Key account management (KAM) is one of the most important developments in business to have emerged over the last twenty years. KAM is a radically different way of organizing business-to-business, supplier-to-strategically-important-customer relationships. When KAM is implemented properly, it can help organizations build strong, long-lasting relationships with the customers that matter most.
Sadly, many KAM implementations fail because they are met with the wrong approach. KAM involves major change. If carefully implemented with these points in mind, you can create a successful KAM program that provides unprecedented value for your customers.
Change Your Perspective
Keep in mind that KAM is an organizational perspective shift, not a sales technique. It is a commitment to work differently with your highest-priority customers, a commitment to build strategic and supportive partnerships with them. The whole service and supply system within your organization has to understand and support this initiative.
If, for example, a key account is promised priority access to urgent products or services, your team needs to deliver. In fact, the most successful KAM programs ensure that operations, supply chain, and sales teams are all on the same page when it comes to KAM best practices and effectively meeting the needs of key accounts.
More importantly, the commitment to and implementation of KAM should be supervised and championed by someone within the upper tiers of your company. KAM, as an organizational change, needs high-level buy-in at the executive level. In the best cases, senior managers are each committed to sponsor a number of key accounts to maintain special relationships with each. The sponsoring senior executive should regularly visit his or her key accounts and proactively support the work of the key account manager invested in the customer.
Companies that see the best success from key account programs recognize it as a change in the way they do business. Full implementation takes time and an ongoing effort from everyone on the team.
Identify Which Accounts are the Highest Priority
At the root of any KAM program is the careful identification of your company’s key accounts. Not only do you need to create clear guidelines for what constitutes an account as a ‘key account,’ you also need to communicate this status to those customers.
Let them know how valuable they are to your business and how their key account manager will work with them to ensure their success and ongoing satisfaction. Just be sure that once you’ve told a customer that they are being treated as a key account, that you follow through on your promise. It is much more difficult to demote a customer than it is to add new customers as key accounts.
The number of key accounts should be kept small at first and should only grow as you add more key account managers to your team. Key accounts should be selected primarily on the basis of current or future benefit to your company, not just because they have been customers for years or because of personal relationships with one or more of their managers.
Select and Train Key Account Managers
Key account managers must be carefully chosen. It’s not always a good idea to simply promote your best salespeople as key account managers. While there is certainly some crossover between those roles, KAM is a specialized role that requires a completely different approach. KAM involves a more hands-on, proactive strategy that involves taking the time to better understand a customer’s business and setting goals that support and encourage the success of that business.
Key account managers can greatly benefit from special training if they have never assumed a key account management role. Put in place systems and specialists to help develop your key account managers and grow your KAM program.
Assess and Monitor Your Success
In today’s world, there are tons of tools available that allow businesses to track a variety of important metrics. Outline which metrics best characterize the progress of your key account management program and the individual customers that comprise it. Use this data to assess the changing needs of your key accounts and the performance of your KAM program.
Your key accounts managers are there to build long-term relationships with your key customers. As such, the metric of success should not focus strictly on sales and revenue. KAM metrics should also focus on the success of the customer, NPS scores, VOC, and customer lifetime value.
By following these four steps, you will be well on your way to creating an effective and valuable key account management program. By committing to such a program, your business makes it clear, both internally and externally, that your most important customers are the backbone of your business.
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