Creating Compelling Customer Value Propositions
May 15, 2019 Comment off
Key account management (KAM) has evolved radically over the last five years or so. The traditional focus of managing a large customer relationship is still tacit, but today a more sophisticated business model is required. Customers and suppliers seek to co-create value – and KAM is the perfect way to achieve this.
When key account management first started to emerge as a new management science some 25 years ago (mainly as a response to consolidating markets) it was largely regarded as a technique to manage large complex relationships. In many ways, this is still the case, but with increasingly complex and challenging commercial environments, many organisations have had to adapt and change the things that they provide to their customers. Key account management has had to adapt to these changes.
A significant difference between traditional “sales” and KAM is that a bespoke and compelling offer should be created and provided by the supplier to the customer. Indeed, one of the criteria when “anointing” a customer as key is that they have significant value potential but require a unique offering to access this value. The whole construct of a key account plan lends itself to the development of a strong and compelling value proposition:
|Value proposition element||Key account planning|
|A description of deep organisation-wide value impact.||Research, insights and significant investment understanding the customer “better than they know themselves”.|
|Consideration of value that goes “beyond just products”||KAM explores a strategy that brings together multiple facets of the supplier organisation (building advanced services around base products).|
|Evidence that you can be trusted||KAM is a constant development of best practice development and sharing. These case studies generate evidence and confidence for customers.|
|Metrics and commercial||It is the supplier’s job to advise how the value that they promise within their value proposition will be captured (in ROI and KPI measures). Customers trust suppliers when they consistently deliver what they promise.|
For key account management business models to thrive today, there must be a focus on developing and delivering strong value for these critical customers. After all, your customer is not buying key account management, they just want you to help them thrive in fast-changing business environments. Use KAM to unlock this potential and build a competitive advantage for you and your most strategic customers.
Explore value propositions in more detail in the Kogan Page book Implementing Key Account Management. Take a look and you will have a higher chance to succeed at developing high impact value propositions for your key customers.
Our work in this area is critical to achieving successful key account management programs for organisations looking to succeed in managing key account customers. For the past twenty years, Cranfield has pioneered the development of Key Account Management research in Europe. Working with world-leading businesses to adopt new frameworks to fully leverage key relationships and strategies. This new frontier knowledge is continually integrated into our Key Account Management Programme.
For more information and content, visit the Cranfield School of Management website.
Posted here with permission from our 2019 Sponsor Cranfield School of Management, written by Mark Davies.
Mark Davies. (2018). Creating Compelling Customer Value Propositions. Available: https://blog.som.cranfield.ac.uk/execdev/creating-compelling-customer-value-propositions. Last accessed 15th May 2019.