Key Account Management

Posted in Marketing and Strategy Terms, Total Reads: 4093

Definition: 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.


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