Account-based management has been gaining a lot of attention in the B2B marketplace. As each company searches for a way to optimize their operations, this is the latest that is bringing success for many. But, can you use this newer strategy alongside and existing KAM strategy, or are the two incompatible?
What is ABM/ABE?
Account-based management (ABM) is mainly a marketing strategy, but it can be applied to other areas of an organization. It involves taking a closer look at which accounts are the most profitable type for you and focusing more effort on marketing to those accounts than to others. That’s not to say you should stop all lead generation and broad marketing efforts, but that your main goal is to market to businesses with specific characteristics before others that don’t match the criteria as well.
Account-based everything (ABE) is a play off of ABM that spreads the account-based strategy across different parts of the organization, mainly by combining marketing and sales activities under the same strategy. The idea here is that different parts of the organization should work together to ensure they’re sealing the deal with the most important leads and customer accounts. Instead of looking at each department as separate entities, you consider each other department as another member of a team working to secure revenues from the top accounts.
How ABM Changes Your Focus
KAMs can work within the ABM framework to be more successful in their own efforts. ABM has strong similarities to KAM, which makes it an ideal framework for KAMs to operate under to get better results within the organization.
All customer accounts are important for you, but in most cases your top accounts are bringing in far more revenue than all your other accounts. If you want to experience your highest growth potential, you need to focus more of your efforts on the top accounts than you do on other accounts. Revenue increases from your top accounts will make a larger impact than revenue increases in smaller accounts, which justifies the greater focus on them.
Small-medium accounts and accounts that aren’t an ideal fit for your company are not always worth the extra attention you can dish out. Any growth is positive. However, 1% growth in a small account will not match up with 1% growth in a top customer account. Accounts that are not an ideal fit with what your company offers are also not an ideal focus for your energies, as they may churn at some point when your products or services become replaceable or unnecessary.
Focus on the top accounts that are likely to grow your revenues the most. This is where the true potential is for KAMs, and it can be unlocked by using an ABE approach.
Some of the principles of ABE, such as personalizing interactions with your accounts, are already at play in most organizations with a KAM strategy. Those that aren’t already being used can be implemented to increase success of your efforts.
Defining Your Ideal Customer
Before you segment your customers to find your top customers, you had to understand what made a customer more valuable to your organization. If you didn’t do this, or if you based it solely on revenues from that account, you may need to do it now. You shouldn’t simply focus your attentions on an account because it gives you a lot of revenue.
It’s better to determine what kind of accounts work best with your company, which ones are a great fit for your products and services, and which ones have the highest growth potential. Some accounts with large revenues may only be temporary cash cows without future potential. Lifetime customer value is the more important measure for accounts than current revenues.
Use your data to understand what makes an account valuable to you or not valuable. Understand why some accounts leave and why others have stayed around or continued to grow. When you have your ideal target customer profiled, you can focus on creating a system that meets their needs more fully and encourages their growth.
Data-Driven Account Management
You need to have complete and accurate data on all of your accounts if you want to succeed with ABE. Knowing is half the battle, because you have to make the right moves at the right time for the right accounts. To understand the when, where, how, and who, you have to collect data and glean valuable insights from it.
Data collection and management is an ongoing, continuous process that will be highly involved. It’s one of the most necessary parts of ABE, and also KAM itself. Without the right data on your customer accounts, you won’t be able to make informed and intelligence-driven decisions. Let your movements be guided by solid and complete data instead of operating in the blind or making decisions based on partial data.
Cooperation between Departments
KAMs should already be fostering communication and cooperation between the various departments in an organization. Implementing an ABE strategy also depends on this cooperation to make sure that accounts are getting what they need when they need it. Delays, miscommunication, or the overall inability to get something done for your customer will hurt your KAM efforts.
Cooperation is also necessary when you’re seeking out new accounts. Since you understand all about your ideal customer, you need to share that information with marketing, sales, and all other necessary branches of the organization to make sure more of your leads and potential clients look similar to your ideal customer profile. This is going to increase the value of your marketing efforts and bring in more of the right type of customers.
Impact Versus Effort
You need to be attentive to the number of touches you give each account and the effort put into those touches. Accounts that are more valuable to you should be receiving high-quality, frequent touches to improve the partnership, while accounts with less value do not need this same high level of engagement.
There’s only so much you and your team can do in the amount of time you have. You need to use your time wisely to make the biggest impact you can. If you are using too much of your effort on accounts that don’t offer as high of returns, you may be wasting your most irreplaceable resource.
Make sure your efforts are making the largest impact possible. While you do of course need to pay attention to every account, monitor the amount of attention each account gets so that you’re giving more to those accounts that have higher potential for growth. Don’t use a disproportionately large amount of effort on an account with lower growth and revenue potential than your top accounts. Balance your efforts with the amount of measurable impact they will have in accomplishing your goals.
The ABE framework intersects nicely with KAM, providing an extra layer to the strategic mix your company uses to acquire and retain key accounts. Combining some of the principles for ABE with your existing KAM strategy can lead to even greater success in helping your accounts and revenues grow.