Customer relationship management: engagement or exploitation

The impacts of economic pressures over the past decade and in particular the financial crisis of global banking have forced organisations up and down the supply chain to reconsider their operating models in the light of increased outsourcing and competitive challenges. The implications of global sourcing and wider movement of labour in recent years has seen traditional outsourcing models for cost reduction create an environment where transactional cost based relationships are in some areas giving way to much broader and perhaps more integrated operating relationships. In this environment the sustainable relationship is no longer simply a question of lowest price but increased focus on value adding engagements.

David Hawkins of the Institute for Collaborative Working notes that most organisations recognise that the more robust the inter company relationship the more sustainable the business flow. But maintaining a purely transactional relationship will engender a relationship which is commoditised whether it is a product or service delivery. More forward looking organisations saw KAM as the opportunity to drive a different form of relationship with their clients, particularly those which saw commoditisation as a risk to their future business and recognised that, by integrating their knowledge and skills with the client organisation, they could increase traction and thus competitiveness. Truly exploiting the benefits of Key Account Management has to be based on changing the dynamics of the relationships with clients to a more holistic engagement.