B2B Special Issue Papers: Key account management in financial services: Poised between desire and fulfilment
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Keywords: key account management, financial services, customer relationship management
Key account management in financial services: Poised between desire and fulfilment Diana Woodburn Received: 7 April 2004
Abstract Key account management (KAM) requires a more extensive engagement by suppliers than many of them originally envisaged. As a result, service providers are now reducing the numbers of customers that they consider to be key, and selecting them more carefully and on the basis of their potential rather than their past. In order to make that selection, and to manage and develop the business, a deeper understanding of the customer and its markets is required than key account managers have ever had before. In fact, financial services is not one market but several, and they are generally rather poorly understood by the people at the forefront of KAM. This paper suggests that understanding markets and market structure could be improved by using techniques such as market mapping. Changes taking place in these markets all tend to drive the need for KAM, particularly consolidation, which means fewer, larger customers demanding more serious investments in their businesses from their suppliers. Providers must follow up these investments with the relationships that will secure the payback from them. While the growth of KAM recognises this need, there are still major issues of delivery on the promises of individual treatment that KAM makes to customers.
What is key account management?
Diana Woodburn Marketing Best Practice Ltd Chiltern House Thame Road Haddenham, Bucks HP17 8BY UK Tel: +44 (0)1844 295855 E-mail: [email protected]
A key account has been defined as ‘a customer deemed to be of strategic importance to the selling company’.1 As a result, key customers are overwhelmingly businesses rather than individuals (although some seriously rich individuals would qualify in financial services, especially in banking). Key account management (KAM) is therefore generally a business-to-business activity, described by McDonald and Woodburn as ‘an integrated approach to the profitable development of individual customers of strategic importance to a supplier’.2 From this definition it is clear that KAM is mainly concerned with the retention of these important customers at the least, and even more with their development. While a good deal of the philosophy can be used to support the process of identifying and capturing new key customers, customer acquisition is not core to KAM, so the focus is somewhat
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Tailored benefits for specific business models
Supplier and customer alignment
different from many customer relationship management (CRM) pipeline models. Research has confirmed that customers which are prepared to put their time and effort into a strategic relationship with a supplier are seeking distinctive benefits that are valuable to them in
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