8 steps to ensure your key account management strategy is successful
Key account management (KAM), also known as strategic account management, is a concept which first emerged in the 1970s. As a business discipline, it refers to the process of identifying or targeting key accounts, which have strategic value, and developing a deeper, more meaningful, mutually beneficial relationship with them.
However, this is sometimes easier said than done, and many sales organizations struggle to develop a strategy that gets real results.
Here, we provide an 8-step guide that will put you on the right path to KAM success.
1. Formalize key account management
Over the course of the CSO Insights 2017 Sales Enablement Optimization Study, it was found that only 33.1 percent of organizations have a formal approach to key account management, where they require their salespeople to develop strategic account plans. More than 10 percent do no account planning whatsoever.
Moreover, almost a quarter (24.8 percent) have a random approach, leaving the planning up to individual salespeople, despite the fact that this approach has been found to lead to a 7.7 percent decline in win rates. The only way to achieve real success is to adopt a formal plan, where KAM is a necessity, rather than an option.
2. Define what key accounts are
To achieve KAM success, it is also necessary to come up with a precise definition of what constitutes a key account. Crucially, all key accounts should have some strategic value. While your key accounts may often be the accounts that spend the most, it is vital that strategic worth and financial worth are not treated as the same.
“True key accounts have a special strategic meaning for the company, beyond their size,” says Olivier Riviere, in a blog post for LinkedIn’s Pulse platform. “Make a clear distinction between large accounts and key accounts.”
3. Start small and expand KAM later
When you first start to implement a key account management strategy, you should not be afraid to start small. Remember, it will be easier to classify additional accounts as key accounts in the future than it will be to downgrade accounts that have previously been identified as having strategic value.
Indeed, it may well be best practice to identify a small number of key accounts and develop a comprehensive management strategy with those, before casting the net wider at a later point.
4. Understand the full context of key accounts
Of course, key account management requires your organization and your sales reps to go much further than merely identifying key accounts. In fact, you need to go above and beyond to try and understand the full context of each account, so that you can pinpoint the best way to provide value to them.
Through sales training, teach reps to try to understand each key account’s industry, their current performance, their short and long-term goals, their strengths, their weaknesses, their challenges and their competitors.
5. Don’t push products, sell solutions
Next, it is important that salespeople adopt a shared account strategy, based on mutual benefit. In particular, aimlessly pushing products on key accounts is a poor approach. Instead, sales training should encourage reps to adopt a more conceptual strategy, where they listen to problems or objectives and sell solutions.
“A shared account strategy begins with the customer’s goals and ends with how you can help them to achieve these goals,” says Tamara Schenk, Research Director for CSO Insights.
6. Meet with key accounts regularly
The word ‘management’ in key account management is paramount, and managing accounts requires regular contact. Try to meet with your accounts regularly, or at least speak to decision-makers on the phone. This way you can maintain your relationship, identify areas for account growth, and keep them up to date with your offerings.
By taking an active interest in their business, even when you are not selling products, and by keeping them informed about your own business, you can create a deeper relationship, that is more likely to last.
7. Define sales manager roles properly
As mentioned in the CSO Insights 2017 Sales Manager Enablement Report, most sales organizations have multiple different sales manager roles, but few of these organizations define their functions correctly. However, a key account management strategy can be boosted significantly by clearly identifying which manager is in charge.
By defining sales manager roles more clearly, your organization can take the time to assess the skills of the various managers and allocate the manager best suited to KAM to the strategic accounts role.
8. Ensure account coaching is provided
Finally, the right long-term strategic account management requires your salespeople to receive specialist account coaching as part of the broader sales coaching that is provided. Unlike more general sales coaching, however, account coaching should be solely targeted towards developing and maintaining relationships.
“It should focus on the current state of account strategy implementation and next steps, as well as any needed adjustments of the strategic account plan,” Tamara Schenk says.