As organizations try to be strategically significant to their customers, they inevitably realize the value and necessity of implementing a key account management program.
Key account management differs from sales in that the objective is not a transaction, and the measurement of success goes beyond the financial. The objective of a key account management program is “embeddedness”—that is, a successful key account management program will make you indispensable to your customer.
More often than not, multiple salespeople have been selling different product lines into an account deemed critical. When this account, and others like it, are selected to be part of a key account program, the controversial question of account ownership surfaces. Because of the potential conflict, a compromise is usually reached where multiple people take responsibility for the account based on their product knowledge or geographic location. This is a huge mistake.
Here are 5 tips to help you formulate a successful key account program:
1. Assign a key account to a single individual. It’s important that one person is responsible for all your firm’s activities within the key account. Without single accountability, it is impossible to have a sound account strategy. When the rationale for account responsibility is based on either product or geographic criteria, the outcome is short term and self-serving behaviour.
2. Position your key account program as a leadership development opportunity. Making the transition from a product or geographic to a client focus is about moving from a technical or local perspective to a broader business perspective. This is the transition all business leaders have successfully made. Rather than gain credibility with their customer(s) through technical expertise, the key account manager must gain credibility through in-depth knowledge of the client’s business and related issues. This includes, but is not limited to, the customer’s strategy, vision, core values, important initiatives, SWOT analysis, culture, history and decision-making process. When customer employees turn to the key account manager for information about their own company, the key account manager has established his/her credibility.
3. Limit the number of key accounts assigned to any one person. Depending on the nature of your business and the size of your customers, the number of key accounts that can be managed by a single individual will vary. The ideal number is 1. As you increase the number of key accounts assigned, the quality of performance will be degraded.
4. Ensure the key account manager is more of a quarterback than a running back. It is not unusual to have multiple salespeople report to a key account manager, moreover, functional department heads, as well as senior executives, should also see themselves as reporting to the key account manager. It is not the key account manager’s job to manage all stakeholder relationships. Rather, the key account manager should be aware of who all the stakeholders are, what their key objectives and issues are, and to then ensure that the appropriate company resources are building relationships in a strategic way with the appropriate stakeholders.
5. Communicate your program as a win-win proposition. Ensure your salespeople know that while sales reps will continue to have a transactional focus, they will find that with the overlay of a key account manager, the volume and size of their transactions will increase.
This is primarily due to the key account manager creating favourable conditions for the flow of business. It is also the result of a focused and coordinated effort that can be leveraged across the account.
Introducing a key account management program is not always met with open arms by the sales force. People always want to know what’s in it for them. By structuring your program properly and communicating the benefits clearly, you can be sure that it will be embraced by both your customers and your employees.