Malcolm McDonald on Key Account Management

Malcolm McDonald, Beth Rogers

• Publisher: Kogan Page
• Year: 2017
• ISBN:
  9780749480790
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

Malcolm McDonald on Key Account Management explores the challenges of winning, retaining and developing key accounts. Key accounts are customers who help their suppliers grow, and consequently, they wield significant power. Although they are the key to market share and revenue growth, the costs of serving key accounts can erode profitability unless they are thoroughly understood and managed. Malcolm McDonald on Key Account Management takes a step-by-step approach to presenting best practice in key account management. Whether your business is starting up or well-established, there is always more to discover about improving the way value is created between you and your most important customers. Malcolm McDonald and Beth Rogers have spent over twenty years researching, teaching and consulting on key account management, and have condensed their knowledge into this book, focusing on making it clear, concise and easy to use.

APPENDIX 1

The McDonald and Rogers 10 guidelines for profitable key account management

There is a lot to digest in this book. But if you can keep these 10 things in mind for key account management (KAM), you should improve results:

1. Understand that KAM is not just super-selling or sales management.
2. Select (and be prepared to reselect) a limited number of key accounts.
3. Categorize key accounts according to their potential for helping you to grow profitably over the planning period.
4. Understand in depth the needs of the selected key accounts as organizations and all the professional needs of stakeholders in those key accounts. What are they trying to achieve in their markets and how do your capabilities fit in with that?
5. Categorize the key accounts according to your relative strengths in each, compared with your major competitors.
6. Understand your full customer portfolio and use it to balance risks inherent in key accounts.
7. Set realistic objectives and strategies to grow your sales and profits in all customer segments (calculate whether the aggregate key account objectives and strategies create shareholder value).
8. Apply technology to generate insight about key accounts and provide automated services to them.
9. Develop strategic plans for selected key accounts and test them for robustness using simulations that anticipate competitor responses.
10. Ensure that you have highly skilled people as key account managers and give them the necessary authority, support via a key account team and a sensibly balanced short-term and long-term reward package.

Adapted from D Woodburn and M McDonald (2012)

Key Account Management: The definitive guide,

John Wiley & Sons, Chichester

APPENDIX 2

A quiz for key account managers

Senior managers may use this in review meetings with key account managers, and key account managers can use it to prepare for meetings with senior managers.

How well do you know your key account?

Do you know (score out of 10):

1. Your company’s proportion of your key account’s total spend in your product/service category?
2. Your key account’s financial health (return on capital employed, liquidity ratios etc)?
3. Details of your key account’s strategic plan?
4. Your key account’s business processes (logistics, purchasing, manufacturing, etc)?
5. Your key account’s customers/segments/products?
6. Which of your competitors your key account uses, and why and how they rate them?
7. What your key account values from suppliers?
8. The costs to serve your key account?
9. Your key account’s projected lifetime value?
10. The risk of losing your key account, and the risks of keeping it?

Adapted from D Woodburn and M McDonald (2012)

Key Account Management: The definitive guide,

John Wiley & Sons, Chichester

APPENDIX 3

Important research articles on key account management

For the curious who would like more detail about the research evidence for key account management (KAM), here is a list of accessible academic articles. Many of these are now free to view via Google Scholar or ResearchGate. Otherwise, access will involve a small fee to the journal publisher.

Abratt, R and Kelly, PM (2002) Customer–supplier partnerships: perceptions of a successful key account management program, Industrial Marketing Management, 31 (5), pp 467–76

Al-Husan, FB and Brennan, R (2009) Strategic account management in an emerging economy, Journal of Business & Industrial Marketing, 24 (8), pp 611–20

Atanasova, Y and Senn, C (2011) Global customer team design: dimensions, determinants, & performance outcomes, Industrial Marketing Management, 40 (2), pp 278–89

Birkinshaw, J, Toulan, O and Arnold, D (2001) Global account management in multinational corporations: theory and evidence, Journal of International Business Studies, 32 (2), pp 231–48

Blythe, J (2002) Using trade fairs in key account management, Industrial Marketing Management, 31 (7), pp 627–35

Bradford, DK, Challagalla, NG, Hunter, CW and Moncrief, CW (2012) Strategic account management: conceptualizing, integrating, and extending the domain from fluid to dedicated accounts, Journal of Personal Selling & Sales Management, 32 (1), pp 41–56

Brehmer, PO and Rehme, J (2009) Proactive and reactive: drivers for key account management programmes, European Journal of Marketing, 43 (7/8), pp 961–84

Capon, N and Senn, C (2010) Global customer management programs: how to make them really work, California Management Review, 52 (2), pp 32–55

Davies, IA and Ryals, LJ (2009) A stage model for transitioning to KAM, Journal of Marketing Management, 25 (9–10), pp 1027–48

Davies, IA and Ryal...