What is key account management (Part 2)?

Hanno Wolfram


(Continued fromWhat is key account management (Part 1)) 

In part 1 of this article, we explored the varying definitions of key accounts in the context of key account management. As an aggregate view, the following definitions were proposed:

If we find this acceptable there is still one more question open. What or whom is managed in key account management? Our web survey answers below show that there is yet more diversity of response to this critical question:

A number of people work as Key Account Managers (KAMs). Your previous answers reveal what you understand as being a key account. Could you please state an idea of what or whom you believe your KAMs should manage?

• Product, project.

• KAMs should be highly skilled to manage a range of customers not just prescribers, they should be able to work with purchasing professionals, board level customers, CFOs, formulary groups and health economists. They should have a degree of autonomy that allows them to negotiate terms and conditions, resource investment, partnership projects etc without having to refer to management all the time.

• Mentoring of set customers with high revenue or potential. Attracting new customers with potential.

• People and structures (e.g. networks, hospitals, new provider structures, influencers).

• Access / recommendations for our brands to physicians and then patients.

• What: business, sales, Whom: decision influencers (makers) in the account.

• I believe they should manage the whole value chain policy makers, payers and prescribers.

• The KAM will have to manage different stakeholders depending on the where and when of the decision making process. For instance, it will be different if the product is to be approved, or to support the usage of a product in a hospital.

• KAM’s should manage the relationship between key accounts and the company that they represent. The relationship is a broad word that should include not only sales generation, but ongoing client service, troubleshooting, personal contact, problem solving and new business development.

• What: everything directly or indirectly linked with past present and future sales Whom : everyone involved with “What”.

• Key account management means the management of customer’s relationships that are most important to a company. Development of these customer relations and customer retention is important to business success.

• KAMs need to manage the relationships and influences in the buying unit in order to get a favourable outcome for their firm.

• KAMs identify and manage through appropriate investments of time and budget, the important people within each account.

• Paradox: they have to manage their communication with or to the account but communication/networks is/are per se not manageable (like a project is) but they can track degrees of investments (financially, time, others) and outcomes (responsivity, turnover etc.) but this demands a very elaborate understanding of communication processes and a lot of insight and, last but not least, working discipline.

• What: they key subjects of the contract, the client business needs, the business prospects and the personal relationship. Whom: depends on the contract subject.

• The KAM defines and manages the action plan to develop business. He/she consolidates opportunities, decides who is the best person to present to/speak with and manages global negotiations and client satisfaction.

• Financial decision makers.

• The team of the company that is available to serve the account. He/she is the central face to the customer.

 Imagine your role was to find people to work as a KAM. You would probably start by writing a job description, which would allow you to define what you expect to be done or achieved by this most valuable person. The next step might be to write a profile of required qualifications for your KAMs.

If I had to start this, I could hardly refer to the majority of entries above. This might be owed to the fact that the word “management” might carry some mysteries by itself, but we shall not pursue that here and now.

A major challenge will be answering whom these people can manage and not what should be managed. If you want to manage someone, he or she should be somewhat close to you: basically this does not apply to people in an account. Nor do I believe that revenue and products can be managed either.


“It can be a very wise decision not to assume KAMs as being omnipotent.”


It can be a very wise decision not to assume KAMs as being omnipotent. Many senior managers have already discovered that key account management is not an incremental process of simply moving traditional reps from deciding physicians and sending them into hospitals!

If you are ready to say farewell to the omnipotence of KAMs then you will soon see that people involved in key account decisions have very varied needs: medical, surgical, economical, regulatory, pharmacoeconomic, pharmacodynamic, pharmacological compatibility or legal if you want to close a contract on a tender.

Trying to meet all these, you will need what you already have: back-up people inside your company. If you give full responsibility for the commercial results in an account to your company’s living contact, the KAM, you will agree that his or her managerial task will be to manage those people who can assist, support and help him or her to become successful. These people are working somewhere in your own company and these people should be managed by a KAM. Making them members of the key account management team could have an intriguing side effect.

Managing internal people across different departments is not an easy task at all! These subject matter experts live and work in different worlds as well. The smallest common denominator between a KAM and one of the internal team would be the sender of the regular pay cheque. It sounds like hard work for the KAM to manage such a team and it will require empathy, highly developed networking skills and being extremely good at building robust relations.

