Six steps to key account management in pharma
David Southern and Gary Lunt outline six steps to key account management in pharma to enable the sector to adapt to complex and ever-changing NHS pathways and how pharma should look to other industries for best practice in key account management.
Key Account Management (KAM) has become something of a buzz-phrase within UK pharma. The excitement within the sector around the adoption of KAM has been so considerable that it might seem like the principles are unique to the industry. Yet the foundations of KAM hold true across all verticals. The issue is that very few pharma companies look to best practice in other industries to learn how KAM can be best applied. Their rationale, that pharma is ‘a specialist industry’, is a missed opportunity. In its purest form, the KAM approach is a way to maximise the value of an organisation’s key customers using a systematic methodology. It’s time to learn best practice from other sectors: the KAM way.
An evolution in the stakeholder environment over the past decade has led to most UK pharma companies developing their account management capabilities in line with the KAM principles. It’s an approach that has seen success. However, many have failed to make the leap to true Key Account Management. While in some cases existing reps have been rebranded as Account Managers, often the tools and training to support the change in direction isn’t in place. Despite promising the targeted engagement of the KAM model to drive long-term customer value, account managers can become overly focused on product benefits as a means to drive sales. Instead, they should adopt a customer-centred approach to deliver long-term, strategic value.
Regardless of who they are targeting, pharma often rely on the clinical benefits of their offering. Many don’t alter their message or approach to directly address the individual needs of the range of different stakeholders crucial for success. Instead of adopting the KAM approach, organisations often rely on connections and long-standing relationships to drive business. Instead, account managers should adopt a structured approach, planned in a way that identifies and addresses the specific challenges stakeholders face and where mutual gains can be made. An approach that looks at who controls the budget, the problems they are trying to solve and what information they need offer greater chance for success.
While these practices have clear consequences for stakeholder engagement, considerations like these are not exclusive to pharma. Navigating the differing needs of customers along a commercial pathway is a challenge almost all sectors will experience. The issues for pharma in managing relationships with prescribers, payers and patients is tricky but not unique. Each sector has its own inherent complexities. The skill is in developing robust processes that take into account the various complexities of a commercial pathway, and ensure account managers have the tools to plan successfully, identify the key decision-makers and maximise opportunities.
KAM capabilities – how to develop yours
Making the transition from product-focused sales to a strategic, customer-centred approach is crucial for pharma companies looking to develop the ability to deliver true Key Account Management. Companies might recognise the need to augment their KAM capabilities, but may not have a clear strategy to make that happen. Looking at other industries proven best practice could offer a useful framework. These six steps will enhance your account management capabilities and ensure you have what’s needed to deliver KAM now and in the future.
Step 1: Develop a clear understanding of what’s needed
Deciding which capabilities are needed by your business and customers is the first step to developing a robust framework for success. These capabilities will provide a basis for designing training, developing coaching support, and understanding how to manage performance. It will also determine your future recruitment needs. By examining successful KAM in other sectors, the following seven core capabilities have been identified as fundamental to effective account management:
- The ability to manage and develop relationships with key stakeholders
- An astute sense of both the business and market
- In depth knowledge of the product set and unique selling points
- The ability to solve problems and devise creative solutions
- A confident communicator with the skills to garner influence
- The ability to identify and seize opportunities for growth
- The ability to seal the deal.
Clearly defining your KAM capabilities, with industry and market nuances in mind, will provide a solid basis to design your KAM programme.
Step 2: Understand your current capability.
With a firm understanding of your desired capabilities, you will be in a strong position to evaluate the level of KAM capability currently in your organisation and identify any gaps. A good approach is to benchmark current capabilities using online assessment tools. Best practice databases that draw on criteria from a range of industries are a great way to help companies assess their requirements.
Step 3: Identify where your development needs lie
The next step is to identify where you development needs lie and ensure your capability gaps are identified. Doing this successfully is reliant on addressing the following points:
- Set out your strategic aims and look at how they align with your offering
- Establish the processes that need to be in place to help you realise your aims
- Identify the external stakeholders that are key to the success of your approach
- Learn the views of your key accounts and the challenges they are trying to address
- Understand the opinions of your internal stakeholders and how these might improve your plans.
Step 4: Take a structured approach to improve your capabilities
It’s vital to develop a structured approach to address any gaps in capability. This is dependent on having already established the development needs of your account management team. This should be all-encompassing and should be reinforced with a mix of coaching, interactive training and other activity designed to entrench knowledge and capabilities. Developing a robust understanding of the patient pathway, commercial pathway and how the two align is fundamental to driving mutual, long-term value. This boils down to having a thorough knowledge of customer pain points and the challenges they’re looking to address to form a basis for establishing effective KAM. Not only will this underpin training, it will help ensure stakeholder engagement is targeted, customer-centric and differential.
Step 5: The role of internal champions in driving the approach.
This theme runs throughout the process. Individual champions can be vital to developing and delivering an effective KAM programme. They can help embed the programme and ensure internal buy-in. A key part of your KAM strategy should be to Identify these individuals in your organisation and keep them engaged and mobilised. They are fundamental to the programme’s success.
Step 6: Measuring success
The trick here is to ensure your programme sets clear metrics that help measure outcomes. Despite this being a key aspect, it is often poorly executed. Identifying metrics that evaluate both learning achieved by account managers and the overall impact of the programme is the best measure of success. Putting the right metrics in place can be a challenging shift for organisations used to measuring short-term commercial goals. KAM’s value, in contrast, is in delivering long-term, future-focused gains. One way of achieving this is by working with a partner with KAM expertise, who can help you to establish a clear set of goals by which individuals and the business can be measured. It’s crucial to get this right at the outset.
True KAM pharma
In a complex commercial environment such as the NHS, adopting the right approach can be the key to success. With resources under pressure from both increased demand and the cost of advanced treatments, commercial organisations can find it a challenge to deliver. With this in mind, KAM is an effective approach for pharma companies who are able to address customers’ problems with innovative solutions. However, in order to be successful, companies must adopt a true strategic KAM approach. There will be nuances exclusive to pharma, however, the essence of the KAM approach – customer-centric, solutions rather than product focused – hold true regardless of the sector. Ultimately, success is contingent on developing the right capabilities, learning from best practice, and a true commitment to delivering success the KAM way.