While all customers are important to the health of your business, some of your customers likely provide a wider margin of sales than others. Whether it’s because of repeat business, a large account size, or another factor, some clients will emerge as Key Accounts. And these key accounts require a different approach.
Key account management is a process of nurturing the relationships that form the backbone of your revenue. It’s important to differentiate your account types and allot different resources to key accounts because these customers bring something special to your company. Here are some methods to develop key account relationships and begin a process of managing these crucial customers in a personalized way.
Identify Your Key Accounts
Customers can be classified as key accounts for a variety of reasons. Though it may be easy to assume that revenue would be the main criteria that distinguishes a key account from a typical customer profile, it’s certainly not the only one.
Sometimes, key accounts are classified as such because of what they bring to your business beyond simply revenue. Yes, the size of the deal is important, but the kind of deal is as well, and so is your relationship to one another.
You may choose to classify an account as key because of a partnership or some way that you bring visibility to one another. Customers who provide significant testimonials, case studies, and backlinks may be vital enough to your advancement to warrant extra attention. This can also apply to accounts with high market visibility in general – if you’re serving a top brand or providing solutions to an industry mover and shaker, you’ll likely want to allot extra attention to them.
The length and frequency of your business relationship is an important factor, too. The kind of relationship forged over 20 years of repeat business requires a different level of care than a one-off sale. This is not to say that one-time customers aren’t important or that in nurturing key accounts, you neglect others, but that you should understand the differences between the different types of accounts you work with and allocate resources accordingly.
As you look to expand to new markets or sectors, you may begin to classify your first clients there as key accounts. These accounts can be designated as such because they’ll allow you to get your foot in the door to a new type of customer, and can be a source of rich learning. With these accounts, you’ll learn vital information about buyer profiles and the decision process, which can help you scale in that sector.
The first step towards building a key account management strategy is to find the right people to nurture crucial accounts. Hiring a key account manager means you’ll have someone dedicated to customer acquisition and retention for crucial accounts. Your key account manager’s process will likely differ from that of other account managers and your sales team.
A good key account manager likely has experience as an account executive or account manager. Internal promotions work well for key account manager positions, because these candidates already have knowledge of your company and sales process. Best of all, if they’ve worked for you as account managers or account executives, they may even have knowledge of these specific accounts already.
To be an effective key account manager requires great communication skills. These are the ambassadors from your business to your most crucial customers, so it’s important that they’re able to make your key account holders feel like they’re an important part of your business. In addition, key account managers need to be comfortable creating their own workflow and adjusting to change – as key account holders come to them with needs and questions, your key account managers should be able to accommodate them in stride.
But along with great soft skills, a good key account manager needs top-notch sales and business expertise and the ability to analyze information. A key account manager provides tailored solutions to key clients, so they’ll need to be able to analyze what the best approach is for each account.
Get To Know Your Accounts
The first thing your key account managers will need to do is a lot of research. For your key accounts, they’ll need to know the ins and outs of each company – much more than an account executive or account manager would need to know. Have them begin with an overview of the customer’s company, such as the size, their market position, and their growth patterns. But they’ll also need to become familiar with the company’s history, goals, and guiding principles.
Next, your key account managers should begin getting to know decision makers and influencers. This includes back-end research using LinkedIn, company profiles, and other repositories, but should also include getting to know them as people. Your key account managers will spend a lot of time communicating with key account holders, and in the introductory stage they’ll be getting a feel for their personalities, learning what makes them tick, and familiarizing themselves with each key client’s pain points.
Personalize Your Approach
Key Account Managers are like concierges for your most vital customers. This means they’ll be there to solve problems, welcome account holders into the fold, and nurture business relationships. Their approach will be different from sales because they’re prioritizing building a future rather than closing a deal.
But because each customer is different, your key account managers will need to tailor their management approach to each account. While check-ins and account health diagnostics can be routine, key account managers should be prepared for a dynamic workflow.
This position will likely not follow as strict of a procedure as those following a traditional sales funnel, because customer questions and concerns don’t follow a strict schedule. They’ll need to be able to set their own goals. Ultimately, a key account manager should approach customer relationships as a collaboration, which may require flexibility and quick thinking to create a personalized solution.
Monitor Your Performance
Monitoring the performance and results of your key account management efforts is an important part of ensuring that you are meeting your goals. Regularly assessing how well you’re doing gives you the opportunity to make adjustments where needed and identify areas for improvement.
To start, create metrics for each goal you set in your KAM plan. These should be specific, measurable objectives that can help you track progress over time. Once these metrics are in place, review them regularly — at least once a quarter — and analyze the data to see how your team is performing. From there, make any necessary changes or adjustments to ensure that you’re moving closer to achieving your goals.
Tracking performance will help you stay on top of customer satisfaction and loyalty, so it’s important not to neglect this step when developing a KAM strategy. Regularly monitoring key metrics will give you the insight needed to keep customers happy and engaged with your business for the long term.
Key Account Management Is An Ongoing Process
Implementing a key account management strategy can be daunting. Businesses must determine what their KAM objectives are and how to implement them effectively. Additionally, they must consider the various challenges that may arise during implementation.
For example, identifying the right personnel to manage key accounts is essential for success, but it can be difficult to find individuals with the right skill set who are also committed to the company's long-term goals. Businesses must develop strategies for staying up-to-date on market trends and customer needs in order to remain competitive in today’s ever-changing environment. Implementing a key account management strategy requires careful thought and planning, but with the right approach, businesses can overcome these challenges and achieve success.
Dedicating the resources to KAM that helps nurture the most important relationships takes time, iteration, and testing. But the payoff from properly attending to KA can be immense, such as increased revenue, increased visibility, better partnerships, and enhanced reputation management.