So, you’ve stumbled upon this website, read a few of our blog posts and you think to yourself, “This Key Account Management thing seems appealing, but I really don’t know if it’s right for my company.”
If these thoughts and doubts run through your head, you’re not alone. Many of our clients were skeptical about key account management at first, and we can’t blame them! When you’ve used one management system for years, it can be hard to justify trying something new. After all, if it’s not broke, why fix it?
But, what if your system is broken and you just don’t realize it yet? Maybe you have a nagging feeling that it’s time for a different type of account management system, and key account management might just be the solution that your business needs to increase productivity, efficiency, and more importantly, revenue.
Today, we’re going to take a look at a few different factors that will show that it’s time for your company to make the switch and invest in key account management. If you can relate to just one or all of these points, then it’s a surefire sign that your company is primed to make the switch.
The 80/20 Rule
First thing’s first, we need to talk about one of the core principles behind key account management. Pareto’s Principle, also known as the 80/20 Rule, dictates that 20% of your inputs account for 80% of your outcomes. This also works vice-versa too, with 80% of your inputs responsible for only 20% of your results.
What does this have to do with account management? Well, when you think about all of the accounts and clients working with your company, you’ll probably find that only 20% bring in 80% of the business. These are your key accounts, and without them, your business could be in trouble.
Pause for a moment and think about all of the accounts working with your company – is there a 20% that stands out? If so, it might be worth the consideration to reinvest in these clients through a key account management program.
You Have Only a Few Important Customers
So, now that we’ve covered the 80/20 Rule, this moves us into another key aspect of implementing a key account management program. Based on the 80/20 rule, are there a few customers that mean much more to your business and bottom line than the others?
If you’re like most companies, the answer is most likely yes. In any organization, no matter their industry, there are always a few customers that mean much more and bring greater value to a company than the others. They’re the customers that you really want to impress in each and every interaction, and if they were to leave you for another vendor, it could mean adverse effects on your bottom line.
Key account management is all about wooing and impressing these customers. Your key accounts are responsible for the success of your business, so you want to make sure that you’re doing everything you can to bring them results, giving them absolutely no reason to leave you for another company.
You Have Long-Term Customer Relationships
Another core component of a key account management program is the focus on the long-term. You want to build strong relationships and maintain them over the long haul. Customers that are loyal to you and have a good working relationship with your company are more likely to purchase premium products from you, forgive your organization if you ever make a mistake, and will also share good things about you with their friends, which leads to new business for you.
Are you thinking about working with your clients for years to come? Be honest here. You can’t fake the relationship building and nourishing stage, and if you try to, your accounts will likely notice and bail.
Instead, you need to focus on where you see the account a few months and years from now. Rather than going for the quick sale, look for the opportunity to make millions from the client in the future. This is accomplished through account plans where you set objective and goals for each of your accounts. If you decide to pursue key account management in your organization, you’ll want to learn more about account planning on the Kapta website.
Land and Expand is Crucial
With key account management, the phrase “land and expand” will become a mantra for your account management team and organization as a whole. The goal in key account management isn’t to simply land the big contract, but it’s to also expand on the relationship.
Think of it like you’re planting a plant; you can’t focus on how small the account is today, but instead focus on nourishing the relationship with hopes that you will become mutual success partners in the future.
Expanding relationships can be easier said than done, but with a talented team and powerful software solutions by your side, building your relationships and kicking your key account management program off to a good start isn’t nearly as challenging.
You Work in a Concentrated Industry
The final sign to look for to show you that it’s time to invest in key account management relates to your industry. Some industries are more crowded than others, but if you work in a niche that only has a few suppliers, you should definitely invest in key account management.
Here’s why: if there are only a few vendors and suppliers in the market, your customers likely don’t have many choices when it comes to who they choose to work with. For this reason, you’re likely neck and neck with your competitors, and even the smallest factors can make or break your business and the success of your customers.
Key account management is one of the best ways to differentiate yourself in a small market, and your customers will notice a difference in the services and care that you provide. When you invest in key account management, you’re investing in your customers.