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Investing in Key Account Management Is More Profitable Than Investing in New Sales

September 20, 2017/in Key Account Management /by Christine Smith

Revenue and profit growth is an important part of your prolonged success (and viability) as a company. If your business were to stay stagnant and not experience any new growth or build more revenue, it would be difficult to succeed in the long run and stay competitive. There are many strategies that a B2B company can adopt to promote growth, but let’s focus on customer-oriented strategies.

Growth and Revenue Building Strategies

Is it better to invest in building a larger sales team or growing existing customer accounts? The larger your sales team, the more they can seek out and sell to new customers. By growing your customer base, even with one-off customers, you will increase your revenues over time.

But, focusing on growing existing customer accounts can be a more effective and economical option for your business. The Pareto principle states that 80% of value comes from 20% of inputs. This statistic applies to your customer accounts in most cases, with a few top customers earning the large majority of your revenues. Using a Key Account Management (KAM) strategy that focuses on the most important customers allows you to pull as much value as possible from current accounts instead of looking for new ones.

The difference between sales and KAM can be illustrated by hunting and farming. Selling, like hunting, can be exciting and challenging. Sometimes, there may be long gaps between significant sales, while others may slip away after you think you’ve settled the deal already. KAM, like farming, helps you reap the benefits of seeds you sow into your current top accounts. It takes longer to make profits from this strategy, but the benefits usually far exceed those of extra sales efforts.

Why Key Account Management Is More Profitable Than New Sales

Here are a few reasons why KAM may prove to be a better investment for your bottom line than investing in building new sales teams:

Existing Customers Are More Likely to Buy Again

Sales is difficult because of how reluctant many new customer can be when faced with making a purchase. They may compare all other options and go back and forth a few times. All the efforts of selling may end up not leading to new profits. Key accounts are already existing customers who are likely to continue buying from you. By investing in these accounts, you’ll have a better chance of continuing to sell current and new products that fit the needs of those customers.

Existing Customers Spend More Than New Customers

It’s also been shown through research that existing clients are likely to spend more than new clients. The reason is simple: they trust you already. Since they have already tried your product or service and know that it’s good, they will feel more confident spending more with your business in the future.

This is called the future potential of an account, and it should be considered when you’re segmenting your key accounts from other accounts. Key accounts should be those that have a lot of future potential for expanding their account with your company.

Relationship-Building Creates Long-Term Revenue Streams

KAM is a long-term strategy. You shouldn’t expect to see a lot of benefits until after the first year of working with your key accounts. With the right amount of buy-in from both sides, KAM allows you to develop a long-term revenue stream by steadily increasing the revenues you’re making from every key account. Once the strategic partnership is well established, your profits from each key account should begin increasing.

Retain Your Best Customers

Creating loyalty in your key accounts keeps your main revenue sources from abandoning your company for one of your competitors. KAM creates a strong personal connection with each of your key accounts, ensuring that they won’t look elsewhere for the same services. This is the ultimate key customer retention strategy, and it generally proves to be mutually beneficial.

Sales teams do not focus enough on retaining customers. Even if your sales department does have a customer retention plan, it’s likely a one-size-fits-all model that’s not ideal for highly dynamic, complex companies that may demand more service from you.

Better Understanding of Target Customers

As you gather more data from key accounts and understand how your business and theirs work together, you can pass that understanding on to the sales and marketing departments. This helps them to create a better profile for the ideal target customer so they can focus on finding the best customers to focus efforts on in the future. With the right new customers, you may be able to gain new key accounts and dramatically increase your revenues.

Effective Word-of-Mouth Marketing

The more your key accounts like your services, the more likely they are to recommend you to other business connections that may need your services. This shouldn’t be your only way of marketing for new customers, but it’s one of the ways that KAM can prove the be a better investment in the long-run than new sales teams.

Get the Most Out of Important Customers

After you’ve segmented your customers and identified your key accounts, KAM is the strategy that’s going to help you get the most out of those customers. By focusing on understanding your key account customer’s challenges and helping them meet strategic goals, your company stands to gain as your customers do.

The key is promoting mutual growth. Each key account requires a unique strategy that will assist that specific company to grow and increase their own revenues. As their revenues increase, your ROI will increase through larger margins and potential upselling.