But don’t these aspects sound very similar? The KAM needs them with both the people in the account and with their internal colleagues as well. They would be my major issues for a profile of qualification. Above all a person being a KAM or wanting to become one must know in advance, that he or she cannot be omnipotent. If they try to do so they will fail, so perhaps modesty should be part of a KAM profile too?

At this stage, we can attempt a definition for MANAGEMENT in this context:

Hopefully, the above might help us to identify what key account management is and how interesting and challenging the profession of a KAM is. Being a KAM is the first time in your professional life in the field when the capability of working in a team really matters.

They should be or become passionate to identify requirements, wishes and needs within their target audience in an account, and do their very best in involving subject matter experts from within the own company, fully giving up working alone. Being blamed for missing outcomes or celebrating huge and lasting revenue increases by oneself is not really rewarding.

Finally the content of the below table seems to look comprehensive:


One semantic and content detail still appears missing

What do you call people within an account who are involved in this decision making process? 

Let us have a look back into the early ages of industrialisation, the times when departments were first set up, organisational structures were established and producing goods was a real effort involving more than the boss and few more people working around him in a geographical sense.

When industry arose it was a threat to a whole company, not only for bribery reasons, if and when a singular person (remember: omnipotence!) ordered all those varied goods, materials and many other supplies. A very early step was to differentiate these purchasing people by their knowledge, making one responsible for the steel for production, another one responsible for machinery and so on.


“Being a KAM is the first time in your professional life in the field when the capability of working in a team really matters.”


Many battles were fought internally around whether this or that decision was right for cost reasons, quality, and applicability in production processes etc. Someone then had a great idea to solve such dilemmas: What about setting up a team, formed with subject matter experts who had to be involved in a decision making process? Such a unit would involve all those who carry responsibility, have them participate, and introduce the combined knowledge of a company in such most valuable decisions: The Decision Making Unit (DMU) or Buying Centre was born.

So what did we learn from the survey?

To summarise:

1. There is an ACCOUNT, which can be an entity of many kinds, and of course it could be a hospital.

2. Someone with analytical skills identifies those accounts that carry the highest importance according to company objectives, strategy and relative to a portfolio of drugs or devices. These are KEY ACCOUNTS.

3. Finally you find or develop internal people who are able to leverage their various skills for clear insight into where their counterparts inside an account need assistance. This assistance comes from similarly competent counterparts from inside the providing company. Since only your people in the field know the demands of their contact persons, they will identify necessary skills and expertise inside your company, ask for assistance, create and manage a ‘virtual’ team that supports them achieving the wanted results. If you have done this, well done, because you have established professional KEY ACCOUNT MANAGEMENT.

4. We know today that in organisations of many kinds decisions are hardly made by a singular person, but subject matter experts are appointed to participate with their individual expertise in any decision making process. We will call this the DECISION MAKING UNIT or BUYING CENTRE. All contact persons of your KAM within an account should be part of this DECISION MAKING UNIT.

NB: In case of varying indications areas, drugs or products, there will be more than one DMU within a singular account.

Working with key accounts, (remember, they are the entities most relevant for the future prosperity of your company!) is ambitious, needs very different skills, and only allows few mistakes. This is why you can find a synonym for key account management in the literature: Complex Selling.

The difference to a medical representative detailing to a lonely decision maker who should prefer your product when he prescribes a specific treatment to a patient therefore becomes much more simple:

So, we have found what I hope you will agree is a clear definition for key account management and described the role of the KAM.

Now, implementing the operational change to effectively conduct key account management…that’s another question entirely!

About the author:

Hanno Wolfram is the Founder of Innov8 Software &amp, Training, located in Germany. For enquiries about this article he may be contacted at Hanno@Innov8.de.

Innov8 is dedicated to change for the better through implementing the coherent and consistent execution of strategy. In the last 10 years, it has delivered projects in more than 25 countries and addressed thousands of representatives and their managers on 4 continents. Through integration with a network of professionals dedicated to the extraordinary power of the Innov8 methodology, it is following the core guideline and the starting point of any change in organisational behaviour and adult education in general: “I love to learn, but I hate to be taught!”

Does your company understand key account management?