What is KAM?
Key Account Management (KAM) is one of the most enduring buzz-phrases in UK pharma. Such has been the fervor around the sector’s adoption of KAM that one could be forgiven for thinking the model is a pharma industry construct. It is not.
The fundamentals of KAM translate across all business sectors – and pharma can learn much from best practice in other verticals. The problem is very few companies do. Their rationale is simple: pharma’s ‘a specialist industry’, it is ‘different from all the others’. It is a missed opportunity. KAM is, in its simplest form, a systemic approach to maximizing the value of any organization’s most important customers; the same principles apply whether you are selling sausages or marketing medicines. It is time the industry looked outside its own and learned from the best of the rest.
In the past decade, most UK pharma companies have responded to evolution in the stakeholder environment by remodeling their field forces around the KAM model. It is a sensible approach. However, few have advanced their capabilities to deliver ‘true’ Key Account Management. In some cases, it seems that traditional reps have been rebranded as Account Managers, but the tools and training to support them has not caught up with the new approach. As a result, the promise of KAM – highly targeted, differential engagement that drives long-term customer value – gets lost in a traditional ‘numbers game’ where interactions are tactical and product-focused rather than strategic and customer-centered.
Irrespective of customer, companies still largely rely on the ‘clinical sell’. Many do not tailor their approach to speak to the individual needs of the diverse stakeholders that exist within an account. And, crucially, very few approach an account as a ‘key account’. Instead, they rely on connections and strength of relationships to try and drive business – rather than planning their approach in a structured way to identify where the mutual benefit and budget resides, who the decision-makers are and what they need to do to get their solution accepted.
Although these suboptimal practices have clear ramifications for stakeholder engagement in healthcare, they are not exclusive to pharma. Almost every industry encounters a diversity of customers along their commercial pathway. The inherent complexity is inevitable. For pharma, managing engagement across the triumvirate of prescribers, payers and patients is tricky. But the challenges are not unique; every sector has its own version of the ‘holy trinity’. The trick is to develop robust processes that acknowledge and respond to the nuances of your commercial pathway, and equip account managers with planning tools that help them identify key decision-makers and maximize opportunities.
How to develop your KAM capabilities?
If pharma companies want to deliver true Key Account Management they must make the transition from tactical selling to customer-centered strategic account management. For many, that means enhancing their KAM capabilities. But how? An examination of proven best practice in other industries may provide a useful guide.
Here are six steps to ensure your account management capabilities are fit for the future. Note: be clear about what you mean by a Key Account in your organization. Not all customers are Key Accounts. The six steps of ensuring account management capabilities include:
- Craft a clear understanding of what is required
- Assess current capability levels
- Review your development needs
- Develop a capability improvement program
- Involve champions to develop the program
- Outcomes-based against set metrics
Step #1: Craft a clear understanding of what is required
The first step to building a robust infrastructure for KAM excellence is to develop a clear set of account management capabilities you will need to drive success. These will provide a platform for training design, coaching support, performance management and future recruitment. Evaluation of practices in multiple sectors shows that there are seven core capabilities required by all Account Managers:
• Relationship and stakeholder management
• Market and business acumen
• Product knowledge and ‘selling the proposition’
• Innovative and creative problem-solver
• Communication for influence and impact
• Plans to seize opportunities for growth
• Ability to get the deal done
Fundamentally, the first stage of designing a KAM program should be to review your capability requirements and tailor them to reflect industry and market nuances. These capabilities will underpin everything that follows.
Step #2: Assess current capability levels
Perform gap analysis to assess the current level of KAM capability in your organization. This should be guided by the capability framework you have outlined upfront. An effective way of doing this is to deploy online assessment tools that benchmark capabilities against accepted ‘bars’ of high performance. The smartest companies take advantage of ‘Best Practice databases’ that draw on diverse assessments from a range of industries to determine the industry standard.
Step #3: Review your development needs
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Next, review your KAM development needs and prioritize the capability gaps that need addressing. A number of considerations feed into this process. What are your strategic goals and how do they align with your proposition? What processes do you need to put in place to achieve your aims? Who do you need to engage externally to ensure your model works? Who are your key accounts and what do they think? And finally, what are internal stakeholder opinions and how can these inform your plans?
Step #4: Develop a capability improvement program
The fourth – crucial – stage is to develop a program to address the priority capability gaps you have identified. This is all-encompassing and contingent on establishing the learning needs that should be reinforced through interactive training, coaching and embedding activities. A core element is to develop a robust understanding of both the Patient Pathway and the Commercial Pathway and how the two align to drive mutual, long-term value. Fundamentally, this is about understanding customer pain points and the problems they are trying to solve. This understanding is the bedrock of effective KAM and underpins all training to ensure stakeholder engagement is targeted, customer-centric and differential.
Step #5: Involve champions to develop the program
The next step is not a sequential part of the process – it is a thread that runs throughout. Identifying, engaging and mobilizing internal champions is vital. These key individuals will help develop, deliver and embed the program and ensure it has internal buy-in. There is clear evidence across all sectors that without internal champions and ownership, most programs fail.
Step #6: Outcomes-based against set metrics
Finally, ensure your program establishes clear outcomes that can be measured effectively. This key aspect is often poorly done. The best programs incorporate metrics that evaluate two distinct areas; the learning achieved by individuals and the impact of the program overall. Establishing the right metrics is not easy; KAM is about delivering long-term value, which can, at times, be at odds with short-term commercial targets. A good partner can work with you at the outset to agree on a set of outcomes and measures for both individuals and the business. It is important to establish this right up top.
True KAM for pharma
The UK National Health Service (NHS) is a challenging commercial environment where resources are stretched by both growing demand and advanced treatments that require additional investment for patient care. Against this backdrop, KAM is absolutely the right approach for pharma companies whose high-value innovations can help solve customers’ challenges. However, to win, companies must make the transition to true strategic KAM. Pharma’s model will naturally be nuanced, but the fundamentals of KAM – being customer-centric and focusing on solutions not products – are the same across every sector. Ultimately, success depends on building the right capabilities and learning from best practices. Can we do it? Yes we KAM.