Key Account Management is certainly an investment, but the ROI for your company makes it a better investment than increasing your sales team. While a larger number of sales may also raise your revenues, it’s a short-term strategy that won’t get the biggest returns from your clients. You may end up sacrificing the future potential of key accounts by focusing only on potential new sales.

Curious to see how you can take your Key Account Management skills to the next level? Download this helpful ebook on how to create powerful engagement plans for your key accounts or sign up for a demo of Kapta.

Why Key Account Management Is Your Secret Weapon for Revenue Growth

September 18, 2017/in Key Account Management /by Alex Raymond

While many companies may show interesting in Key Account Management (KAM) or acknowledge a need for it, there’s still some debate over the results this practice brings to the table. What makes KAM a better approach than traditional sales strategies? Is the potential revenue growth enough to compensate for the extra resources needed to do effective KAM?

How Key Account Management Affects Revenue

It’s easy to assume that the more clients you have, the more money your business will make. This is why business growth, marketing, and competitive sales strategies are critical to the success of many B2B companies today. But, adding additional clients is not the only way to improve your revenue stream, nor is it the most effective way in most cases.

Research has shown that retaining customers is not just cheaper than creating new ones, it’s also more profitable. KAM is the next step up from customer retention. Instead of simply keeping your key accounts connected to your company, you’ll be actively helping them to grow in their field. As their company grows, so will your revenues. This is because the strategic partnership created between you and that key account will expand as they have need for more of your services at a higher level.

By showing your key accounts that you are invested in their success, you will create a high level of trust within your relationship. This will lead to a more consistent and profitable customer relationship that allows you to sell more comfortably to each company. If you understand the needs of your key account fully, you will be able to tailor your products and services to fit those needs well.

According to Paul Farris’ book Marketing Metrics, businesses have a 60 – 70% chance of selling to existing customers versus a 5 – 20% chance of selling to new customers. While this is directed more at B2C companies, the concept is true also for B2B companies. The other relevant fact to know is that statistically, existing customers are likely to spend 67% more than new customers.

Your key accounts already know you offer a good product or service, which is why they’re such important customers. What KAM does is strengthens the trust even more by turning a normal customer retention relationship into a strategic partnership. By building this trust and showing your key accounts that you’re invested in helping them grow their business, they will be more inclined to turn to you for solutions to their problems, which will expand their existing contract with you and create more revenue.

Key Account Management Is Not Just a Sales Strategy

While the numbers are compelling, it’s important that you don’t treat KAM like an upgraded sales plan. To build a strategic partnership with your key accounts, you’ll need a lot more time and effort from every level of your business, not just the sales department. Buy-in must come from all these departments as well, depending on your type of business:

Operations
Marketing
Customer Service
Your Executives
Their Executives

KAM goes above and beyond regular Customer Success processes. With KAM, your company will create an in depth, unique engagement plan for every key account separately. You should implement good sales and Customer Success practices to improve your short-term revenue, but plan to do KAM as a long-term strategy.

Long-Term Versus Short-Term Revenue Strategies

Every business needs to have long-term growth and revenue goals. Keeping a long-term focus makes it easier to be prepared for future success or challenges. With a long-term KAM strategy, your company will be more prepared to handle growth and expansion since you will see it coming ahead of time. If you focus on expanding your customer base with new customers, you may not be prepared to handle the rapid growth, leading to a poor long-term outlook for your company.

But, if you can’t survive in the short-term then long-term doesn’t matter. So, while KAM is a great way to grow your company’s revenues and plan for a stronger future, you need to combine it with an effective marketing and sales department to bring new clients into the mix for sustained revenues. New clients may also become new key accounts, giving your company an even stronger long-term KAM focus.

Key Account Management can be costly in the short-term, as you will use a lot more resources to create and maintain the strategic partnership. But, the benefits of retaining, growing, and expanding key accounts should outweigh these short-term costs by a substantial amount. If a key account partnership is not turning profitable after more than a year or two or has no potential to do so, you may need to re-evaluate your process for separating key accounts from regular customers.

