How Does Strategic Account Management Differ From Key Account Selling?

Most of the time, the sales team initiates strategic account programs. Sales may see an opportunity to generate more revenue by focusing its efforts on the larger accounts. Sales often begins these initiatives with what we call a key account selling approach. Key account selling is a part of strategic account management but it is not the same thing. The distinction between the two is important for our discussion. The following chart distinguishes between these two (of many) approaches in managing an important account. Figure 1-1 isolates the behaviors of a key account selling approach and a strategic account management program. The chart concentrates on behaviors because of the ever-present problem of program names: a supplier may have a key account selling program called a strategic account management program (common) or a strategic account management program called a key account selling program (also common). Our primary interest is in what these firms do with their crucial customers.

Key Account Selling Programs		Strategic Account Management Programs
Under a year By revenue potential Vertical market	Planning Horizon Customer Segmentation	1 to 3 years By revenue potential and strategic criteria: How they prefer to buy Willingness to partner Complementary competencies
Existing products Some custom solutions	Offerings	Existing products Custom solutions Firm competencies
Products and service	Differentiates by	Value delivered over time
Account manager Sales team	Primary Account Responsibility	Account manager who can commit resources Cross-functional team Supplier executives
Short- and long-term revenue Share of customer Competitors	Primary Concerns	Profitability Short- and long-term revenue and profitability Account's business challenges Share of customer
10–25	Number of Accounts per Manager	1–5
Half salary, half commission Sales/product plans	Account Manager Compensation	Generous salary with some incentive bonus Overall account plan P&L of account relationship
Sales Vertical expertise Understands customer's business	Account Manager Skills Required	Sales and/or general management skills Strategic thinking Excels in ability to influence without authority Deep understanding of customer's and supplier's business

Figure 1-1: Key Account Selling Programs and Strategic Account Management Programs—A Comparison

Successful strategic account management tends to be a firmwide initiative, systematically and proactively delivering strategic solutions to multiple contacts at targeted accounts—to capture a dominant share over time.