Mark Davies, visiting fellow at Cranfield, conveys how important is it for key account managers to develop relationships with procurement managers within the customer organisation and, in doing so, gain crucial understanding of their procurement. Capturing the numerical value you, as a supplier, bring to the customer is also a key enabler in negotiations.
Key account managers really need to understand procurement and the buyer. They're critical areas where you have to work with on the customer side. Value works with the customers’ business in other areas but procurement is an area that you have to work with. Procurement is the strategic aspect of dealing with suppliers, they will set the strategy. Buying is the area where it's more operational.
Key account managers need to be focusing on that strategic procurement aspect. They need to build relationships with people in the customers’ business who are setting the policy and who are the strategic suppliers. It's very important for key account management. They’re a way of thinking – there is not a model that can help you to just think in the mind of the buyer. So how might they be positioning you as a supplier, how might they be positioning you versus other suppliers not just of the products or services you offer? You really want to be getting to understand and build a relationship with procurement, so that it can help them to help you.
Negotiation is also an aspect of that. A construct linked in to the value proposition with negotiation. There are aspects that you should always focus on, the real value you're adding. We've developed and expanded traditional negotiation models and thought about always capturing the massive numbers of value that you are creating and use that to negotiate with the buyer and the wider organization - the operational users etc. Always focus on those big numbers of the value adding. If you're doing your job properly as a key account manager you will be providing big sources of value, focus on these numbers.
Want to find out more? Key Account Management and Procurement is covered in more detail in the Kogan Page book Implementing Key Account Management. Take a look to see how supplier companies can improve their key account management relationships with procurement.
Our work in this area is critical to achieving successful key account management programs for organisations looking to succeed at 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.