Other Ways KAM Affects Revenues

To unlock the future potential of your most important existing clients, you need a great KAM strategy. In addition to the potential long-term benefits, an effective KAM strategy may help your company by:

Providing New Clients

It may sound counter-intuitive, but by focusing strongly on key accounts you may actually create new customers as well. Word-of-mouth advertising is one of the most effective forms of marketing, but it’s difficult to do unless you have clients that are highly satisfied with your service and keep returning to your company, such as your key accounts.

Creating a More Accurate Target Market

Part of KAM is learning everything you can about your key account customers. You can compile all your data on your key accounts and find out what they have in common. This may help your marketing department to make an accurate target customer profile so they can focus on finding and acquiring the type of customers your business really wants.

Keeping You Informed on Industry Trends

To be successful at KAM, you’ll need to thoroughly understand what’s going on in your customers’ industries as well as your own. This will also assist you in forecasting for the future and help protect you from unexpected catastrophes.

Conclusion

Key Account Management isn’t an overly expensive Customer Success strategy. It’s a long-term revenue growth strategy that could end up more than doubling key account spending, increasing your revenue exponentially without you ever having to marketing to new customers. Instead of focusing all your efforts on finding new short-term customers, grow your key accounts into strong long-term partnerships that benefit you both. When your key accounts grow, so will your bottom line.

To learn more about growing your revenue, download our ebook on building Action Plans for Key Accounts, or take a tour of Kapta’s Key Account Management platform.

3 Ways to Use Active Key Account Planning

August 25, 2017/in Key Account Management /by Alex Raymond

Being a Key Account Manager (KAM) involves a lot of proactive planning. You can’t rely on key accounts to ‘work themselves out’ or assume that only reactive responses are sufficient for your clients. As a KAM, it is your job to increase the value of your company services for each key client by going above and beyond friendly customer service. While you may think if a client wants something they will ask, the reality is most clients don’t know what the ideal service configuration or joint effort looks like. And really, it’s not their job to find out– it’s yours. To become a truly superb key account manager, you must go out of your way to do something special for clients that will drastically improve their appreciation of your services, and improve their relationship with your company. While every key client is unique, here are a few ideas to get you started on active account planning:

1. Package Customization

What exactly does your business offer to key accounts that could be enhanced? Depending on your company, this could be anything from manufacturing supplies to SaaS. However, the exact details don’t matter as much as the benefit a new package might provide to a client. Ask yourself how each key client gains value from your services, and how you can boost that value by designing a more customized package deal that encompasses a win-win trade of values for services. When ready to present the package, be prepared to negotiate. There is a good chance that your innovation will inspire the client to think more proactively for themselves and make new requests. This is a sign that you’re on the right track, and a good opportunity to learn what matters most to your clients.

2. Paired Marketing Campaigns

Every company has a marketing budget used to raise awareness and encourage sales by constantly launching campaigns through physical, digital, and social media. One great way to build a strong relationship between companies is to share resources in a way that saves money for both parties. If you truly consider a key account as a business partner, then you both have a lot to gain from shared marketing campaigns. Splitting a marketing budget on clever collaborative efforts is a great way to build trust. Don’t be shy about asking for advice from the marketing department regarding campaign ideas, or taking a particularly talented marketer with you to the proposal meeting.

3. Thank You Events

If your client is already happy with their personalized service and current involvement level, maintaining the status-quo doesn’t equate to passive account management. You can still show your key accounts how much they matter to you with periodic gestures of appreciation. Thank you events can vary between one-on-one private soirees for each client, or a big annual ‘we love our clients’ bash during an otherwise quiet part of the year. Celebratory appreciation is a great way to show your clients you care without the pressure of any service changes. These gatherings also provide a great opportunity to ask “How are we doing?” in a casual setting to a wide range of representatives from partner companies. This plan can build relationships with your clients, provide insights into what to try next, and create a fun and positive atmosphere for everyone involved.

When making plans for key accounts, remember that there are hundreds of ways to increase client satisfaction, boost the benefits offered, and build a stronger relationship with every key account you manage. In each situation, a mutually beneficial plan can be formed that delights the customer and ensures that both your company and theirs are better off than when you started. Use your creativity, industry knowledge, and understanding of your clients to develop the perfect proactive account planning tactics for everyone.

