Key accounts are those that are the most valuable to the business. These are the clients whose loss would make a significant impact, whether that’s purely financial or reputational too. Given their importance to any enterprise, it makes sense to invest time and resources in key account management that nurtures these critical contacts. But how do you make sure that key account management is generating more sales and entrenching longer-lasting relationships, as opposed to increasing cost and lowering margins?
Key account management – the when and how
When you adopt key account management – if you haven’t already – depends on your particular business. You may choose to wait until you have a dedicated key account team or until it’s obvious that your competitors are reaping the rewards of this kind of investment. For key account management to be really beneficial, a relatively long sales cycle is required and this type of programme often works best where there is upselling and cross-selling potential.
It’s important to make the distinction between key account management and selling – sales is often a very short-term perspective whereas key account management is all about prioritising the future. Identifying key accounts isn’t just about revenue. Other criteria may also be important, such as cultural fit, solvency, the possibility of becoming a channel partner and product fit.
Improving key account management
Make sure your team has the right skills
Effective key account management is all about the people who you assign to do it. They should have an in-depth understanding of the client company, from strategy to market position, and able to provide custom services, offers and products, as well as handling both short and long term planning. The right training can make all the difference when it comes to generating real ROI on key account management investment.
Delegate different responsibilities
Separate your key account management team from your sales team. As already noted, the two are not the same thing.
Create a customised key account management plan
The purpose of the plan is to help you identify where the opportunities lie when it comes to growth, what the potential obstacles are to that growth, as well as where competitors present a threat. Key information for the plan includes account targets and strategy, as well as information about the customer, such as business plan and financial health.
Be selective in terms of the accounts that you focus on
Define your key accounts using a set of established selection criteria and regularly review whether these are providing the right foundation. You’ll also need to review the accounts you define as key accounts fairly frequently, as relationships can change over time.
Have an infrastructure
A CRM is essential to ensure that you can keep track of interactions with key accounts and make sure every opportunity for growth is taken.
Track and measure
What you’re looking for is a constant upward trend in terms of the account’s engagement and loyalty. Part of the process will be regularly checking in with the client to get their feedback about their experience with you.
A sound key account management process is essential for any business – our Developing Major Accounts course can help any of your salespeople currently trying to develop skills in this area to deliver more to the business overall.