Key Account Management
This article covers meaning & overview of Key Account Management from marketing perspective.
What is Key Account Management?
Key Account Management is a strategy adopted by firms wherein, the company identifies its key accounts (major customers who form substantial part of company’s sales/business) & provides value-added services to the key-account portfolio. The objective of this approach is to build relations with the crucial customers to nurture the business.
The Key-accounts (Customers) are identified on following criteria:
- Who have stable & regular orders
- Low risk of bad debts
- Who have potential to be lifetime customers
- Who value brand loyalty
- Who are willing to pay for a higher service level
The Added benefits can be in the form of:
- Monetary benefits ( Discounts, flexible credit policies)
- Social Benefits ( club membership, tours & trips)
- Structural benefits ( mode of payment, special delivery arrangement)
An organization while practicing KAM would want to climb the ladder of customer loyalty as:
Prospect -> Customer -> Client ->Supporter -> Advocate -> Partner
- Prospect: Someone who would be interested in doing business with us
- Customer: Who has done business with us once.
- Supporter: Someone who likes our organization
- Advocate: Who recommends us to others
- Partner: Who works with us on a regular basis
Hence, this concludes the definition of Key Account Management along with its overview.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 1800 business concepts from 5 categories.
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