A Holistic Approach To Key Account Management

July 24, 2017/0 Comments/in Key Account Management /by Alex Raymond

The responsibilities of key account management (KAM) do not begin and end with your sales team. Companies with successful key account management programs incorporate the responsibilities to be included throughout their operations. In fact, the term “holistic” has become a popular way to describe good key account management practices—and for good reason.

In a comprehensive report on key account management in the European healthcare industry, Tefen, a global management consulting firm, stressed the importance of a holistic approach to key account management:

“The complete re-focusing of the commercial organization required to achieve excellence in KAM is a challenging undertaking. It encompasses a diverse range of components that impact all areas of sales and marketing. Where KAM is approached on a piecemeal basis, companies are unlikely to derive the results needed.”

Why is a holistic approach so imperative to success? When a company brings in members of different departments into key account management programs, complementary talents are augmented and new insights into current and future customer care strategies are created.

While your typical key account managers are handling much of the person-to-person dealings with strategic clients, sales and marketing departments should be analyzing customer metrics, fine-tuning your company’s collateral for attracting the right key accounts, and delivering on-point messages to those already in the fold.

Consultants with a deeper knowledge of a specialized industry of a specific key account can provide information about pending regulations and market shifts. The diverse political, regulatory, and professional networks among your company’s upper management should be considered another asset to the holistic key account management approach.

The operations division should be aware of key account delivery deadlines and should be in communication with the key account management department so that information is exchanged smoothly.

Many companies are recruiting executive-level sponsors for key accounts, ensuring that key account management personnel can relay their clients’ needs up the chain of command, expediting results that benefit the supplier-customer relationship.

In her article “How to Succeed at Key Account Management,” Lynette Ryals explains the function of these executive-level sponsors:

“The best companies…have high-level sponsors for each of their key accounts. Members of the main board of Siemens, including the CEO, each sponsor a number of key accounts and visit them regularly.”

As companies learn the value of successful key account management, leaders in key account management are showing increasingly diverse resumes and backgrounds. Many new key account managers are specialists in the technical aspects of a target client market. With no sales experience at all, they are leading teams of specialists to focus on the needs of a specific strategic customer.

In fact, in her article, Ryals warns against limiting key account management candidates to members of your sales force:

“There are technical people and project managers who can make great KAMs. You need to think about what the role requires (a broad range of skills, including financial, consultative, planning, interpersonal and influencing skills) and then pick the right person for the role.”

The point person for each of your strategic customers should have an intuitive sense of how the target industry works, have the ability to rally members within the organization, the ability to delegate tasks efficiently, and the ability to anticipate and meet a client’s needs.

Your company, in turn, may experience a sea change in how it perceives key account management and how it integrates with day-to-day operations.

Whether yours is a leading chemical company with a diverse set of clients across the globe or a small equipment manufacturer and supplier catering to a specific industry in your region, successful key account management is a holistic endeavor. How do you plan to better integrate key account management best practices within your organization?

Want to see how you can take your Key Account Management skills to the next level? Download this helpful ebook on how to create powerful Account Plans or sign up for a demo of Kapta.

What Key Account Managers Should Always Consider For Their Strategic Planning

May 22, 2017/0 Comments/in Key Account Management /by Alex Raymond

Most businesses today depend on growth to thrive. For some, it’s essential for survival – period. It’s what allows companies to upgrade programs, hire additional personnel, and beef up marketing efforts. If you have investors then there’s the added pressure to perform better quarter after quarter, year after year. How does a company do this? Strategic planning for their key account managers. These aren’t just fancy business words. Client retention and long-term satisfaction directly depend on well-positioned key accounts, and it’s what every enterprise should consistently focus on and improve upon.

Some businesses don’t differentiate between KAM and regular account management. As such, these organizations assign individual salespeople and account managers different parts of their customers’ needs. The problem with this approach, especially if your clients are key accounts, is the lack of consistency in ideas and execution of important tasks. The results sometimes lead to the loss of clients–and revenue–which significantly affects your growth.

KAMs need to develop a strategic plan for how they will handle individual accounts and also how they will manage an overall workflow that keeps them on target. Strengthening your relationships with well-thought planning for your key accounts is what will keep your company healthy and your executive team out of your hair. Not sure what types of strategies you should implement? Try these.

