KAM in professional service firms: challenges and answers
28th January 2017 | Rodrigo Guesalaga and Hayk Petrosyan
Surprisingly little research has been conducted to uncover the major challenges for KAM implementation in professional service firms. Here, the authors discuss how to identify and address them.
Professional Service Firms (PSF) provide specialised advice to their customers, and are characterised by knowledge intensity, low capital intensity (in fixed assets), and a professionalised workforce, which makes them distinct from companies in other sectors, such as manufacturing or retailing. Some examples of the services that PSF provide are law, business consulting, architecture, and accounting.
Due to the nature of their business – based on intangible resources and capabilities (mostly specialised knowledge) – PSFs are generally solution oriented as they need to adapt their value offerings to the specific needs of a particular client. Both relational and consultative approaches to customer management are commonly required, and usually a significant portion of a PSF’s business is concentrated in a few important accounts. Therefore, effective key account management (KAM) seems an imperative priority for professional service firms.
In our experience working and interacting with several PSFs, we have observed that these companies often struggle to implement KAM programmes. Sometimes there is a lack of teamwork in managing a key customer due to an individualistic attitude of the expert professional. This was the case at LawCorp1; as one of its executives said: “Some experts are used to working with their clients, want to do individual relationships, and don’t want to share them with other partners.” Another common problem that PSFs face has to do with the “ownership” of a client: how can PSFs make sure it is the company that owns the customer relationship and not the expert professional?