Key Account Management for Software Companies: How KAM Can Help you “Land & Expand”in Key Account Management /
B2B software companies often use a “Land and Expand” model, meaning: You land a customer with a small deal (such as a single department or team), and grow by expanding your footprint within the organization. Over time you add more users, more teams, more business units; you may also increase utilization of premium products and features within your platform.
The model is sound in theory, but it only works in practice if you’re able to drive real customer engagement and satisfaction from the outset. Because contrary to what some people believe, software does not sell itself. There are plenty of barriers to adoption and full utilization, even within an existing account: cost, effort, general resistance to change, to name a few.
And it’s not enough to look at subscription renewals alone. They’re a good short-term indicator of success, but they don’t tell you much about real engagement.
Here’s an analogy: You buy a monthly gym membership. You go twice a week for the first month, but by month 3, you’ve tapered off. For a while, you keep paying for the membership, because you’d like to use it more, and you know in theory the gym is a good thing. But eventually, you’re going to take a hard look at numbers and realize: You’re not getting a hundred dollars a month of value from this subscription. (In fact, you basically went on a $300 treadmill run back in April.) Once this knowledge hits, you’ll cancel your membership.
As a software company whose model is rooted in subscriptions, you have to look beyond the monthly or even yearly renewals, to the strength of the relationship: Between you and your customer. Between your customer and your product. Between your company and your customer’s company.
Making “land and expand” work for you takes more than salesmanship and subscriptions. It takes Key Account Management. It takes making the shift from a product vendor, desperately trying to renew subscriptions while also chasing new accounts, to a strategic account manager, engaging deeply with existing, key customers to cement the relationship and drive steady, organic, profitable growth.
Here’s an overview of Our KAM Process. In the post below, we’ll look at how this process can apply to software companies in particular:
- Know your customer: Spend time with them—preferably onsite—to understand their process, their goals, their existing tech stack, their interactions with the organization as a whole, and more. Build a complete picture, working your way out from the initial team to the organization as a whole.
- Act on their behalf: What can you offer beyond the product itself? How can you make sure they’re making the most of your functionality to make their work more efficient and more effective? How can you make each team you touch work better?
- Measure what matters: There’s no better way to demonstrate your value than cold, hard numbers. Set success metrics at the beginning, and track them carefully to show your client how your product pays off.
Know Your Customer’s Goals
It’s not enough to make the initial sale and walk away, hoping the software will expand its own footprint within one customer’s organization while you go off and make new sales. You have to stop and truly engage with your customer, working to reveal concentric circles of knowledge, from the current users to the organization as a whole. Here are just some examples of questions you could ask:
- What is the initial team hoping to achieve with your product?
- What are they hoping to achieve more broadly? (What makes them look good? What earns them more recognition, influence, or compensation within their company?)
- How does your product fit into their overall workflow or tech stack?
- How does the business unit as a whole engage with other functions in the organization? How seamlessly can they share information with other teams/units?
- What is the organization trying to achieve?
The list goes on. Our goal here isn’t to list every question you should be asking, but to give you a sense of the types of questions you should be asking, namely: questions whose answers reveal opportunities to add value. The more you know, the more you can introduce proactive solutions that advance your customer’s interests beyond the basics of what your product can do. And that’s the first step to real engagement.
Here’s a great example. Let’s say your product helps finance and accounting teams. Table stakes for success is that you actually help them perform their finance and accounting functions more smoothly/accurately/efficiently. But let’s say you probe deeper, and learn that the finance team wants to play a more active role in strategic planning for the company as a whole. This is a key customer insight—and it should inform the way you act on your customer’s behalf. Let’s see how this plays out in the “act” phase below.
Act on Your Customer’s Behalf
Once you understand your customer’s goals, processes, and organizational dynamic, you can start to propose action plans to help them work even more efficiently and effectively. You can make sure they’re getting everything they can from your product—using the right features in the right way, integrating with compatible products, and creating good workflows.
After spending some time with them, you might notice redundancies or manual errors in their current workflow, which you know your product could fix. Be proactive in suggesting and training around workflow adaptations that will save them time and effort, while helping them make the most of their investment in your product. Now you’ve really got their attention, and shown value beyond the product itself.
Based on this success, their leadership expresses interest in your product. Now you go back to your insight from above: You know the finance team wants a bigger seat at the table. So you offer to put together a case study that not only makes your product look great, but also makes the finance team look great. You highlight their visionary leadership and change management. You show the efficiencies they’ve created and the insights they’ve generated for the business as a whole. You show how you’ve freed up some of their time for more value-added tasks, such as contributing to strategic plans.
Through your actions, you’ve done more than sell your product into another business unit; you’ve made your clients look smart and successful, while helping them achieve an even bigger scale goal. Now you’re more than a vendor. You’re on your way to becoming a strategic partner.
Measure What Matters
In addition to intangible (but powerful) value adds like the example above, it’s important to show your customers real numbers. Because just like you with your gym membership, someone is going to look at the books every year and consider the line-item cost of your product subscription. How do you make sure they keep that line item in their budget—and better yet, increase it?
The answer is, you have to show them numbers. And these numbers have to be tied to their goals, not yours. This takes us all the way back to the “Know” part of the process, when you identified concentric goals, starting with your “landing” team and expanding out to the organization as a whole. The better you were at clarifying and quantifying those goals, the more you can build in relevant success metrics along the way. And the more you do that, the more quickly and clearly you can demonstrate how your product is making a positive impact on their organization.
The real key here is to push yourself into the customer’s perspective. It’s easy to measure things that matter to you: New users, product utilization, subscription renewals. (And yes, of course, you should measure those things.) But it takes more effort to track the numbers that matter to your customers: Time spent on manual tasks. Time to revenue. Revenue growth. Reduction in overhead. Ease of security and compliance. Risk management. And more.
Make sure what you measure matters to your customer, and make sure you can present data in a way that makes it clear your product is worth the investment they’ve made in it. The encouraging irony is that by keeping your goals secondary to theirs, you’ll actually improve your chances at hitting your own numbers in the end.
How Tech Can Help
Key Account Management is the key to unlocking the full potential of any customer relationship—especially in a land and expand model. Software companies should not take for granted that software will sell itself; nor should they be so laser focused on periodic renewals that they forget to examine the relationships behind them.
And if anyone can appreciate the value of purpose-built technology in supporting successful behaviors, it’s a software company. The right KAM software can help prompt and measure customer engagement, while giving you the tools to build meaningful action plans from your customer’s goals. KAM software can collate data from several sources, giving you real-time insights into how you’re tracking against your customer’s success metrics. And KAM software can turn that tracking into relevant, specific, meaningful data visualizations for your client and your C-suite.
Key Account Management is an indispensable tool for B2B software companies working with a “land and expand” model. KAM helps you reveal your customer’s big picture goals, and make your product—and partnership—an indispensable part of their process.
To see how Kapta is the KAM software for B2B software companies, schedule your personal demo today.
Alex Raymond is the CEO of Kapta.