The Shared Account Strategy

Valuable key account management does not focus on a single party in any business transaction. As is the case with negotiations, successful key account management depends on the ability to engage both clients and your own executive team to ensure that each party gains from the relationship.

For that reason, the shared account approach begins with showing real interest in what clients want to achieve for their own clients. After establishing what a client wants to achieve, the next step is to devise a strategy that will help them attain their goals. In other words, their goals need to be your goals. Don’t view key accounts from one angle, or eventually the relationship with either your own company or your client will fizzle out.

Prioritizing Key Accounts

This seems almost silly to mention, but one surefire way to lose clients is to forget they exist. Be sure your organization genuinely values your role as a KAM and the revenue you’re bringing in with your skills. It’s easy to become bogged down with special projects for your boss or even for an upcoming marketing campaign. Don’t let these extra tasks become your primary ones. Your role is a KAM should occupy the majority of your working hours and attention. With the exception of catastrophic events in your office, key accounts need to be your No. 1 priority.

Developing Internal Relationships

Growing a business depends on multiple factors – one being the ability to seize new revenue opportunities. While much of your daily interaction is with your external clients, don’t underestimate the value of relationship building with your own office. Developing better relationships with your colleagues can actually help your company capture new markets. How so? Think about the concepts of mutual respect and gratitude in a group setting. When you display respect for those around you, these same people are more inclined to help you, especially when you’re in a bind and need help fast.

Even if you don’t have fires to put out, keeping a strong working relationship with those around you allows you to devote more time for clients and provide you with more mental space and energy to take on new ones.

Don’t be that KAM who thinks your job is the only important one in the company and that everyone else is there to serve your needs. It might be true in some cases, but your job would not exist if others’ jobs didn’t also exist. Everybody in your office has a role–some bigger than others–and you should be thankful to every person who makes your job easier.

Assessing Your Current State

A self-assessment of how you are performing is vital towards establishing how to better manage your accounts going forward. Therefore, you need to check your performance in particular areas to discover how successful your strategies have been–or if they haven’t–and what you need to adjust. These areas of performance can be interpersonal, physical, mental, or technical. Do you communicate well with others around you? Are you taking care of yourself outside of work? Do you have the most up-to-date skills and comprehension of current programs to do your job?

You also need to verify the problems you are helping your clients solve and ensure these also have a start-to-finish strategy for each one.

Takeaway

It’s not enough to just throw together a plan and call it a strategy. Understanding how everyone fits in the picture, and how to effectively and honestly measure your own performance is necessary for truly successful key account management. Step back from time to time and assess what is working, what’s not and then figure out ways to improve upon the former and eliminate the latter.

How To Gracefully Say ‘No’ To Key Accounts, And Why It’s Sometimes Necessary

May 15, 2017/0 Comments/in Key Account Management /by Alex Raymond

If given a choice between undergoing a root canal procedure and saying “no” to a client, there are some key account managers who would be more inclined to choose two hours of dental drilling over the prospect of disappointing a key account.

A KAM’s strong desire to please a client can conflict with company policy or even the ability to properly serve other key accounts. Furthermore, a KAM might feel frustrated when a client asks for something they cannot or should not be doing for them. While saying “no” is never easy, there are some situations that simply require it. If you have ever been in a situation in which you’ve had to say “no” then you know it’s not particularly easy, and has to be done carefully – with grace. To better understand how to say it, it might be helpful to understand why it’s hard to do for some.

Why Saying No Is Sometimes Hard

Declining a client’s request is a true struggle for some KAMs because of the very notion of disappointing someone for whom their jobs depends. Here are some reasons why saying “No” is so hard for some key account managers:

The pressure of keeping key accounts – KAMs worry that they will lose an order or lose the customer if they decline a request.
Desire to please – some KAMs instinctively want to please others and will do anything to avoid disappointing them. This often means being self sacrificial.
Force of habit – KAMs are so accustomed to saying “Yes” that they automatically accept requests. Saying “yes” seems like the natural thing to do.
Young KAMs who are eager to please often have the most difficulty declining a request, and this is simply due to lack of work and life experience.

When Is It Okay To Say “No”?

