Introduction

Key account management and sales are not the same thing. Key account management does not mean selling to big customers – it is not just a higher form of sales or a synonym for sales to the C-Suite. While KAM may engage with the customer’s C-Suite, the process involves much more than the relatively straightforward sales element.

Many assumptions made by senior managers are incorrect. For example, they might believe:

• You can train key account management in a two-day training course

• Account management should be measured by the number of calls made to the customer

• Measuring customer margin is unnecessary

• Results from a KAM initiative should be visible within a few weeks or months

If you are an experienced key account manager, you likely already know this. However, if you are new to account management, a senior manager without experience in this area, or a manager from a supporting department, this may be news to you – and important news at that.

This article outlines the main differences between sales and account management, emphasising that one is not inherently better than the other. Instead, each has its appropriate circumstances.

Targets in Sales vs KAM

Sales

Sales typically begins with a focus on what the supplier wants to achieve. Establishing a sales target is a common first step, often driven by internal goals. The CEO or CFO may set the overall sales target, which is then allocated by the Sales VP. Salespeople are given targets, usually expressed in revenue terms. They may also have margin targets, though their ability to influence margin is often limited, requiring managerial approval for price changes.

KAM

In contrast, KAM starts by evaluating the measurable opportunity to grow the business with a key account. This avoids setting unrealistic growth targets, such as aiming to double business where no further opportunities exist or allocating minimal growth targets where significant potential lies. Realistic targets ensure the right level of resources is allocated to each account.

Whereas sales targets typically measure revenue only, KAM targets consider both revenue and margin.

The Process of Sales and KAM

Sales

Sales is a linear process aimed at achieving a specific sale. In some organisations, the process begins only in response to a request, such as an RFP or tender. Steps may include:

1. Customer needs analysis

2. Confirmation of needs

3. Sales presentation

4. Handling objections

5. Closing the deal

The focus is short-term, concluding when the deal is won or lost. If successful, the customer may be handed over to another team to implement the agreement.

KAM

Account management is more iterative and long-term. It involves continuous learning about the customer’s business, developing relationships, and identifying opportunities to add value. The process doesn’t start or end but evolves over time.

KAM is proactive. Unlike Sales, which often reacts to customer requests, account managers identify and present opportunities to the customer, leveraging a deep understanding of their business. This proactive approach positions the supplier as the single preferred partner.

Adding Value Through KAM

In account management, the focus is on adding value to the customer’s business. This requires a deep working knowledge of the customer’s operations. Unlike Sales, which often trades volume for margin, KAM aims to maximise value without sacrificing margin.

Differentiation

Successful account managers differentiate their offerings by:

• Identifying unique ways to add value

• Avoiding price-driven competition

• Positioning the supplier as indispensable to the customer’s success

Differentiation reduces price sensitivity and highlights the value the supplier brings. If price remains the central focus, it may indicate insufficient differentiation or failure to demonstrate added value.

Summary

Sales and KAM serve different purposes:

• Sales focuses on short-term sales targets, often trading volume for margin and responding to customer requests.

• KAM aims to develop long-term relationships, adding value to the customer’s business to win and maintain desired business at high margins.

KAM is resource-intensive and suitable only for high-return customers. Sales remains appropriate for the majority of customers, addressing short-term operational needs.

While reality often blends elements of sales and KAM, treating KAM as an extension of sales can lead to disappointment. The two approaches require distinct strategies and mindsets to succeed.