NEXT GENERATION KEY ACCOUNT MANAGEMENT: A New Prescription for Biotech
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- Evelyn Beasley
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1 NEXT GENERATION KEY ACCOUNT MANAGEMENT: A New Prescription for Biotech
2 Introduction Change in the healthcare landscape is happening and is going to continue happening, whether we want it or not. Many of the drivers influencing change in healthcare are happening across all sectors: the evolution of new technologies, increasing competition both domestically and internationally, more sophisticated (and more skeptical) customers, stiffer federal regulations, and more production than demand. Although the biotech industry is often regarded as niche, with its own distinct set of challenges and responses, the fact is that broad changes in healthcare are impacting customers in similar ways, and in turn, customers are changing in similar ways. From hospitals to health systems to Urgent Care centers, all healthcare institutions are building the capabilities to improve the quality of care, reduce costs, and improve the health of entire populations. These changes have led to the rise of mergers and acquisitions, the development of Accountable Care Organizations (ACOs) and Integrated Delivery Networks (IDNs), and increased capabilities to analyze economic performance, treatments and patient outcomes. Responding to the evolving needs of customers demands a new approach. Rather than completely reinvent the wheel, however, biotech companies can learn from strategies that have long been used by other industries to adapt to change. One of those strategies is key account management (KAM). This whitepaper offers a blueprint for KAM, starting with the basics and touching on next generation strategies. 2 Next Generation Key Account Management: A New Prescription for Biotech
3 Back to Basics: What KAM Is and What It Isn t Key accounts aren t just big-money customers; they are strategically important to your company s growth Key account management is much more than selling to big customers and dedicating sales reps to those big customers. This ill-conceived perception and tactic is merely transactional-based sales masquerading as key account management. True key account management is a corporate strategy that focuses an entire company on building mutually beneficial relationships with strategically important customers. Key accounts aren t just the big-money customers; they are corporate partners who have a strategic role to play in your company s growth and vice versa. As a corporate strategy, key account management has diverse demands that impact every department in the company, from sales to marketing to fulfillment. According to the Key Account Strategy & Management Practice Group, KAM requires: A never-ending drive to add value that can be identified and measured Laser-sharp clarity on profit and loss Deep customer insights and actionable knowledge Simple and common measurements Clearly defined roles, responsibilities and incentives High-caliber Key Account Managers with consulting and problemsolving skills Short, simple, actionable plans that are driven by defined opportunities and are regularly evaluated through formal reporting Simple, effective processes and tools 3 Next Generation Key Account Management: A New Prescription for Biotech
4 Taking Your KAM Pulse Many biotech companies are already using key account management, or are preparing to a quick Google search for key account management biotech returns pages and pages of job listings for Key Account Managers. But to do key account management well, it is critical to assess your current capabilities before launching a company-wide strategy. Ignoring this critical step could, ultimately, lead to unrealistic (and unmet) goals, bottom-line loss and staff frustration. The following diagram illustrates four questions that biotech companies should ask before proceeding with a key account management strategy. DO YOU HAVE ADEQUATE CUSTOMER INSIGHTS? Make a list of all decision-makers by key account and itemize their drivers and needs Look to historical data and qualitative data from conversations for additional insights ARE YOUR CURRENT MODES OF INTERACTION EFFECTIVE? Identify how customers are currently engaged and evaluate the efficacy of each channel Identify new options for communicating with key account decision-makers WHAT ARE YOUR PROCESSES FOR MANAGING MAJOR ACCOUNTS? Identify who does what and how those tasks are handled Identify gaps in processes Determine where improvements need to be made to allow for key account management WHO HAS THE SKILLS TO BE A KEY ACCOUNT MANAGER? Define the roles and responsibilities of the Key Account Manager Identify core skills and experience (project management, consultatiive, negotiation, problem-solving, IT) Look outside the sales team for talent 4 Next Generation Key Account Management: A New Prescription for Biotech