A KAM should understand that it is virtually impossible to always say “Yes” to customer requests. Saying “No” to an important customer is a skill that is sharpened with time and experience. The five situations below are examples of scenarios that call for a KAM to gracefully say “No” to a customer request:

There are not sufficient resources or expertise to fulfill a request.
Fulfilling the request would require illegal or unethical activities.
Time constraints preclude the KAM from fulfilling the request.
The costs to fulfill the request far outweigh potential benefits.
Fulfilling the request would set a precedent that would be impossible to sustain.

How To Say “No” Gracefully

Declining a client’s request does not have to be painful. By combining honesty with strategic planning, you can help your customer understand why you are unable to fulfill their request. Remember that most customers are reasonable people who will not overreact to your response. If you follow these five steps, you will likely realize that your customers will understand why fulfilling a request is not feasible.

Do not procrastinate. Respond to the customer’s request as soon as possible.
Thank the customer for having faith in your ability to handle the request.
Outline the reason(s) why it is not possible to complete the client’s request.
Present alternative solutions to the client if any exist.
Reinforce your staunch dedication to meeting your customer’s needs.

Revisit Expectations If Necessary

In addition to following the steps above, KAMs should ask themselves whether they properly discussed expectations with the customer. A KAM’s failure to outline expectations at the onset of a customer relationship contributes to a customer’s tendency to make unrealistic requests. The result is disappointment on the part of the customer and the KAM. If necessary, key account managers should revisit the topic of customer expectations and clarify the limitations and boundaries that should be observed. This can even be done in conjunction with a quarterly business review.

The Bottom Line: Aim To Please, But Be Realistic

Most KAMs are successful in their roles because of their desire to please others, and to go above and beyond when necessary. They instinctively accept requests and strive to fulfill their customers’ most challenging demands. However, it is important for KAMs to recognize that they will occasionally receive customer requests that they cannot, or should not fulfill.

Fortunately, occasionally saying “No” to customers will rarely drive them into the arms of a competitor. The key to saying “No” is to use the word sparingly, ensuring that customers are keenly aware of the reasons why you are not able to fulfill a request. By keeping the steps above in mind, KAMs can say “No” gracefully and still preserve—possibly even strengthen—their relationships with key accounts going forward.

How Key Account Managers Can, and Must, Educate Their Senior Managers on Key Customer Goals, Priorities, and Needs

April 17, 2017/0 Comments/in Key Account Management /by Alex Raymond

Great leaders know they lead best when their intelligence is clear, accurate, comprehensive and, most of all, pertinent. Solomon said: “Give instruction to a wise man, and he will be yet wiser.” Napoleon Bonaparte’s troops called him “The Little Corporal” because he spent time with them, learned from them, and used these insights to create his campaigns. He didn’t simply rely on what his generals told him. His battle plans are still taught in military academies around the world. General Omar Bradley, Eisenhower’s army field commander, said in an interview for the book American Generalship, “A thorough knowledge of your profession is the first requirement of leadership, and that certainly has to be acquired.”

Every successful business is led by a CEO and senior managers who have the knowledge to effectively direct the entire company, or their respective departments. We all know key account business is a major element of long-term success. Key accounts bring in more critical business, resulting in greater overall company profitability than non-key customers and clients.

Company leaders make strategic decisions based on knowledge – overall market knowledge and specific customer/client knowledge. They receive some of this from their key account managers (KAMs.) One key responsibility of KAMs is to deliver that knowledge, so senior managers make sound strategic decisions. As a key account manager it is your responsibility to ensure that senior managers make those decisions based, to some extent, on the intel you give them. If it was true for Napoleon Bonaparte, Dwight D. Eisenhower and Omar Bradley, then it is true for your senior execs. Unfortunately, not all KAMs deliver on that responsibility.

Why It Doesn’t Happen

In some cases the KAM either lacks critical knowledge, or the KAM has the knowledge but doesn’t share it. This can often be traced back to two common causes:

The KAM relies on ad hoc information gathering, or only on customer surveys, instead of an integrated Voice Of Customer (VOC) research approach.
Senior managers’ forward-planning strategies simply fail to collect and use that “thorough knowledge,” to reiterate Bradley’s comment.

