article only touches on the subject of Key Account Management, as an introduction. As a business, it is worth investing in key account management training and skill development for those managers who will be most immediately charged with developing your strategic key management approach. Take it seriously and invest time, energy and resources into the approach to and you can see exceptional benefits. Measure relationships carefully, track progress, lead from the top and show commitment to realising and unlocking the benefits of this powerful approach to business development.

About the Author: Alistair Taylor is a key account management consultant and the founder and managing partner of UK based Brightbridge Consulting. He has over a decade of experience working as a senior manager and consultant for large corporations and organisations all over the world, implementing and running highly successful key account programmes. You can connect with Alistair on LinkedIn.


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