Differences between Key Account Management and Customer Success

The terms key account management and customer success are often used interchangeably within organizations. However, while the two strategies share a few common goals, they are completely different in their implementation.

Because of that, the pieces of software that enable customer success and key account management teams are inherently different. In this post, we will define key differences between KAM and customer success before getting into some of the differentiators that separate customer success platforms and KAM software.

Key Account Management vs. Customer Success

The goals of both key account management and customer success are to retain and build relationships with customers. But, the way each of these goals is accomplished, the focus of the goals, and how success is measured will vary based on which strategy you implement.

Accordingly, the platform you use to accomplish these goals also matters greatly. For a more detailed look at how the two approaches are different, here are some insights on how key account management and customer success departments approach a few major topics.

1. Client Focus

Key account management is focused on a very small number of the organization’s clientele. The key accounts that get focus from this department are those which are most strategically important to the company. Mostly, they tend to be large and complex organizations with potential for growth and expansion of current accounts with your company. Individual key account managers in the department will be assigned to work with no more than 3-5 key accounts at once.

Customer success is a widespread effort to retain as many potentially successful customers as possible. While this strategy does focus on personalized interactions, customer success managers do not limit their range to only top accounts. In general, customer success segments customers who have the potential to succeed with the services being sold and focuses on them.

One of the biggest overarching differences between a customer success platform and true key account management software comes down to the ability to advocate for your clients. While customer success platforms allow you to organize client information, KAM software takes it a step further by:

  • Providing real-time insight into data and reporting to make informed recommendations for clients
  • Organizing client hierarchy to make communication and client insight more efficient
  • Expanding project management capabilities to make new projects simpler and more successful
  • Offering key account planning capabilities

2. Relevant Industries

Any company in a B2B industry can use a key account management strategy, although it’s most popular with service or SaaS (Software as a Service) companies. The principles can be applied to any company that works with large organizational customers, but cannot be applied in B2C industries.

Customer success is limited strictly to subscription-based service companies but can be applied in B2B or B2C industries. This strategy has a much narrower field of relevancy, and the same principles will not translate well outside of these business models. The strategies of customer success are most frequently seen in SaaS companies, although that is not an exclusive requirement.

3. Revenue Generation Methods

The differences in revenue generation are not as distinct as some other areas. Key account management and customer success both focus on increasing revenues through upselling and cross-selling. The key difference is that customer success is most concerned about the lifetime value of the customer and upselling, while key account management attempts to help the customer grow their revenue streams larger while creating a more complex partnership and indirect selling.

KAM software does this better than a traditional customer success platform or CRM. With detailed account health management capabilities, KAM software makes it easier for account managers to proactively act on a client’s behalf to offer mutually beneficial services that make an impact on revenue generation.

4. Customer Lifecycle

Key account management may or may not be present throughout the entire customer lifecycle, dependent on the account in question. If a customer is being brought in that has the potential to become a key account, the department may give them focus and try to grow a strategic partnership. Existing key accounts have the attention of the key account management department indefinitely until they cease to be a strategic partner or a key account.

Conversely, customer success has no responsibility to bring in new customers or new sales. Instead, their focus is on retaining existing customers with the potential for success. In this case, potential for success means that those customers can use the service successfully to meet their needs. During the customer lifecycle, customer success strategies are mainly present after a sale has been made.

6. Level of Interaction

By its very nature, key account management is a high-touch strategy with frequent communication and interaction required with every customer. Some key account managers may spend a larger portion of their time in customers’ organizations than in their own. Partnerships like the ones a key account manager creates need a very high level of interaction to be successful in the long run.

Because of that, they need more than a traditional customer success platform. They need software that allows them to provide white-glove service to their key accounts and essentially act as a member of their team.

Customer success does require some dedicated interaction with customers, but it’s often not as rigorous or demanding. Most customer interaction is done to answer the questions “how could our service better fit your needs?” or “what is the most useful part of our service?” It’s not common for customer success staff to interact on a consistently high level with one individual customer.

7. Timeline of Results

While both of these strategies are geared more towards long-term results, customer success generally shows some results more quickly than key account management. That’s because it can take upwards of a year to form a solid strategic partnership with a key account customer. Before the partnership is well established, it’s not likely the accounts will grow and expand.

The time frame for customer success is usually a bit shorter. Long-term results are the focus, but the results will most likely begin to show up marginally within a few months of implementing a true customer success strategy.

8. Measuring Success

Being a highly personalized process, key account management should ideally measure results based on each individual key account instead of the group of key accounts. You can gauge success from revenue growth, relationship growth, and customer retention

These three metrics are the most important to show true progress. Other measures like customer satisfaction or advocacy do not give an accurate enough picture about whether the relationship is successful or not.

Progress with customer success is measured by how well your customers can use your services to accomplish their goals. This can be seen through lower churn rates and higher recommendation rates, although these metrics do not completely define success. Most customer success strategies tend to focus on the churn rate as an indication of how they’re doing. Measurements are made from a large pool of customers instead of individual customers.

Upgrade Your Customer Success Platform

Despite having some similarities, customer success and key account management are not the same strategies, nor are they conflicting strategies. In fact, you can implement both strategies in the same organization without hurting one or the other. Both strategies focus on retaining good customers and improving their loyalty and usage, but they go about it with different approaches.

Curious to see how you can take your key account management department to the next level? Request a demo for our platform, or download this helpful ebook on how to create powerful engagement plans for your key accounts.

Accelerate growth transform client relationships CTA banner with request a demo button

Christine is a content specialist for Kapta. She graduated from Radford University with a BBA in Management, concentrating in Entrepreneurship.