Key Account Management is the art of engaging with high-value customers to promote a long-term, strategic partnership that results in organic growth. Because high-value customers appear across multiple industries, KAM is useful for many different types of organizations.
For some organizations, especially product-driven companies, high-value customers are a subset of the total customer base. However, for companies who make their money providing complex services to their clients, nearly every client is a high-value client (or they should be).
Here’s a radical thought for service companies: What if instead of thinking of yourself as an ad agency, an engineering firm, or a contractor, you thought of yourself first and foremost as a client service organization, with a specialty in advertising, engineering, or building.
On the surface, it seems like a subtle shift. But it can deeply impact the way you do business, and it can help you set the stage for resilience and growth in the face of change from markets, competition, and customers themselves.
In this post, we’ll explore why service firms need Key Account Management to realize their full growth potential in today’s world—and some of the ways they get distracted from real customer engagement. We’ll also look at key indicators you might need KAM in your own firm, as well as how to get started.
Customers are Changing
In today’s world, customers are harder to engage and easier to lose than ever.
Even if you work in an incredibly niche field—say, you’re an engineering firm with a specialty in municipal wastewater treatment and management—it’s important to remember that at the end of the day, your customers are still consumers in the world. They have smartphones and streaming subscriptions and social media accounts.
Like all of us, your customers have grown accustomed to getting exactly what they want, exactly when they want it—and they’re bombarded by targeted reminders that if they’re not happy with the service they’re getting from you, there are plenty of other options out there.
The way to build resilience in the face of a changing customer landscape is to build meaningful, strategic relationships with your customers. The more you know about and respond to their broader business goals, challenges, and opportunities, the harder you are to replace.
KAM helps you build the kinds of relationships that last. And they’re especially important if you do work in a niche field, where the customer base is limited. Take the example above: There are only so many municipal wastewater treatment facilities. You can’t grow your market by making new customers, the way some consumer products can. So it’s even more important to protect the relationships you have, especially as customer demands continue to evolve in the modern world.
Many people nod their heads when we say that client management is important in a changing consumer landscape. But they still get distracted when it comes to their own client management. Here are 2 common mistakes we see service firms make:
- Diverting too many resources to new business. It’s fine to want to win new business. But it’s not fine to consistently divert resources away from existing customers in order to do so. Not only are you doing a disservice to your existing customers, but you’re also doing a disservice to yourself. New business growth is much more costly to your organization than organic growth, and existing customers are much more likely to purchase premium services and add-ons than new customers. If your strategy demands you win new business, invest in that strategy by hiring a team of people to focus on new business, so the rest of your team can continue to provide exceptional service to your company’s biggest asset: Your existing, strategic clients.
- Focusing too much on your own goals, rather than your customer’s. Truly putting customers first is the exception, not the rule. If your growth goals are framed around the numbers you want to hit, or the services you want to sell, you’re not setting yourself up for long-term success. If instead, you start with the numbers your customers want to hit, and the services they need you to provide, you’ll set yourself up for sustainable success.
Key Indicators You Need KAM
So what are some practical indicators that your firm is a good fit for Key Account Management? Let’s look at a few.
- Most people work on fewer than 5 accounts. Even if you don’t yet have designated account managers (more on that later), one indicator you need KAM is if most of your employees—writers, engineers, project managers, etc—are kept very busy by just one or a few clients. This means your clients are very high value, and you need to be setting aside resources to invest in the relationship itself—not just the work.
- Your customers are strategic, not transactional. You may have a contract open with a client, but ask yourself: Is there more work to be had? Maybe you could take on more contracts with them now, or maybe they’re a stable entity with work to offer well into the foreseeable future. Returning to the engineering example: If your client is a municipality or other government entity, chances are as long as they have residents, they’ll have needs and an income stream to pay for them. Clients with room to grow are strategic clients, and they need to be managed differently than purely transactional clients. In short, they need KAM.
