In today’s marketplace, customer retention is dependent on customer outcomes. In fact, the best predictor of customer retention is measurable customer results. Forrester also found that B2B organizations that consistently prioritize customer outcomes are three times more likely to experience at least 10% growth in revenue, profits, and customer retention.
Businesses that are successfully achieving this shift have become customer-centric, enabling them to drive the customer’s desired outcomes. These outcomes are post-sales achievements. That’s why key account management (KAM) has continued to rise in popularity.
KAM programs focus on the top 20% of a company’s customers, representing up to 80% of its revenue and growth potential. A successful program ensures retention and growth through upsells, cross-sells, and advocacy opportunities. This is especially critical during uncertain economic times.
However, not all KAM programs are created equal. We’ve found that some businesses are still stuck in the old way of thinking and are putting their business at risk if they don’t find a way to shift their focus to the customer. And there are many errors that businesses make as they establish their account management programs. We refer to these as the seven sins of key account management.
In this post we review these seven sins plus one bonus sin and how you can avoid them so your KAM program can effectively drive customer outcomes, boost retention, and grow your business.
Let’s get started.
Seven Sins of Account Management
The following issues are what most commonly prevent businesses from achieving KAM success.
1. Being tactical instead of strategic
We all know we’re supposed to be a strategic partner or trusted advisor as an account manager. You want to orient yourself like that but end up being tactical.
Instead of talking about the big picture to our customers or talking about transformation, we find ourselves in the weeds, stuck in the minutia of working with a client. This could translate to focusing on the small stuff like chasing payments, concerning yourself with where the button is on the page, or the color of the banner.
When KAMs get stuck in the weeds, we are no longer viewed as a strategic peer of the customer. Instead, we are viewed as a glorified help desk or support.
2. Being reactive instead of proactive
When you spend your days playing catch up and putting out fires in response to everything that’s happening in places like email, phone calls, and Slack, you’re being reactive. This takes up your time instead of proactively developing plans and implementing best practices. This can zap your energy and hold you back from delivering customer outcomes.
3. Being self-centered instead of customer-centric
It’s essential that you put the customer first in everything you do instead of putting yourself first. For example, if you are self-centered, an internal meeting revolves entirely around you. You discuss the pipeline, open opportunities, the status of contracts and statements of work, and how to sell more.
When you are customer-centric, you routinely conduct internal account reviews where you discuss the customer, what’s going on in their world, their challenges, changes to their organization, and a competitive matrix. Then you review the state of the account plan, and how to help achieve customer goals and desired outcomes.
4. Not building account plans
Account plans are a critical part of the customer lifecycle. They are a valuable tool for managing your accounts. These plans help you be proactive and strategic.
Not building account plans is a choice you are making. You don’t need fancy software or your boss’s approval to create them. These plans are an effective way to consolidate all your thoughts about the account in one place, so you can be a more effective account manager.
5. Using the wrong systems
Every team within an organization such as Finance, Marketing, Sales, Product, and HR all have their own specialized software. Yet somehow account management teams are expected to get by with a tech stack that consists of a hodgepodge of ad hoc tools like CRM, Outlook, Google Sheets, and Excel.
We know that CRM does work for account management because the teams we talk to have told us as much and they’re stuck making do. Account management teams need to have specialized tools, workflows, and infrastructure if they’re going to function efficiently.
6. Not reporting value back
Account managers understand the value their customers are receiving by using their products or services. However, they have a bad habit of internalizing all that data and the things that they are doing for their customer, then forgetting to tell them in terms that are meaningful to the client.
Our customers are busy and distracted, so it’s our job as account managers to show customers the benefits, the impact, and how we are helping them meet their goals. So, don’t wait to share this information on slide 16 of a 50-slide presentation during a QBR. They might miss it.
7. Assuming everyone in the company understands the client
We, as account managers, know our customers very well. We spend all our time with them, thinking about them, and learning about them and what’s going on in their business. Assuming that everyone inside your company understands the customer as well as you do is a big mistake.
It’s your job as an account manager to evangelize and advocate on behalf of the customer inside your company. You need to communicate what the customer wants, what they need, where they are going, what their challenges are, what’s working, and what’s not working. Make sure that you’re orienting your role toward helping the rest of your company understand the customer so they can help the customer achieve their goals.
Bonus: 8. Wanting better results without changing the way you do business
We often see companies that want better customer engagement and key account management, plus all the benefits, but absolutely refuse to make any changes to the way they operate.
This is the definition of insanity where you do the same thing over and over but expect different results.
If you want all these great results, you need to implement change management, how you are thinking, and how you are acting.
How to Avoid the Seven Sins
Don’t let the seven sins stop you from achieving KAM success. Leverage these tips to overcome them.
Remember your Why: Keeping your goal in front of you as you make changes to your account management program is essential. It will keep you moving forward.
Make a commitment to change: As you commit to change, determine what you will do differently in terms of mindsets and behaviors to drive better results and be more effective.
Embrace a roadmap: Use a guide like our KAM Process™ to facilitate progress and ensure no essential steps are missed.
KAM is a team sport: Effective key account management requires teamwork across your organization so this needs to be a company-wide initiative.
Implement good change management practices: Create a plan and how to measure the progress of your new initiative. It will help you overcome bumps and friction along the way.
Progress over perfection: Change management means communicating effectively and remaining committed to the end goal. Buying a piece of software or providing a training course is not the whole solution, so you need to celebrate progress along the way and not expect perfection overnight. Then remain engaged throughout the process.
Keep the customer top-of-mind: Become increasingly customer-centric and consider what the benefit is to the customer and how to change the way you work to deliver customer value faster.
Focus on outcomes: Make customer value delivery and driving customer goals your primary focus and you’ll elevate your KAM program to new heights.
Meet your Customer Retention Goals
Regardless of how mature your key account management program is, there’s always room for improvement. Use the seven sins of key account management to help you identify areas requiring improvement and consider our tips when seeking to improve.
Looking for the right tools to streamline and automate KAM processes? Schedule a chat with a team member to see how Kapta can help you meet your account management goals faster. Or register for KAMGenius to help your team learn the essentials of key account management.