Key Account Management (KAM) is a significant component of many B2B Sales Training courses. There is a good reason for this; KAM is used by successful businesses to manage relationships with strategically important customers and has many measurable benefits.
What is Key Account Management?
KAM is a process where you identify your most important customers and seek to grow and maximise a mutually beneficial arrangement. Clients classified as Key Accounts will enjoy benefits such as priority supply, access to a designated account manager, enhanced or prioritised customer support, etc. In return, a Key Account customer will favour your business above your competitors and forge a mutually beneficial relationship. Instead of thinking about the relationship with your client as vendor/buyer, you should think about it as a partnership.
It is no surprise that a high number of businesses want to implement KAM. Unfortunately, Key Account Management is not as straightforward as a simple change in sales techniques. It requires an organisational overhaul.
Organisational Restructure
You cannot implement KAM in a matter of weeks, or even months. Too many businesses think they can merely restructure the sales team, designate high performers as KAM Managers (or titles such as Relationship Managers to their clients) and reap the rewards. Like most things, it just does not work like that. If your Key Account Manager makes a promise to a client, ask yourself, who will fulfil that promise? Will it be Operations, Warehousing, Logistics? To implement KAM, you need to look at how every part of your organisation will fit in and ensure that you train all of the people in the chain.
Classify Your Accounts
Not every customer will be a Key Account. Sometimes even a high-value client might not necessarily be a Key Account. Your Key Account list should be limited and exclusive by design. KAM requires resources and as discussed above, organisational changes. You need to operate within your resource means and not expect each link in the chain to be able to cope should you oversubscribe Key Account services.
You should take steps to classify your accounts to determine their value to your business. New accounts might present exciting opportunities but are still an unknown quantity. It might be tempting to add clients you have had for years but do they add significant value to your business? As a rule of thumb, you should be looking for those accounts whose continued engagement with your organisation directly contributes to your growth and success.
A business ‘promoting’ an account to Key Account status needs to remember doing so is a long-term commitment. You risk damaging your relationship with your client forever should you later ‘demote’ them to a standard account.
Do Not Just Promote High Performing Sales Staff to Key Account Managers
It is a mistake many make. Your salespeople might have gained the account, but that does not mean they are the right person to manage it long-term. Key Account Managers spend most of their time working on behalf of the client. It is vital that you remember that your Key Accounts are those you have deemed to have long-term value. Instead of focusing on top-line revenues, you need to concentrate on the lifetime value of the client.
The Key Account Manager must have a thorough understanding of all costs involved. Your highest-performing salespeople can be trained to do these roles, but you need to shake them out of the top-line mindset. If a Key Account deal falls through, the repercussions for your business could be catastrophic.
Key Account Management Evolves
Once you designate an account a Key Account, the onus falls on you to remain relevant to your customers’ needs. If your programme remains static, eventually it will no longer meet the needs of your client. Businesses that succeed at Key Account Management do so because they stay engaged. They appoint somebody to oversee the entire KAM department, benchmark their Key Account department performance and ensure that management remains poised to act on any changes necessary to ensure the continued success of the programme.
Your customers will evolve and change, and your Key Account team need to be able to do the same. Investing in KAM is investing in the long-term future growth and prosperity of your organisation. Like any long-term investment, it requires a forward-looking vision and the expectation that you will need to stay ahead of the curve to succeed.
Looking for More Information?
Robin Lines Associates has helped a number of businesses implement KAM into their organisation. We can do so as part of a Sales Training, Business Development or Cultural Change programme. Alternatively, we can work with you to find a fully bespoke solution. Feel free to drop us a line to discuss your needs.
