The aim of the Preferred Partner approach to Key Account Management is to move the focus of the relationship away from the traditional transactional approach in which the emphasis is on the product and price to one which focuses on measured value and mutual gain.
In the traditional transactional model the supplier is seen simply as one of a number of similar competent suppliers. It is very difficult for the supplier to differentiate itself sufficiently, price dominates the discussion and consequently the margin is eroded.
The move to a Preferred Partner model is a strategic decision which must be taken and supported at the highest level because the change required will impact the entire business.
Those corporations which have made the strategic move to a Partnership approach have seen dramatic change to their Key Account relationships, long terms business and margin.