- You are constantly working on deliverables. The busier you are in the day-to-day, the more important it is to set aside time and space to focus on the relationship itself. This is how you uncover your customer’s needs, as well as their current level of satisfaction. It also gives you a chance to make sure you’re delivering work that meets their big picture strategic objectives. In the daily scramble to get things done, it’s nearly impossible to see the forest for the trees, unless you have a KAM whose job it is to stay focused on the relationship itself.
- You work in multi-person, multifunction teams. It’s easy for information to break down as it’s passed from one person or team to another. KAMs are the quarterbacks of cross-functional teams, helping to ensure everyone is working towards the same customer goal.
- You constantly need to show progress and demonstrate value. Remember, customers are easier to lose than ever. At the very least, they need regular status updates; in a perfect world, you’re also conducting meaningful account reviews at regular intervals to measure progress, identify opportunities for improvement, uncover new or different needs, and check in on the health of the relationship.
If any of the above are true for your firm, you probably need to implement a key account management function. So let’s look at how you do that.
Getting Started with KAM
Change management is a fascinating, robust area of study, and we won’t attempt to summarize your entire change management approach here. But we will say, in order to implement key account management in your service firm, you need 3 main components: People, process, and technology.
People: Your KAM Team
A common mistake service firms make is to ask their people to wear too many hats. So, you might be an engineer working on the project design itself while also communicating with the client directly and disseminating feedback to your team. Some people can wear both hats for a while, but burnout is almost always inevitable. You need people whose job it is just to manage client relationships, if only because of the sheer amount of time it can take out of a day to communicate with clients, clarify the feedback, follow up with an action plan, and make sure that plan is clear for the team.
Another benefit of setting up a KAM team that’s just slightly removed from the everyday work is that they are better able to listen to the client without feeling frustrated or defensive. Imagine this: You stay up until midnight working on a deliverable, and first thing in the morning, you get an email from the client saying the direction has changed. Any normal person would be tempted to write a less-than-courteous reply after all that effort. BUT, if the client email comes to the KAM, who’s less personally attached to the work, they can run point on that communication, finding a diplomatic way to express any concerns about timing and budget already spent without saying anything your firm would later regret.
The goal of designating a team of key account managers to own and manage client relationships isn’t to create silos in your organization. The hands-on team of engineers or creatives or whoever else who’s working on client deliverables should still have access to clients, and it’s helpful for KAMs to have some experience in the field of service you provide. Rather than drawing hard lines, you’re setting everyone up for success by letting some people focus on the work, while others focus on the client.
KAM Infrastructure: Process and Technology
Once you have people dedicated to client management, you need to arm them with a clear, consistent internal process. Our KAM Process is a good example; there are many steps within each bucket, but in summary you need to: Know your client, Act on their behalf, and Measure what matters at regular intervals. Rather than trying to explain the entire process here, you can download our Big Book of KAM for an introduction, and of course, schedule a consult with us to learn more.
Process works best when it’s supported by purpose-built technology. Kapta prompts the actions good KAMs need to take: Gathering Voice of Customer insights, maintaining dynamic org charts, keeping lines of communication open, and making sure the whole team understands the big picture. Kapta also provides planning templates that help you translate your customer’s strategic goals into discrete, internal action items. And finally, Kapta helps you track KPIs and performance metrics, so you’re never more than a few clicks away from a detailed report that lets your client know exactly what you’ve done for them lately.
It can seem intimidating to establish KAM in your firm. We’re here to help, with a broad range of assessment, coaching, and implementation services to make the transition a smooth one.
Service firms are in a unique position: They often work in a specialized niche, where the client base is inherently limited. They rely on long-term, strategic partnerships for their own long-term health. And yet, all too often, they don’t create infrastructure for exceptional client management.
Infrastructure for key account management is comprised of 3 main components: People, process, and technology. Kapta has process and technology to support your people, as well as services to provide scaffolding as you roll out your new and improved client management system.
To learn more about how to establish or grow a key account management team at your service firm, get in touch today. And remember, you’re not an ad agency, a marketing agency, an engineering firm, or a contractor—you’re a client service firm first.