Why Ad Agencies are Investing in Key Account Management

Key Account Management is the art of engaging with high-value customers to promote a long-term, strategic partnership that results in organic growth. Because high-value customers appear across multiple industries, KAM is be useful for many different types of organizations.

For some of our customers, high-value customers are a segment within a broader customer base. However, for some companies using Kapta, every account is high value. And we don’t mean that as a platitude—we mean these companies have a small roster of clients, all of whom are worth half a million dollars in revenue or more, annually.

For these organizations, all Account Management is Key Account Management, and KAM is not an afterthought or an offshoot of sales. Rather, it’s an operational pillar of the organization.

We recently posted a use-case analysis of KAM at marketing agencies, examining how and why they use Kapta to support them in their unique KAM environment. To review, marketing agencies need Kapta because they are:

• Service firms, actively working on client deliverables at all times
• Cross-functional teams, coordinating large efforts across lots of people and skill sets
• Desk-based vs field-based, which demands a proactive approach to client contact
• Highly scrutinized, and constantly under pressure to demonstrate value

There is quite a bit of overlap between marketing and advertising agencies, and both kinds of agencies strive to be strategic partners to their clients. Ad agencies perhaps place more emphasis on the creative product itself, but the best agencies know, at the end of the day, they’re not creative agencies—they’re client service agencies.

In order to serve clients effectively, ad agencies need a high-functioning client services team, whose focus is the client relationship. And that team needs purpose-built tools built around some version of Our KAM Process:

• Know the client’s big picture goals
• Act strategically and effectively to help them meet those goals
• Measure impact periodically to demonstrate value and fine-tune the approach

Let’s look at a couple of nuances that shape the KAM environment at full-service ad agencies, and how Kapta can help support those agencies in their account management efforts.

Agency of Record

Many RFPs sent out to full-service ad agencies are for an Agency of Record (AoR), meaning the agency will handle all promotional business for the product. For example, if a pharmaceutical company is launching a new drug, they will seek pitches from pharma ad agencies to be AoR for that drug. Once selected, the AoR will handle every single physician-facing communication related to the launch of that drug, whether it’s KOL communication, conventions, branding, launch creative concept, website, emails, and more. The pharma company won’t divide that work among different specialist vendors; ie, they won’t hire a separate, smaller agency who specialize in web content to design the website. They’ll funnel all promotional work through their AoR. Often, this means the AoR will manage subcontractors in addition to taking on a great deal of work in-house.

To be an AoR requires a depth of relationship well beyond that of a typical vendor. Account managers at ad agencies need to know their clients better than they know themselves. Often, an account manager will have a desk at the client’s office and an email address at the client’s domain. They’ll have password access and eat in the client’s cafeteria. Despite what their paycheck says, they are so embedded in their client’s day-to-day that they could easily pass for an employee of their client.

And that speaks to an important aspect of key account management at an ad agency: You are so focused on client service that a casual observer might think you worked for them, and not for your agency.

Of course, account managers do work for their agency, and are accountable to their agency, and we’ll get into that more later. But it’s food for thought for organizations that don’t have as strong a customer-first culture, or as developed a KAM function. Imagine what it would be like to be so immersed in your client’s business that a casual observer might think you worked for them.

Getting and staying so immersed requires dedicated teams and tools. Many account managers at ad agencies handle only one account, and they may even be part of a team of account managers who work on one piece of business. That team needs purpose-built tools to help unearth and manage everything their client needs/wants/is trying to accomplish.

Again, take the example of a pharmaceutical launch: The pharma company is about to spend millions of dollars with their ad agency building a cohesive, compelling brand; communicating to decision-makers and influencers all over the country or world; complying with the many regulations surrounding pharma advertising; and driving adoption and success for their drug. That’s a tall order, and agencies need a systematic way to keep track of all those goals, as well as a clear way to keep multiple teams on strategy as they tackle multiple deliverables across multiple audiences. Rather than storing key information as a series of Powerpoint decks and Excel spreadsheets on the server, plus a chain of emails on Outlook, plus whatever’s happening on Slack and Assembla, Kapta keeps the big picture context front and center, supporting account managers as they ensure the strategic quality of work going out the door while also keeping new work coming in the door.

Sales Follows KAM (not the other way around)

In an organization where Sales is King, key account management tends to follow sales. In other words, the sales team will use their CRM to generate new leads, and as some of those leads start to float to the top as priorities, the KAM team takes over.

Now, consider an ad agency. First of all, there’s no CRM. And there’s no “sales” team, even if there is a group dedicated to new business. Because in fact, every single “sale” at an ad agency is a function of key account management. New RFPs often come in either because (a) a leader on the client services team once worked with someone who is now leader at their company, and the RFP is really just a long extension of previous account management; or (b) the agency is performing so well for their other clients that they earn a reputation for creativity and effectiveness. In either case, even being invited to pitch for new business is because of a personal relationship or demonstrated success; CRM never enters into it.

Account managers also drive organic growth by renewing and upselling existing clients. As the agency partnership grows, the client sends more and more business their way—maybe they get an opportunity to work on global launches as well as US business. Or in the pharma example, they get a chance to work on consumer-facing promotional materials in addition to physician-facing. As the team succeeds in their efforts on a client’s behalf, they open the door for more and more work—and they keep the account profitable along the way.

Account Management is a Line Item

In an ad agency model, account management isn’t overhead. It’s a line item in its own right. Clients are so convinced of the value of the account management team that they pay for them separately, and not just as a set of billable hours under a specific deliverable.

In order to essentially convince a client to pay your salary, you have to work even harder to demonstrate value—and that’s where a purpose-built tool that includes key metrics is critical. Account managers should be able to show real data that proves they’ve been effective; they also need clients who are deeply satisfied with the level of service and work they get from their agency. Kapta helps account managers track both specific KPIs and overall account health, including both leading and lagging indicators of success.

Account-Ability

At the end of the day, account managers at an ad agency are in a tough spot: They are deeply accountable to their clients, and their success in building client relationships will shape their career for years to come. They are also accountable to their agencies, ensuring work comes in the door—and deliverables go out the door with profit margins in tact. And they are accountable to the entire cross-functional team that helps deliver that work. Account managers can be successful even if creative directors don’t like them, but creative directors can certainly make their lives miserable if they want to.

With so many people to answer to, it’s critical that account managers have a tool designed to support them, specifically, in their unique role. A tool that helps them keep up with their client communications, their internal team’s progress, and the results they’ve driven as an agency.

Conclusion

Because high-value clients exist in every industry, we at Kapa work with customers from many different industries. Sometimes, we offer support and training to companies who are just learning about key account management—we can help those organizations segment their customer base, establish a KAM process, and set themselves up for growth.

However, with ad agencies, our role is different. Ad agencies know full well the value of key account management, and it shows: Their KAM function is incredibly well-developed and well-respected within agency culture. For ad agencies and other service-based firms, we spend less time educating around KAM and more time supporting established teams in their ongoing efforts to engage clients more fully, deepen and strengthen the relationships, and develop a reputation for stellar client service.

To see how Kapta supports client service leads at marketing agencies and other service-based firms, schedule a personal demo today.