Many businesses today operate with some sort of advanced customer retention strategies such as customer success, account management, customer relationship management (CRM), or Key Account Management. All these are commonly found in today’s businesses, but none of them are interchangeable. Each strategy requires specific resources, activities, and strategies to be carried out successfully. Despite this, it’s common for businesses to use the wrong tools for their strategy.
Tools are specifically created for one type of customer retention strategy and they generally do not work for the others, even if they share some specific features. The differences are especially important when you’re looking at Key Account Management versus CRM.
Customer relationship management describes actions, strategies, and systems developed to help companies manage customer information and data. The software systems for CRM are usually made to track and analyze specific information about customers in order to help improve their experience. Data is given to relevant customer-facing employees in order to help each customer have quicker, more personalized customer service experiences.
If you’re at all familiar with Key Account Management, the definition of CRM may sound very similar. The problem is that CRM does not have the same depth and personalization that Key Account Management needs for success. While CRM collects data on every customer possible, Key Account Management focuses only on a very exclusive group of segmented customers.
The other major difference that’s worth noting is that CRM’s goal revolves almost entirely around optimizing the sales process. This strategy seeks to eliminate snags in the sales funnel and improve sales to existing customers as well as outreach efforts for new customers. With the information given by a CRM system, employees can more easily convert leads into new customers.
Key Account Management is not a sales strategy. It has no direct connection to creating new customers and sales. Instead, Key Account Management focuses on more important existing clients. The goal is to grow and expand those accounts by giving personalized, holistic service to those key account customers. The goal is to build strong relationships with each key client.
Because of the fundamental differences between CRM and Key Account Management, there is no single software solution for both strategies. If you want to succeed in Key Account Management, you cannot rely on a CRM system to collect, analyze, and spread the information about your key account clients.
CRM software systems are fantastic solutions for the sales department to help compile all relevant customer data in one centralized place that’s easy for employees to access. For a sales department that practices CRM, this software is designed with their exact needs in mind.
Organizations practicing Key Account Management need more. Because CRM software is designed specifically for the sales department, it’s not a good fit for an organization-wide effort to grow key account clients. The sales department is only a small part of the entire Key Account Management process, which is why a specific software solution is necessary if you want to be effective.
Key Account Management software is designed to collect, save, and analyze very detailed and precise information about your key account clients. To build a stronger relationship with these customer accounts, you have to stay up-to-date on a large amount of information associated with each separate key account. You’ll need a large collection of specific data to help you create forecasts, track milestones towards goals, and monitor threats or opportunities related to the account.
Surprises are completely unwelcome in Key Account Management, so the purpose of using the right kind of software is to eliminate the chance of unwelcome surprises. This can only be done if you’re getting the right information, so you can view everything relevant to each account in one place. If you’re not looking at the right information, it doesn’t matter how easy it is to access. The precision of data matters more in Key Account Management than in most other strategies, including CRM.
Retaining and growing key accounts means you need to be consistently aware of client risks associated with all key accounts. No matter how well you think things are going, it’s always a possibility that your key accounts will jump ship in favor of your competitors. Proper data management helps you avoid this issue by proactively tackling problems before they lead customers to look at other options.
All data managed by a Key Account Management software has to be dispersed in an easy-to-digest format to relevant departments and staff around the organization. Each department should be aware of who the company’s key account clients are so that the entire organization can give the right level of service that was promised to each key account. In this case, inaccurate or incomplete data can be a disaster.
No amount of software could replace the people working as key account managers in an organization. They are the true backbone of the Key Account Management process and will drive success for both your company and your strategic partners. But, the right tools make a huge difference in how easily and effectively they can do their job.
Software designed for key account managers is uniquely designed for use in a company-wide Key Account management strategy. By investing in the right software for key account managers to use offers them these benefits over other, less targeted software:
Using the right tools won’t make you successful automatically, but it does give you a better chance of operating your chosen strategy effectively. However, the wrong tools can reduce even your best efforts to nothing, as you won’t be well equipped to recognize and solve problems before they come. If you’re currently using CRM systems for your Key Account Management, it’s time to think about investing in the right tools for the job.