Key account managers work with those accounts that represent 30-50% of total revenue for their companies. What this means for this strategic position is that it is important to understand the full customer experience. This begins with the sales process and extends to service and support after the sale. Here are some of the best practices of companies that understand the importance of key account management and are going beyond sales to create more loyal customers.
- Quantified Value Proposition: Service and support have proven to be twice as important as product features and benefits, so determining a value proposition that can be quantified is a key to success for the best key account managers. Find out what makes you stand out from your competition in terms of service. Knowing these things and having confidence in these areas can help move the conversation from price to the value you provide to the customer.
- Value-based Selling: Companies are 25% more likely to be the primary supplier of key accounts if they understand how to sell on value. Once the quantified value proposition is clearly defined, the next step is to provide key account managers with everything they need to present this to the key players in these strategic accounts.
- Keep the Process Simple, Easy, and Organized: Organization and follow-up are the keys to success with your key accounts. Key account managers should be prepared to effectively lead a cross-functional team.
- Be Prepared: While value and service are crucial to successful key account managers, don’t disregard planning and research regarding price. While price is not the leading factor in purchasing decisions today, it is still important. Remember the adage, “Failing to plan is planning to fail.” Never take for granted your largest accounts and think you don’t have to plan for the next pitch. Just because you have the account now does not guarantee you will keep it. Plan as if you are trying to win this account for the first time. Being prepared means understanding all costs, including supplier costs, and having the skill to negotiate with key suppliers.
Key account management is a completely different approach than traditional selling. It requires both a cultural change and a change in the sales process, but not all top-performing salespeople are good key account managers. Key account managers must have a broader range of skills than just sales.
The concept of key account management actually gave birth in the 1970’s. Xerox and IBM were the earliest adopters of this strategy. They began by identifying their most important customers as “key accounts.” They understood the following about key account management:
- Building strategic relationships with the most important customers provides value to the customer and your business.
- KAM encourages alignment throughout organizations.
- Ultimately, key account management delivers the value that customers are looking for today.
Key account management is what provides a competitive edge. It is a form of consultative selling that has the customer’s best interests in mind and understands the lifetime value of a customer. Rather than solely focusing on the sale at hand, the best key account managers have a long-term relationship in mind. While tactics vary greatly from organization to organization, the following elements remain consistent among the most successful key account managers:
- Strategy: This involves formulating a long-term growth strategy that identifies the potential sources of that growth and the specific added value.
- Organization: Key account managers are organized. They develop cross-functional teams that will work together towards a common goal. Senior management recognizes the importance and value of key account management and is deeply involved.
- Measurement: A good KAM relationship involves ongoing analysis of success within the account.
- Process: Have a specific process in place that guides the key account management relationship and focuses on building and growing those relationships.
As more and more services are centralized and automated, the competition to win big clients continues to grow. Establishing strong relationships with your key customers and maintaining a well-run key account management program is paramount to your business’s future success. Providing this kind of service and attention to your customers is what will help differentiate you from your competitors and allow you to continue to grow your business with your most important customers that contribute the most to your overall profit.
Curious to see how you can take your Key Account Management skills to the next level? Download this helpful ebook on how to create powerful account plans for your key customers or sign up for a demo of Kapta.