Within the last decade, Key Account Management (KAM) has driven crucial change in how businesses interact with strategically important accounts. Far from being a sales technique, KAM represents a cultural shift that opens up a new avenue for interacting and nurturing relationships with key business customers.
Such relationships do not happen by accident, nor is it only between one individual and another. Rather, effective KAM requires building long-term relationships between two companies, and more importantly, it requires a plan. Without active account planning, even the best KAM strategy will fail and even the most competent account manager will be left wondering what happened.
As noted in a recent SalesHQ article, “If a customer is worth being called a key account, then they are worth a plan,” and developing an ongoing, mutually beneficial relationship with key accounts requires an artful balance between short- and long-term planning. Simply put, effective key account management requires deliberate objectives and dynamic strategies, and each are uniquely critical for success. Let’s take a closer look.
Long-Term Planning: Deliberate Objectives
Within each long-term key account strategy, specific objectives must be outlined. After all, without knowing what your customers goals are, you won’t be able to help them succeed. These objectives should encompass both personal and measurable goals, in order to drive optimal success.
- Define the big-picture goals of your key customers. While this may seem like a lofty notion, it is important to work with your key client to articulate their long-term vision for the company and the ways your company can help. This is essential for creating a benchmark against which to measure progress and can help you plot course changes when needed.
- Understand the personal needs of your customer. When putting together an action plan, it is imperative that the personal aspect of a long-term relationship be addressed. While this is a relationship between two businesses, your interactions are, ultimately, personal. Does your key customer need an account manager who will be very hands-on and who will be an active participant in strategy development? Or do they prefer someone a bit more hands-off, who can take their business strategy and run with it? Without understanding what a successful relationship might look like to your customer, you run the risk of missing it entirely and wondering why the relationship isn’t working.
- Define long-term business goals and measurable benchmarks for progress. Define success, concretely, in terms of market share, percent increase in sales, number of products launched within a particular time frame, or specific profit margins. What specific improvements does your key account expect you to help them achieve? While these business goals can be dynamic and revised over time, they also have predictive value as a way for your teams to work together toward a common, specified objective.
Short-Term Planning: Dynamic Strategies
With the long-range road map in place, you’ll then need to determine the necessary steps between here and there. This is an area where some KAM programs fail, since the tendency is to slide back into typical sales habits and focus on short-term, sales-driven results.
Lynette Ryals writing for Harvard Business Review states, “The right metric for a key account manager is the lifetime value of their customer (the customer bottom line), not top-line revenues,” and warns against the danger of using metrics to take the focus away from relationship building. Here is where key account managers can implement dynamic strategies to feed the overall goals.
- Implementation strategies. Fine tune your plan and determine, step by step, how it will be implemented. This is one of the most important steps in a proactive KAM strategy, as it precludes passive reactivity and outlines a path of continuous progress toward outlined goals. Break long-term goals down into more attainable short-term projects, and develop a clear approach to each.
- Communication cadence. In order to ensure the ongoing success of your strategies, you need to define how you will communicate with a key account. Will you have a weekly phone call to discuss progress and reassess goals? Does your key account prefer to communicate by email? Is it possible to meet in-person once a month to talk more in-depth and set new goals? Make regular communication a part of your plan, and follow-through when you say you will.
- Dual focus. Key account planning needs to focus on short-term projects, long-term goals, and all the moving parts in between. This is the key to developing a strong plan for your key accounts. Short-term planning is the proactive how to long-term planning’s
Key Account Management has transformed business-to-business dynamics into a long-term, measurable strategy that redefines success from the customer’s perspective. In order to be effective, KAM’s must incorporate both long-term objectives and short-term strategies that help drive a proactive and mutually beneficial relationship. By using these skills, key account managers can create sustainable success for their own company and for the key business customers they serve.