not all customers are equal, which is where key account management becomes invaluable.The more companies work with their customers, the closer you are … and therefore, more likely to get, more business from them.

KEY ACCOUNT MANAGEMENT:

Unlocking customer potential

B2B companies have been successfully delivering key account management strategies for many years and seen the value it brings to create, plan and deliver to a major account as an account team. Business theories based on Pareto’s law tell us that 80 percent of sales come from 20 percent of clients. So obvious practice would be to identify these big spenders and do everything in your power to keep them sweet. Of course, not all customers are equal, which is where key account management becomes invaluable.

 In a customer-centric organization both long term and short term measurements apply, whereas in traditional product organized firms, nearly all the focus is on revenue quarter by quarter.

Examples of longer term measurements, qualitative as well as quantitative include:

• ·        Lifetime Value,
• ·        Return on Customer,
• ·        penetration level such as talking to the CEO
• ·        increased share of spend,
• ·        customer satisfaction improvements,
• ·        Customer profitability.

SELECT KEY CUSTOMERS

When it comes to separating out the cream of the crop, obviously it would be too time consuming to physically go through every single client on a company database and profile them. The vast majority of firms prefer to let technology solutions do all the leg work through segmentation. Some of the criteria factored in might include which industry sector clients fall under, what products they are buying, sales value, geographical presence as well as potential for new or extra business.

Because businesses are constantly changing and evolving, it is important to continually assess current and new clients. For example XYZ ( a past client of SynergyManager) , which is a multinational project management  consultancy,  puts a lifecycle of a year on a client showing potential as a key company, mapping out an account plan with KPI’s against it that is evaluated on a quarterly basis.

Ultimately KAM delivers more value to customers if the Key Account Manager asks the key question: "what’s in my customer’s interest?" The key is to involve the customer in the setup of the key account management strategies approach – perhaps they are not interested in being account managed – and to continue to sell and develop the benefits of these strategies. Also, to know when to review its status and move to different, often more cost-effective means of delivering account management, for example, through phone-based or customer-led priorities only.

XYZ, a multinational project engineering company, has also developed an ideal prospect profile to look at desirable characteristics in a customer, and score potential clients or companies according to the value of targeting them outside its own marketing. However the CEO (who spends 25% of his time on key account management) , emphasizes “…These customers are leaders in their particular field so that gives us a massive advantage of positioning ourselves with the leaders, therefore earning the right to go into the rest of that industry with some very strong success stories… 

The more companies work with their customers, the closer you are … and therefore, more likely to get, more business from them. You have to be confident enough to want to get as high as possible, in the organization hierarchy …because that’s where the real decisions are made. Don’t sit at a level where business is just commissioned to a supplier. Really get under the skin of who the right relationship needs to be with then use that relationship to leverage your presence and become the voice of your company with other people.”

ADVANTAGES OF KAM APPROACH:

“Time is such a key factor for people today. Our clients like access to somebody who understands them and what their needs are on an ongoing basis,” says the Vice President Marketing. “Without key account management we would be a tactical supplier rather than a partner, who means the client, is not buying well.

“Key account management also allows us to have a relationship with procurement, which is increasingly more important in the sales and purchasing cycle. From our perspective, this helps us signpost into other areas of their business where we did not necessarily have a presence. From the client side, the key account manager gives procurement staff the opportunity to leverage what they’re buying from us across a number of different services that would otherwise be commissioned or bought by individual departments.”

KAM – COMPETITIVE DIFFERENTIATION

The competitive differentiation derived from Key Account Management can be summarized as follows:

1. ¨      Understand each customer and anticipate their needs, Appraise their potential Understand the right key accounts to manage, involving them in the process and including key prospects in this approach
2. ¨     Set out suitable two-way plans and structuring the right team approach (this can be different by account)
3. ¨     Develop key account management skills and competencies to deliver
4. ¨     Ensure your key account management proposition is different to your standard proposition
5. ¨     Ensure you are building the right knowledge/database on your key accounts, which are often different to other accounts
6. ¨     Continually measure and monitor the results of your key account management activity and address/reclassify where appropriate.

For all high value product companies, key account management is about treating every customer individually and looking at how the relationship might develop in the future. By developing strong, ongoing relationships with best customers they can generate more revenue by encouraging repeat purchase rather than the higher spend of trying to convert prospects into customers.

A Marketing Director (whom I have work in a sale turnaround campaign)who all his career has been into Key Account Management said

 “We understand clients like that in terms of what  materials they might have used in the past and what their needs might be in the future. For example, last year based on a lot of feedback from clients we developed a new consulting product .You should speak the client’s language, not the company’s language, and don’t just go in with a toolbox of things to sell. 

That’s about having a really in depth understanding of what their business is about. You have to be recognized and connected through industry, trade associations and so on, and have a broader view of what challenges each client might have. It enables you to be ahead rather than reactive,” 

Simple words straight from the gut... but can you implement these simple words in letter and spirit ??? THEN SALES SUCCESS IS ALL YOURS!

with best compliments

Dr Wilfred Monteiro

www.synergymanager.net