5 Next Generation KAM Essentials Committing to key account management is a testament that you understand your customers needs have evolved, that they have become much more sophisticated, and that they are approaching healthcare more holistically than ever. Still, many biotech and life sciences companies are lagging compared to other industries. HDS previously outlined five steps to successful KAM: 1) Select key account; 2) Refine contract basics; 3) Identify talent and train them; 4) Align the KAM team; and 5) Measure and build. Getting these five steps right is critical, but to keep up with changes in the landscape, biotech companies must also: Develop a comprehensive profile for each key account. The first step should be to develop a key account profile with information such as: company goals, markets and positioning, industry trends, competitors, company structure, and corporate relationships, including affiliations and networks. A strengths, weaknesses, opportunities and threats (SWOT) analysis can also be helpful. By developing a deep understanding of each key account, you can better understand each account s long-term potential, and customize that account instead of using a one-size-fits-all approach. Identify the new decision-makers and their needs. Changes in the healthcare landscape have led to the shift from sole decision-making power to collective decision-making, with a variety of drivers and needs. While Physicians will naturally be driven by clinical needs, the expanding role of other clinicians, such as Nurse Practitioners and Physicians Assistants, are also impacting clinical decisions. The skill set of hospital and health system administrators is also changing; now more than ever, hospital executives have backgrounds in business and technology. 5 Next Generation Key Account Management: A New Prescription for Biotech
6 Keep customization simple. A common trap in key account management is the tendency to customize key accounts to the degree that they become unsustainable. Avoid that trap by focusing on key areas such as pricing, service gaps and growth opportunities. Look for opportunities to create joint-value partnerships. A broad analysis of the healthcare supplier landscape shows that unique partnerships are forming between suppliers and companies from other industries and sometimes customers. Medical device companies are joining with tech companies to create innovative mhealth technologies and apps. Pharmaceutical companies are forming novel partnerships with teaching hospitals. Biotech companies should also be on the lookout for opportunities to collaborate with customers and companies in other industries to create joint value particularly in areas that address triple aim goals. 6 Next Generation Key Account Management: A New Prescription for Biotech
7 Building Marketing Muscle The best Key Account Managers possess a variety of skills: they are able to identify and prioritize key accounts and measure their performance; they can develop a deep understanding of the customer; they can develop powerful, co-created strategies; they are excellent communicators; they are skilled negotiators and conflict managers; they can galvanize team members from multidisciplinary teams behind key account goals and so on. Key Account Managers can take a proactive role in developing rich patientcentric content that clinicians can use to improve treatment acceptance. One of the most important strengths of a Key Account Manager, however, is the ability to talk to customers, identify their needs and create value propositions that are mutually beneficial. This set of skills is the marketing aspect of their jobs, so in this way, Key Account Managers must continuously develop their marketing muscle. Powerful marketing skills enable Key Account Managers to have insightful and rich conversations with the decision-makers of key accounts and to view partnerships holistically. A holistic view of biotech customers tells us that there are tremendous opportunities to build marketing power not only with key accounts but also with customers of key accounts namely, patients. Consider the growing efforts of pharmaceutical companies that are developing patient-centric content, particularly online. The focus on business-to-consumer marketing has occurred in response to end-users of pharmaceuticals patients who today are more informed, more likely to air out their grievances online and more likely to refuse treatment. Understanding this, Key Account Managers can take a proactive role in facilitating the development of patient-centric content to build brand loyalty and counteract negative media. This includes creating content that informs and educates, which Physicians, Nurse Practitioners other clinicians can refer patients to while interacting with them in the exam room. Keeping a pulse on patient information, cost-cutting measures and public health, and providing that information to key accounts is another way for Key Account Managers to exercise their marketing muscle. Providing relevant information to key account decision-makers demonstrates a true understanding of their challenges and needs. 7 Next Generation Key Account Management: A New Prescription for Biotech
8 Conclusion Many biotech companies are struggling to keep pace with the evolving needs of their customers. Key account management (KAM) offers a robust alternative to the traditional buyer-seller model, enabling companies to shift from a transactional-based approach rooted in sales to a strategic, partnership-based approach that requires company-wide buy-in and participation, plus talented Key Account Managers with a variety of skills. The tips in this whitepaper can help biotech companies avoid common KAM errors that occur when plans don t account for the full scope of customer needs, processes and customizations are overcomplicated, and Key Account Managers lack the necessary competencies. Next generation KAM requires deeper customer insights, including knowledge of new players and institutional affiliations. Utilizing a data solution that provides a 360-degree view of healthcare providers and healthcare organizations can give biotech companies the competitive edge they need to take KAM to the next level. For a customized data solution to support your KAM needs, contact Healthcare Data Solutions at or visit 7 Next Generation Key Account Management: A New Prescription for Biotech
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