Slow Growth? Try Key Account Management.in Key Account Management /
If you’re banging your head against the wall trying to figure out how to win new customers, we have a thought for you: What if you’re standing at the wrong wall?
Turn your attention instead to your company’s most valuable asset: Your existing customers. Make it your goal to truly engage with those customers, not only protecting the revenue you have, but also opening the door to long-term organic growth.
Here’s why investing in existing customers makes financial sense:
- You’ll spend less. New business is expensive—not only to win, but also to get up and running.
- They’ll spend more. Existing customers are more likely to invest in premium services due to past positive experiences. In fact, renewals and upsells can generate 70-90% of a company’s revenue.
- You’ll avoid churn. Customer churn is the worst of both worlds—you’re losing revenue from the customer and spending money to replace them.
Let’s take a closer look at each of these, then talk about how investing in Key Account Management can strengthen existing customer relationships, prime the pump for organic growth, and generate long-term profitability for your company.
It costs a lot of money to win new business. There’s advertising and marketing, pitching, travel, and time spent on sales calls and follow-ups. And that’s all before the client signs on.
Once they do, onboarding takes time and burns resources, as does working out the glitches in the new relationship. Depending on the products or services you offer, there’s a learning curve for both your internal team and for the customer.
In contrast, your existing clients are already up and running. You know how to work with them, and they know how to work with you. If you sell a product, they understand how it works. Rather than starting from scratch, you can introduce new features or services quickly and seamlessly. This takes minimal time and yields high return. Which brings us to our next point:
Existing customers are far easier to cross-sell and upsell than new customers. That’s because you’ve already demonstrated your value, and they’re already relying on your services.
Cross-sells and upsells from existing customers can yield 70-90% of a company’s revenue. Existing customers are generally much more likely to invest in your premium products and services, due to past positive experiences. Of course, that’s only true if they’ve had positive experiences—which is where KAM comes in.
Churn is the worst of both worlds. Not only do you lose existing and potential revenue from a key customer, but you also force yourself to invest in finding new customers to replace that revenue. Churn is a fast way to make yourself less profitable, even if you’re still winning new customers on the front end.
The good news is, existing customers are much more likely to stick with you, even when things go wrong. The stronger the relationship, the more you protect the revenue associated with it—and the more you set the stage for ongoing growth.
How Key Account Management Can Help
Hopefully we’ve established why it makes financial sense to invest in existing customers. So how do you do that? By investing in the relationship itself. You need to make sure customers are fully engaged, fully satisfied, and fully committed to growing their business with you.
Key account management is the way to invest in customer engagement. It starts by identifying key customers, and using a comprehensive, dedicated approach to managing that book of business. This approach is comprised of 3 pillars: People, process, and technology.
People means designating a team of Key Account Managers whose primary role is client relationship management. Functionally, this gives them time every day to reach out to, engage with, and listen to clients. If you’re trying to squeeze this role into another one, your people will only have time to keep up with clients—and keeping up is not enough. Dedicated KAMs stay ahead of client needs, unearthing their current satisfaction, opportunities for improvement, big picture goals, and long-term strategy. This knowledge is indispensable to organic growth, because it gives your organization a chance to proactively develop solutions that keep your customers impressed and engaged every step of the way.
Process means you don’t just hire key account managers and call it a day. You need to establish clear, internal expectations for client management within your organization. Our KAM Process is an example: Know your client. Act on their behalf. Measure your results. Repeat. Of course, that’s just the high-level summary—there are specific tasks and behaviors within each of those pillars, too. For a more in-depth look at a high-functioning KAM process, download our Big Book of KAM.
Whatever process you follow, keep it clear and consistent throughout your organization. Not only will you improve client engagement, but you’ll also make things easier for yourself. You’ll make training and onboarding more efficient, for new employees and new clients alike. Managers will have leading indicators for measuring KAM performance, rather than waiting for lagging indicators (when it may be too late). Most importantly, you’ll create continuity for your clients.
Technology is the final, critical component of a high-functioning key account management system. The right technology prompts the actions and behaviors that make KAMs successful, while creating a single source of truth for teams. But good tech is not enough: It only works when it supports a strong process executed by a strong team.
When you have people, process, and technology working together to anticipate customer needs, exceed customer expectations, and demonstrate value, you’ll create relationships with incredible growth potential. As customers see everything you can do for them, they’ll not only renew their contracts, but also invite you to work on more business. They’ll spread the word internally at their organization and beyond. They’ll stick with you through mistakes—and even recessions.
So if you’re still banging your head against a wall in an effort to win new business, step back and reevaluate your approach. It may be everything you need for growth is already under your nose.
Key Account Management is an indispensable tool for reducing overhead, preventing churn, and driving organic growth. KAM helps you realize the full potential of your existing customers, which is the most sustainable, and ultimately most profitable, form of growth.
So if you’re struggling with your growth goals and find that they’re rooted almost entirely in new business, try changing courses. Invest instead in the customers you already have, using people, process, and technology to engage them in new ways, and keep them for years to come.
To see how Kapta helps you grow by investing in existing customers. Schedule your personal demo today.
Alex Raymond is the CEO of Kapta.