Assuming a company makes best use of both surveys and VOC research, you as the KAM, must deliver that knowledge in ways it can best be used by those who drive marketing, product development, and production planning – these being the three strategic areas that are outside direct KAM responsibility.

Each senior manager and department head needs some of the available intel to use in their own way. Each manager, therefore, should communicate with you, so you know what they need. This will allow you deliver that thorough knowledge. As KAMs you should expect them to tell you what they need, so you can collect and then deliver the knowledge in the most appropriate format, and with the most appropriate focus. You may collect it as a normal part of your dealings with your accounts, as part of VOC research, surveys, or by specifically arranging meetings to obtain the information they need.

When you know why your accounts need your company’s products and services, you can sell them. When you know what else your accounts need–and you pass that on–your company can develop and market it, so you can sell more than you do now.

If your senior managers do not communicate with you to ask for your help it might be due to any of the following:

They do not understand the importance of key account management.
They do not realize that you, the KAM, have direct access to customer and client personnel who can give you the intel they–your senior execs–could use.
They do not know how to ask you the right questions, or tell you what they need, resulting in you not being able to find answers.
Your company does not have a communication/education process in place, so they cannot effectively communicate their needs up and down.

What Leaders and KAMs Should Do to Get the Intelligence

Successful business leaders keep the following questions at the forefront of their minds:

How much of our next month/quarter/year of business do we want to come from our key accounts?
How can we maximize our revenue and profitability from those key accounts?
How well do we know our key accounts’ goals, challenges, obstacles, needs and wants?
How well are our KAMs using the knowledge we gain from the SWOT analyses we carry out?
How can each department in our company use that information in their own planning, so they deliver what the key accounts need?
If that is how we can use that intel, how are we actually using it to ensure we deliver the products and service levels our key accounts need so they can best achieve their own goals?
Is our current way of using intel increasing our sales, maximizing our profitability, growing the key accounts, and keeping competitors out?
How else can we use that knowledge to help us develop improved, new products and service areas, or expand into new markets?

Integrating the Two

Effective communication is a two-way street. The KAM team must know to collect thorough knowledge by using VOC processes as well as the more reactive “customer satisfaction surveys.” KAMs should build intel-gathering into their account management practices. They should plan for goal-oriented meetings with individuals, teams, and focus groups within each key account as appropriate.

Your key accounts value research when they know you are collecting it in order to deliver better products and higher service levels that ultimately help them better achieve their own business goals.

It helps KAM performance if you know what they else you should build into your research, aside from what your own competence tells you. If you do not receive guidance from your own marketing, development and planning departments, you may not be well-equipped to provide the critical information those departments need. When you do gather all of the VOC and other intel that your internal departments expect, the company can effectively operate at a higher caliber of overall performance.

The Take-Away

This integration has clear results:

You deliver the “thorough knowledge” your senior managers need.
By working together in this way you can and do educate them.
The company-key account relationship becomes stronger, and both parties can plan ahead with more certainty. The result is a win for the key account, a win for the KAM team, which in turn is a win for the company as a whole.

Curious to see how you can take your Key Account Management skills to the next level? Download this helpful ebook on how to create powerful action plans for your key accounts or sign up for a demo of Kapta.

Key Account Managers: The Unsung Heroes of Your Business

March 13, 2017/0 Comments/in Key Account Management /by Alex Raymond

At the start of another work day, a team of executives sit down for meeting. The topic of the meeting is a review of the prior year. Sales were good; spirits internally seemed high. This would be a good time to discuss what went well, where their organization might have faced challenges, and how it overcame them to maintain a position of leadership in the market. Each member of the team has a report in front of them highlighting the prior year’s sales, new accounts, where the most sales growth occurred, and finally, account turnover.

When first looking at the list of “new accounts won,” it doesn’t look all that impressive. So where did the success stem from? Upon further review, it’s uncovered that 90% of the organization’s growth came from existing accounts.

What does that mean? It means that someone was doing their job exceptionally well. It means that, somewhere within the organization, someone understood the value of concentrating efforts on a smaller group of key accounts. At an important level, someone understood that quality is better than quantity when it comes to accounts.

Enter the unsung heroes in business today: the key account managers.

