According to the Pareto Principle, or 80/20 rule, 80% of your sales come from 20% of your existing customers. CSO Insights found that 70% of revenue comes from existing accounts. Plus, a classic study found acquiring a new customer is more expensive than retaining an existing one, and increasing customer retention by 5% increases profits by 25% or more. The same study revealed that existing customers buy more often and spend more than newer customers.
So, it makes sense to focus on retaining top customers while chasing new business to maximize revenue returns. That’s why it’s essential to implement an effective key account management program that builds deep relationships with the top 20% of your customers to deliver the value they expect, retain their business, and continue growing.
Chief Revenue Officers (CROs) are responsible for all company-generated revenue. That means focusing on the entire customer journey from lead to customer and beyond. That includes finding ways to improve customer experience for existing customers in the long-term.
Minimize churn to accelerate revenue growth
Churn kills companies by decreasing the number of existing long-term customers and increasing the need to acquire more new customers just to maintain revenue. Since it costs more to win new customers than it does to retain existing customers, churn makes revenue growth an uphill battle. Conversely, increased customer retention provides a stable base to build on. This enables you to leverage the positive revenue impact of increased account retention making it easier to attain greater growth targets.
Invest in key account management (KAM)
An effective key account management (KAM) program is essential to minimizing churn. Focused on developing relationships with the top 20 percent of existing accounts, these account managers work with these key customers to help them achieve their goals, providing them with the value they seek. The result is a better customer experience and retention. So, to minimize churn it’s necessary to invest in your key account management (KAM) organization and process.
KAMs need tools too
Investing in your KAM organization and process needs to go beyond training. Just like other business units such as marketing, sales, and finance, KAMs need a purpose-built set of tools too. They need software designed specifically to guide them and simplify processes so they’re operating at peak efficiency and effectiveness.
If you’re thinking that your CRM is a KAM tool, think again. Your CRM is not suitable for KAM and customer engagement tasks. You need to move beyond Excel spreadsheets and PowerPoint decks by giving account managers access to specialized software that integrates completed account plans into their daily workflows, so all key elements of the plan are implemented.
The KAM process involves many complex elements and CRM alone cannot support the development and implementation of plans. Although useful for tracking contacts and past account history, CRMs aren’t effective for tracking all the long-term strategic elements of key account plans.
KAM software is a template-driven guide & roadmap for KAM success
Software designed to properly support successful KAMs incorporates templates and a roadmap to facilitate the account management process. This means your team isn’t reinventing the wheel or starting from scratch every time they prepare for an account review, create an account plan, or track progress toward account goals. It includes templates and automation such as:
- Org Charts and Client Profiles to visualize the overall structure and relationships within each account.
- Voice of Customer (VOC) and SWOT Tools, making it easier to more deeply understand customer goals and related roadblocks to achieving them.
- Account plan templates to simplify translating big business goals and breaking them down into actionable tasks toward attaining them.
- A collaboration hub to increase communication and ensure the entire team stays focused on track to hit targets. And to make it easier to course-correct as needed.
- A customer metrics dashboard to track progress at a glance
- An algorithm to generate an account health score to easily manage risk, gauge satisfaction, and quickly identify at-risk accounts.
Plus, KAM software helps account managers always know what to do next, thanks to the platform’s built-in guidance.
Don’t leave your KAM team stranded
Smart CROs are investing in dedicated tools like Kapta to optimize KAM effectiveness and efficiency. They are leveraging KAM technology solutions to streamline tasks like:
- consolidating all important key account information
- creating insight-driven forecasts with relevant data analysis
- measuring plan implementation success in real-time
- supporting collaboration of all relevant internal and customer stakeholders
- alerting sales management when plans are going off track or progress is slowing down
This frees up your account management team to do more thought-provoking tasks and spend more time with their customers.
Ready to increase the productivity of your KAM team by providing them with the tools they need to succeed? Schedule a demo today.