The process of selecting the right customers for your Key Account Management programme should not be a difficult process, certainly when compared to some of the structural issues that arise from key account management. Regrettably many organizations and individuals initially approach this crucial practice in an often laid-back manner, only later, down the line is it realized that future decisions are made more difficult due to this early selection process being handled incorrectly.
It is important that key customers fit your organisational strategy; this will assist in ensuring that the key account makes a major contribution to your and their combined achievement. Your key account selection should include these and only these clients, if the selection is weakened by clients with unrelated agendas the account will not respond favourably to your strategy. You also risk being unable to demonstrate positive returns from the key account management programme which would therefore risk its and your initiative. There will always be pressure to add unsuitable clients, these must be resisted and using specific objective based selection criteria will assist in deflecting such pressures.
One of the first decisions that need to be made is the volume of accounts that can be managed by the key account programme, from an individual and company perspective. Regardless of the size of organisation the number of key accounts will likely be between 15 and 35, but certainly no more than 50.
Ensure that any selection criteria and client lists once reviewed by senior management are then considered by staffs who know the customer in more detail. These criteria are then applied to assess the customer's attractiveness to your company. You will then need your customer's view of you as their supplier; this is extremely important and will range from customer to customer. Once you have collated this information it will be easier to define what type of key customer they are, therefore enabling you to apply a specific strategy that best suits their business requirements. These for example, could be along the lines of the following four groups, top key customers (investment for growth), strategic key customers (strategic investment), status key customers (proactive maintenance), key customers (ongoing management for cash).
The above approach will enable you as a supplier to build a far superior view of your customers and will enable your organisation to focus decisions and further expectations about them, this is far more practical and commanding than a standard key customer list that many suppliers continue to use...