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berg is well aware that achieving continued success means hitting a target that‘s moving in at least two directions at once. 3. Key Account Management: a drastic anizational change Key Account Management is the process whereby suppliers strive to operationalize their account relationship strategies through providing an integrated product/service offering to selected customers. Especially in cases where a large percentage of a pany‘s sales volume is realized by a limited number of clients, the effects have been very positive. However, turning an anization into a client focused one is not easy: it is surely insufficient to promote some successful salespeople to account managers. Key accounts expect more from their suppliers than customized products. In order to withstand petitive pressure themselves, they have to be able to depend on their key suppliers for perfect munication and logistics, just in time delivery, research, product development and design, innovation, quality control, maintenance and repair, keeping up with the latest technology and even strategic planning, and all of that at petitive prices. The representative of the supplier, the Key Account Manager, has to be able to coordinate and deliver these benefits. No longer is the sales function a munication tool of the marketing manager, but the final authority for a large number of strategic decisions. Companies today must work to develop stronger bonds and loyalty with their ultimate customers. In the past, many panies took their customers for granted. Customers often did not have many alternative suppliers, or the other suppliers were just as poor in quality and service, or the market was growing so fast that the pany did not worry about fully satisfying its customers. A pany could lose 100 customers a week but gain another 100 customers and consider its sales to be satisfactory. Such panies, operating on a ―leaky bucket‖ theory of business, believed that there would always be enough customers to replace the defecting ones. However, most panies now realize that this high customer churn involves higher costs than if a pany retained all its customers and acquired no new ones. The need for customer retention 10 So today, outstanding panies go all out to retain their customers. Competition is increasing, while the costs of attracting new customers are rising. In some markets, it might cost five times as much to attract a new customer as to keep a current customer happy. Offensive marketing typically costs more than defensive marketing, because it takes a great deal of effort and spending to coax satisfied customers away from petitors. Unfortunately, classic sales theory and practice centers on the art of attracting new customers rather than retaining existing ones. The emphasis has been on creating transactions rather than relationships. Discussion has focused on presale activity and sale activity rather than on postsale activity. Today, however, more panies recognize the importance of retaining current customers. According to one report, by reducing customer defections by only 5 percent, panies can improve profits anywhere from 25 to 85 percent. The best approach to customer retention is to deliver high customer satisfaction and value that result in strong customer loyalty. Implementing the Key Account Management Approach Key Account Management contains a strategic, operational and tactical level: * Strategic Level: Long term business relationships with selected partners * Operational Level: Consistent business solutions, * Tactical Level: Adaptation of management structures to customer work Thus, KAM is not a decision that can be made overnight. Initiating and embedding KAM within an anization is a longterm process and its adoption has significant implications for resource allocation, anizational structure, and supporting infrastructure. The adoption of KAM processes also threatens existing power structures within an anization and required considerable skill in reconciling new strategies and present personal interests. The important issues to be addressed in the starting stage of a KAM Program are identified as the clear definition and selection of key accounts. This is important from two perspectives. First, if there is no clear consensus on the criteria for key accounts, then choices about individual account selection bee political. Second, pany resources are limited and the selection of the wrong key account will not produce optimal results. While factors such as size, potential sales volume, and share of business are important for selection, other anizational and relational factors were taken into account by the most experienced panies using KAM. In addition, successful KAM programs looked for technological synergy, profitability, growth potential, strategic alignment, cultural fit and a willingness to partner with the supplier. In the Developing KAM Competencies Stage, four key elements are identified: * Developing processes related to the offering which includes: value added services, reporting and information sharing, single point of contact, senior management involvement, dedicated sales team along with local support, and preferential terms. * Providing support for KAM with core processes like Supply Chain and Logistics, Interaction Process, Collaborative Design, and Information/Communication. * Account Manager Competencies. These skills go far beyond the traditional relationship management skills and are encapsulated in the title Political Entrepreneur. The account manager role is political in the sense that, often without direct line authority, these people must exercise influence。M‘s? It could happen! Escaping the middlemarket trap: An interview with the CEO of Electrolux Hans Str229。s accumulated wealth—60 percent by 2025. Their imp