3.3 Determination of number of KA accounts

The market organisations need to balance the number of key accounts it can handle with a number that represents enough business potential to make the initiative and effort involved worthwhile. If we adopt too many key accounts they will take the risk of diluting the KAM concept by not being able to allocate enough energy to the gradual development of a single key accounts. If we adopt too few, the KAM concept will be perceived as a marginal activity without enough potential to justify the investment. (Mc Donald/ Woodburn)

The determination of the right number of KA is dependent upon the sales call capacity of the Key Account Manager. The average annual number of sales calls of a territory sales engineer is about 200 to 250, depending on the country and geographical customer concentration per territory.

In managing key accounts a dedicated KA Manager will not be able to make the same number of sales calls. The reason is that the time for one sales call with a KA takes much longer. This can be attributed to the need to cover various buying influencers as well as to analyse various departments in depth. In addition, there is much more administration work due to the requirements of drafting individual key account plans. Furthermore, less efficient travelling is expected due to a wider geographical area. The number of sales calls can be expected to be around 120 to 150. As a matter of fact there will be variations from country to country, for instance, Germany and France offer more concentrated areas than Russia.

In the first two years eight to ten customer visits per year is considered to be the right sales call frequency. The conclusion is that the appropriate number is about 15 key accounts.

Finally, it now needs to be assessed whether the number of 15 KA yields enough potential to achieve sales that brings substantial incremental sales, respectively incremental profit. The calculation of profitability in the next chapter will deliver the required numbers.