Key accounts represent up to 70% of your company’s revenue. So, losing just one of these top-tier accounts can have a huge impact on your business and its ability to grow.
You lose the revenue stability and growth potential of the key account, as well as a valued advocate, referral source, and market intelligence.
Key account managers (KAMs) are your lifeline for securing these foundational partnerships. KAMs are responsible for developing a deep understanding of these customers to help them achieve their goals and see the value of doing business with your organization.
This level of engagement puts KAMs in a position to spot risks early, while they are manageable. This prevents you from being blindsided by unexpected key account cancellations.
This is why KAMs need to be risk aware. It enables them to proactively protect your company’s revenue to minimize losses and churn.
What Does it Mean to Be a Risk-Aware KAM?
It’s true that KAMs already have a lot of tasks and initiatives to manage. But becoming risk aware doesn’t mean adding more responsibilities to an already full plate. It simply means:
- Focusing on customer outcomes
- Recognizing the risk types and their ramifications
- Asking the right questions
- Practicing strategic reflection
- Wielding the right tools
Let’s take a closer look at each of these.
Focusing on Customer Outcomes
An account manager’s job is to be as customer-centric as possible. This means spending time getting to know your clients and understanding their needs, challenges, goals, and priorities.
Great ways to accomplish this include mapping out org charts, conducting voice of customer (VOC) interviews, and completing SWOT analyses. These not only enable KAMs to create strategic action plans to help customers achieve desired outcomes of using your solution. This process also helps account managers become more aware of what’s going on within their customer base.
Recognizing the Risk Types and Their Ramifications
KAMs need to recognize red flags when they see them. This enables them to identify early warning signs that key accounts may be at-risk, communicate their findings internally, and take steps to address issues while they are manageable.
These early warning signs include:
- Decreased Engagement: Reduced or discontinued interactions with your business including call, email, meeting, and platform visit frequency, or participation in account planning processes.
- More Negative Feedback: A dramatic increase in support tickets or complaints, or an overall display of general dissatisfaction.
- Slow or Negative Account Growth: Reduced revenue from an account unexpectedly is worth investigating.
- Organizational Changes: Whenever a key contact leaves a customer account or changes positions in the company, or when there are events like mergers and acquisitions or the hiring of new leadership.
- Financial Issues: Difficulties leading to budget cuts, downsizing, or mergers.
- Lack of Product Adoption or Value Realization: Failure to fully adopt your product or service can prevent the account from achieving the outcomes they anticipated when they selected your solution.
- Resistant to Renewal Discussions: An account that’s unwilling to discuss an approaching renewal.
- Reduced Referrals or Advocacy: A decreased number or frequency of referrals, testimonials, or other mutual support from a key account.
Asking the Right Questions
When KAMs are closely aligned with their accounts they’re in the best position of anyone in your organization to understand what’s going on with a client and ask essential questions when the time is right.
For example, when outside influences like the economy, marketplace, or something like a pandemic hit, they can ask questions such as:
- What’s going on here?
- What’s happening?
- What are things like in your company today?
- How are you responding to things that are going on right now?
- How has that changed your goals for the rest of the year?
When you have an opportunity with a customer, go ahead and ask those tough questions.
That’s much better than asking, “What do you think of the score of last night’s game?”
So, take the opportunity to identify unknown risks and see what’s actually going on below the surface, and be thoughtful about it.
Practicing Strategic Reflection
There’s so much going on inside your company and in the world. Account managers see lots of potential risk indicators and gather lots of data and insights. So, it’s important to carve out time for reflection to contemplate the status of each account on at least a quarterly basis.
Reflective practice enables KAMs to manage their portfolio more effectively by considering things like:
- What does this mean?
- How will it affect the customer?
- How will it affect us?
- How can we step up for the customer in an innovative way?
This is about being strategic instead of tactical. Establishing the practice of reflective account management reduces risk in your key accounts, strengthens account relationships, and boosts overall retention numbers.
Wielding the Right Tools
Knowing the signs and catching them early is easier when your KAMs are focused on outcomes, asking the right questions, and practicing strategic reflection. But leveraging the right tools enables account managers to recognize risks at the earliest possible moment to prevent or minimize losses.
These strategies help account managers spot risks early and address manageable ones as well:
Understanding the customer’s desired outcomes: It’s essential to understand what matters to the customer. Otherwise, you put the account at risk.
Using Voice of Customer interviews: Asking the right people questions helps you uncover the real problem or get more details to better understand the issues that need to be addressed.
Conducting effective Quarterly Business Reviews (QBRs): Doing a QBR as a strategic conversation with the client’s leadership can be an excellent way to uncover and prevent risk in a key account portfolio.
Preparing Account Plans to drive action: Failure to have an account plan is a huge risk because you’re operating without a plan to deliver value.
Key Account Managers Must Be Risk Aware
Key accounts represent revenue stability and growth plus loyal advocacy, referral sources, and market intelligence. Train your KAMs to be risk aware to detect the early warning signs of key account risks.
If KAMs are focused on valuable customer outcomes, they are well-positioned to spot changes and red flags as they arise. So, teach them to recognize the account risk signs, to practice strategic reflection, and how to effectively use the right tools. You’ll minimize key account risks, losses, and churn.
Ready to arm your KAMs with a suite of risk management tools? Schedule a call with a team member to see all the risk management tools included with Kapta.
