WHY IS IT SMART TO USE KEY ACCOUNT MANAGEMENT (KAM) OUTSOURCE?
May 18, 2022
It is normal and understandable that every company considers its products to be the best. Problems arise when goals and ambitions exceed reality, unable to see and assess the real situation in the market. Although sales managers and professionals in a company often feel that they know their product best, in most cases a side view is very useful - where to sell the product better, what to focus on, and so on. This is where the Key Account Management (KAM) function can contribute, which can be successfully outsourced by relying on external expertise.
Distributors vs. KAM outsourcing
Many confuse key account services with the activities of a distributor, so let's recall the main difference, because KAM differs from a distributor both financially and structurally. In the case of distributors, the customer outsources the production of the service to another company, which carries out the service on its own behalf, for which it charges a significant turnover, which usually ranges from 25 to 40% of purchase prices, reducing the customer's profits and market competitiveness.
In turn, KAM represents the customer and his brand in store chains, the respective agreements are concluded directly between the manufacturer and the buyer, KAM only coordinates them, finding the best conditions for the customer. In addition, in this case, the customer can offer the store chain more attractive prices and increase their profitability.
KAM outsourcing in Latvia
In the Latvian market, key account management (KAM) outsourcing is provided by several companies, including the marketing agency BSMS, which has considerable experience in providing key account services.
"Implementing key account management through outsourcing can improve your company's market position and market coverage, as well as promote more productive use of internal resources, which ultimately means more transactions and higher revenue," says Uldis Jaunžeikars, BSMS key account specialist.
The main benefits - professionalism and experience
By outsourcing KAM to an experienced company, you will get a professional and individual approach that is tailored to the needs of your company and product. It is worth knowing that this service is provided by a team that works with store chains on a daily basis for years, therefore knows the nuances of these networks, is able to evaluate which means will be most effective in achieving customer goals, and knows how to communicate correctly, accurately and purposefully with key people. returns.
We have already mentioned the importance of experience, but let's emphasize it again, because KAM is usually provided not by one person, but by a team of professionals working with all major store chains, trusted not only by Latvian but also European suppliers and manufacturers in various product groups. manufacturers gain invaluable experience in stores, reaching or even exceeding their sales targets.
Valuable contacts, efficiency and financial value
Imagine - if you decide to provide KAM (key account management) with your company's internal resources, ie when hiring a new employee, how knowledgeable and competent he or she can sometimes be, it can take several months for him or her to make the necessary contacts with the right sales and marketing staff, or to re-establish these contacts quickly, for example in the event of staff rotation. In addition, finding and training such an employee can be time-consuming, but by outsourcing KAM, you can start promoting the product right away by simply introducing the service provider to your products, preferences, and goals. Let's not forget about the financial benefits, because you will not have to pay this employee's salary, bonuses, invest in his work equipment, work car, computer, fuel and other items that make up a large item of expenditure.
Business continuity and time savings
If you implement KAM internally in your company, it is often difficult to ensure business continuity, as employees go on leave, fall ill and have to take over their responsibilities during these periods, while in the case of KAM outsourcing, operations and communication are provided on an ongoing basis.
We all know how precious and valuable our time is. By outsourcing KAM activities, the customer can focus on more important goals, brand and company development, strategic direction, less time spent on human resource management and day-to-day processes, which often takes a lot of time to focus on.
The most important thing. KAM acts as your interest representative and coordinator, finding the best conditions for your company and product. By engaging KAM outsourcers, you stay the owner of your brand, and a good host, because now you have more time to focus on the most important, strategic direction, growth, new perspectives.