With the growth in trade funding from 5% to 20% of sales to the trade, possibly at a cost to above-the-line budgets in a zero-sum game, it is perhaps useful to explore the possibility that an equivalent shift is taking place in the potential power of KAMs vs. their colleagues in brand marketing. Adding to this the growth in trade concentration having resulted in fewer, larger customers, it is probable that a KAM is now managing a business unit far larger than a key brand in terms of sales and profits for the company.
Ownership of the consumer
Whilst the issue of brand integrity and priority should never be in doubt, the question of ultimate ownership of the brand consumer is also being challenged. If ‘ownership’ of a consumer is defined by extent of knowledge, then retailers combining Clubcard and scanning data to produce a shopper-profile that includes name, address, age, sex, family structure, income-level, state-of-health, recreations and travel, dietary habits, insurance, debt-profile and bank-balance, have to have a greater claim to ownership of the consumer than a marketer knowing that the consumer is probably grey-haired and living alone in the country, two children having left home… The KAM represents potential access to that retailer insight.
Moreover, the retailer’s attempt to maintain a one-to-one personal dialogue with a consumer-shopper has to represent more potential for development and use of insight than the marketer’s use of broadcast and increasingly fragmented media to communicate with a consumer already saturated by media coverage and resistant to non-focused messages.
As private-label development is focused more on Generations 3 and 4 (equal and better functional performance than national brands, respectively) so the retailer’s influence over consumption behaviour is increased. The KAM, as manager, coordinator and information expert on the retail business unit, is by definition closer to the real action in terms of changing dynamics in the market and impact upon company performance.
The KAM as a business manager
As the KAM becomes more of a professional business manager, working with demanding trade partners that represent increasingly effective access to the brand’s consumer profile in their shop traffic, so the key customers increase their share of, and influence upon, the company’s business. The trade budgets are larger, and the KAM’s use of outsourced help is increasing…
In the process the role is becoming a gateway for service providers hoping to replace revenue streams that previously originated in traditional media. However, this new target of service-providers probably represents far more of a networking challenge than traditional points-of-contact with client companies.
The KAM has to be more pragmatic and results-focused than marketing colleagues of equivalent status. What the KAM lacks in knowledge of the subtleties of media dynamics and drivers can be compensated for by their unashamed emphasis upon deliverables. They are in a better position to quantify and relate investment directly to result on shelf than many spenders of media money…
Finally, when it comes to the price, it might be useful for service-providers to bear in mind that KAMs are accustomed to dealing with the world’s toughest buyers, and negotiate by reflex, with some success, given their day-to-day practice on best-in-class practitioners. Whilst it might appear that service-providers should bypass the marketer and appeal directly to KAMs, a more productive route to restoring and building brand equity probably involves a three-part dialogue based upon a realistic assessment of consumer need, the retailer’s shopping insight via the KAM, the brand owner’s consuming insight via the marketer, and the demonstrable ability of media to deliver appropriately, via the service-provider, with an emphasis upon cost-effectiveness.