Without them and their dedicated work, the company would not be as profitable or successful. Look at them as the quarterbacks of the football team. While multiple people make up the team, the quarterback is calling the plays, and although he doesn’t get every play right, he’s good at his job.

Key account managers are on the front lines, so to speak, of customer satisfaction. It is their efforts that lead to new business within a key account and their efforts that cause key accounts to stick around for the long haul. They build and nurture relationships constantly and are always looking ahead to develop winning strategies for their customers. They determine how to solve problems and are proactively looking for ways to help their customers; they aren’t simply waiting for the next order. Most anyone can be an order taker, but not all can manage key relationships.

Key account managers are also “selling” value to their key customers. They understand that demonstrating a value that goes far beyond the actual product or service your business offers is what will set them apart. Gone are the days of price being the sole factor for winning an account. Competing on price is not rocket science, but demonstrating value and showing why a customer should work with you, even if your price may be slightly higher than the guy who just tried to sell them, is called key account management.

Key account managers are responsible for the 20% of accounts that make up 80% of a company’s business. They think about the long term and the lifetime value of a customer—not just the short-term sale. It requires a broader scope of thinking, and this concept needs visionaries.

In addition to sales, the key account manager plays a large role in planning for their accounts and are responsible for project management, strategic planning, and developing innovative ideas. In essence, they create greater and greater value for their customers and manage the relationship along the way. They work to anticipate issues before they arise and present solutions proactively.

Your key account managers are the true “super heroes” of your organization, but it’s easy for upper management to overlook all the work and nurturing it took along the way to not only maintain but to grow these key accounts. Without that key account relationship, the account may cease to exist. That is why it is just as important to be sure your business invests as much in its key account managers as it does in its top-tier customers. After all, many those key customers are there because of your key account managers—not the other way around.

The Key Account Manager as Quarterback

February 24, 2017/0 Comments/in Key Account Management /by Alex Raymond

There’s an analogy I use all the time when talking about Key Account Managers: they are like Quarterbacks in football.

How is a KAM like a QB?

You are a player and a coach. You interact with the customer, your management, and other stakeholders. You have to know how to do Account Planning, organization mapping, relationship development – and more. And you have to work with others in the organization to help them be customer-focused, too.
You don’t control all the resources needed to get the job done, but needs to coordinate among many teams. As a KAM, your support team may not officially report to you, so you need to use your influence to get the job done. This means working closely with the rest of the organization in pursuit of customer success.
You are the play caller. As the KAM, you are closest to the customer and you know what actions to take. Be strategic, but also be fast – your customer is counting on you.
You need to improvise and be quick on their feet. Plans don’t always go as expected, so KAMs need to be flexible and agile. React to what you are learning from your customer and the market. When things shift, it’s ok to call an audible.
You must be a master of the game. Key Account Management is your passion and you must become an expert in delivering value to your top accounts.
Winning is the only acceptable outcome!

It’s not a perfect analogy, but it’s a powerful one. KAMs run plays, execute passes and score points for their companies.

What do you think? What other analogies (sports or otherwise) do you use to describe your Key Account Managers?

Account Planning: Show the Customer You Care

February 23, 2017/0 Comments/in Account Planning /by Alex Raymond

I know lots of Account Managers who dread the annual (or hopefully quarterly) account planning process. They think it’s a waste of time and that they can just coast through with their customer relationships, and that everything is going to work out fine.

Well, as you can probably guess, it doesn’t always turn out that way. These days, customers have all the power and they can leave or cancel with very little notice.

So where’s the power in account planning?

It’s in showing the customer that you heard them, you are taking action, and that you CARE. Yes, a little empathy can go a long way in making a customer relationship super successful.

Account planning is about looking at the world through your customer’s eyes, and figuring out how to solve problems for them. It’s NOT about just selling more of your product or service to your customer.

So you heard what the customer said, you know what they need, and you care enough to take action. Once you have taken action, you care enough to keep the customer in the loop about how you are addressing their need/issue/problem.

And guess what? Caring about your customer’s success is one of the best ways to ensure your success.

Empathy is one of the hallmarks of great Key Account Managers. Account planning is where you can put that into action.

What else? How do you show your customers you care?

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