Why Appointing Key Account Managers is a Smart Move

key-account-manager

It is an immutable business fact that 80 per cent of revenues come from 20 per cent of your customers. It therefore pays to target those key customers. Here's why appointing Key Account Managers is a smart move for your business:


Join our Business Achievers community and get access to downloads to help your business, free online training courses and network with members to help grow your business. 

Having first reviewed annual customer sales over a number of years and identified the ‘20%’ who are responsible for the bulk of sales, the next steps are to appoint a key account manager for each one and then develop a key account strategy to target more business.

Appointing a dedicated key account manager

It starts with the dedication of a key account manager whose role is to lead and manage the key account process. How the key account sees the role of the manager is of major importance. The key account will expect the manager to:

  • be the main link into your company for all issues
  • understand its business, market needs and competitive environment
  • help sell them products/services that achieve their business objectives
  • add value in the relationship to their business by, for example, advising on issues relevant to their business
  • help exploit market opportunities and identify new challenges
  • act with integrity and professionalism.

Four levels of relationship

There are four levels of how a key customer may currently perceive your business in relation to theirs. Key account management is needed to shift perceptions from a commodity or product supplier – and its implications in terms of price sensitivity and loyalty – to a value-add and partner relationship.

There are four stages in the process and operation of key account management.

1. Account Strategy

Developing a customer-account-specific sales strategy that is based on the customer’s agenda of issues and needs. A well-developed strategy will address:

  1. What you can do to add value for the customer
  2. Who you need to influence and by whom in your company
  3. Where within the customer organisation to target
  4. When to pursue opportunities
  5. Why the customer will buy from you.

Complete an account strategy charter for each key account, starting with an understanding of the accounts industry and current situation. Ask the account for their key business objectives for the next three to five years and what they critically need to do to achieve those objectives. Ask how you can help them to achieve their objectives.

Information collected and analysed is then translated into an account development plan, which sets out your objectives for the year, the strategies that are to be deployed to achieve those objectives and the quarterly actions or tactics that execute those strategies.

2. Relationship plan

Identifying the key decision makers who are in the customer’s power base and who make things happen, and devising a relationship development plan to provide value to them at a personal/social and business level. A good understanding of the key decision makers will address the following questions:

  • What is their business agenda?
  • What is their personal/social agenda?
  • By whom they need to be recognised?
  • How are they measured?

Complete an organisational map of the key account, identifying the Power Base Decision Makers (PBDM) and Influencers (PBI ), the Supporter Base Sponsor (SBS) and Anti-Sponsors (SBAS ).Then decide your mirror-relationship team alignment pairings – CEO–CEO, CFO–CFO, etc.

3. Opportunities management

Managing the pipeline of opportunities from initial identification to qualification and go/no-go decision and then from pursuit/closing to final contract and engagement.

With the account development plan (objectives, strategies and tactics) and the organisation relationship map (target audiences) in place, a programme of interaction and communication can begin through hospitality, contributing to the account’s internal newsletter or staff conference, industry conference, seminar/briefing for the account top team on relevant industry issues.

4. Performance/satisfaction measurement

Survey, interview and have early warning flags to measure and track your account performance and the customer’s satisfaction.

For each key account, an annual performance measurement and customer satisfaction survey should be carried out as a precedent to updating the account development plan and organisation relationship map.

Key Measure Reports Tracking
Opportunities Review of opportunities identified, qualified, pursued
Sales

Targets, achieved and forecast

Relationships Strength of interpersonal, mirror-relationship
Satisfaction

Buying process and moments of truth

Alerts Symptoms of potential retention issues

By appointing a key account managers for your top revenue customers, you're maximising the opportunities and building those strong relationships for upsale and recurring revenue opportunities. 

Over to you now. Do you have key account managers in your business? Tell us in the comments below. 

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Thursday, 13 December 2018
If you'd like to register, please fill in the username, password and name fields.

Member Login

Business Insights & Tips

Leaderboard

1
Jill Holtz
930 Points
2
Michael Lane
797 Points
3
Ron Immink
732 Points
4
Fionan Murray
709 Points
5
ContentLive
300 Points
View Leaderboard