Top 4 Key Account Management Best Practices

Key Account Management or Strategic Account Management is the most effective, profitable management of your most important assets. It drives the profitability of B2B companies, and having a Key Account Strategy is the heart of any successful business in this sector.

One should keep the following best practices in mind to succeed with their Key Account Management strategy.

Watch Now: The Changing Role of Technology in Key Account Management

Smart suppliers are keen to implement KAM., Sadly, however, many KAM implementations fail and are abandoned.

The following are the top 4 things to keep in mind when it comes to your Key Account Management strategy.

1. Focus on the customers that matter most

To get started with the Account Planning template, you need to identify some Key Accounts, and you need to develop a criterion or model that differentiates them from the rest of the customer base.

The good advice here is to start small. It is easier to add customers to your KAM program than it is to ‘demote’ customers once you have told them that they are key accounts.

As per an HBR report, Corporations like Xerox keep the number of true key accounts below 100, and they have far greater resources than most and have been practicing KAM for years.

A framework like the Key Account Management quadrant helps us in knowing the account attractiveness and the strength of the relationship in that account.

• Strategic: Invest in mindshare and ensure profitability
• Star: Invest time & money. Need not be profitable yet.
• Status: Maintain the status quo.
• Streamline: Manage for profitability.

Where you find your clients on the KAM quadrant determines which accounts to prioritize for growth.

Therefore, your organization must have a clear understanding of what a Key Account means and follow the same categorization criteria throughout. Do not add certain customers to your Key Accounts program just because they have been customers for long, or they are golfing buddies with the CEO.

Key Accounts need not necessarily be the customers who are paying you the most. They are usually the customers with the maximum potential to buy new and additional products or services in the future. The customers are most likely to be consistent and loyal, and so represent significant value in the long term.

Download Now: Key Account Management Scorecard Template to Identify Key Accounts

2. Relationship is the key

Another important aspect of Key Account Management is using the best practices and skills to focus on building loyalty and a long-term relationship with the customers.
As more B2B Organizations want to portray themselves strategically unique to their customers, they must ensure to maintain and approach their relationship with Key Accounts slightly differently too.

Key Account Management is all about relationship building and most importantly trust-building between the organization and the customer. KAM wishes to see buyers considering the seller as a skilled partner, and not as a vendor. To be a skilled partner, understanding the client is of utmost importance. Knowing the organization hierarchy of your client helps to learn about the internal hierarchies of your customer. Using a tool like Org Chart (compatible with Salesforce) can be an efficient way to understand such internal dynamics within your client organization.

3. Look for opportunity

You should always be looking for opportunities to grow your sales numbers out of your existing Key Accounts. It’s far more profitable to sell more products to existing customers than to invest time and effort into finding new ones.

To make the most of the potential to cross-sell existing Key Accounts, you need a strong strategy to bring best practices to your Key Account Managers and salespeople. An additional product should be about providing customers with something that will benefit them. You might be disappointed if you push unrelated products.

Use the relationships you have already established with your clients to ask questions and find out about the issues they are encountering and look for ways to resolve those by making improvements to your existing products or developing new ones. White space analysis can help you in white space mapping to find opportunities and improve sales intelligence.

4. Choosing the right solution

Choosing the right digital account planning solution to implement these best practices of Key Account Management is a crucial aspect as well.

Here are a few things to keep in mind for the ideal digital account planning solution

• In-App Account Reviews
• Visual Heat Maps
• Relationship Intelligence
• Opportunity Planning
• Reporting and Insights
• Communication trend reports

Learn More: 9 must-have features of a good Digital Account Planning Solution

If one decides to adopt these Key Account Management best practices, then knowing its business impact is important.

Key Account Management Business Impact

The correct adoption of Key Account Management by an organization can help in providing long-lasting strategic benefits. To create better results, organizations use Key Account Management software to succeed in adding higher value, efficiency, and growth to their key accounts.

Here are two major benefits and impacts of having an efficient Key Account Management practice within an organization:

1. Key Account Retention

Losing a client is never good, but losing a Key Account can put a dent in those revenue figures. Not to mention all the cost and effort added to acquire a new client to make up for the loss of revenue. Key Account Management helps you identify and nurture your most important client relationships, hence ensuring their retention.

2. Increased Revenue

As explained earlier, Key Account Management leads to increased revenue. By cross-selling and up-selling, you help decrease customer retention costs and grow revenue from Key Accounts.

While it may seem like Key Account Management is a long and cumbersome process, there are ways to kickstart your journey. Having a step-by-step approach to manage your key accounts and building them up can positively impact your revenue in the long run. Not to mention, customer retention increases significantly. A few important parts of implementing a Key Account Management process includes:-

• Identifying key accounts
• Finding the right Key Account Management Champions
• Setting the right metrics and goals for the short-term and long-term
• Lay out clear plans of action

Phased Approach to Key Account Management

Based on where you are on your Key Account Management Journey, your approach to incorporating the best Key Account Management practices will change.

Here are a few stats to get you thinking:

i) 65% of sales time is spent on non-revenue generating activities (Capterra, 2020)
ii) 92% rate their current account planning as only slightly or moderately effective (Gartner, 2020)
iii) 33% of sales planning is not led by data-driven inputs (LinkedIn State of Sales Operation, 2021)

If any of the above stats resonate with you, then you are in need of a phased approach to Key Account Management.

• Traditional CRMs aren’t equipped to facilitate account planning
• There is no single source of truth for data and reports
• Execution continues to happen offline in PPTs and Excel Sheets
• Linking Account Based Management to Account Based Sale systematically is important

In our experience working with 300+ clients in their digital transformation journey, a phased and modular approach based on client priorities and readiness is vital to tackle issues of change management and adoption when it comes to Key Account Management.

1. Getting Started:

Impaired Relationship Intelligence
In this state, your primary focus should be in knowing who to look at, which key accounts to consider. You don’t have visibility into client organization, hierarchy or power. So you can’t leverage decision-makers in your biggest accounts.

2. Nascent State:

In this state, you might already have relationship intelligence, but lack standardized account planning. Your data is still in silos and you don’t have a lot of visibility into it. Planning across the organization is disparate leading to growth bottlenecks.

3. Budding State:

In this state, you already have a mature practice of account planning and you wanna get more from digital Account Planning solutions. This may include monitoring competition and building proactive plans to counter threats.

4. Blooming State:

In this state, although you have a matured account planning, you lack focused opportunity planning. Prone to improper prioritization, no standardized opportunity management practices in place which makes wins more unpredictable.

Learn More: Opportunity Planner by DemandFarm boosts tracking capabilities in 65+ opportunities for Dairy MAX

Being aware of your experience, and maturity level helps in having a phased approach to Key Account Management in your digital transformation journey.

Key Account Management Strategy Analysis

Key Account Planning & Management requires strategic thinking. This involves concentrated, strategic efforts that begin with understanding not only the customer’s need for products or services but also in how the customers want to be served and treated. Looking beyond dollar numbers, Key Account Management processes reinforce the need to strengthen relationships with customers. Customer needs and wants evolve over time, and account management strategies have to change accordingly in order to keep everyone satisfied. Hence, evaluating & course-correcting your KAM process is just as important as implementing it. Analyzing what strategy works best and spaces for improvement is vital.

Measuring your Key Account Management performance regularly is critical to keeping your plans on track and pivoting in case of changes. Focusing on short-term and long-term goals, measuring results against your Key Performance Indicators, monitoring your performance are all integral to ensure how well you fulfill your obligations to the key account and vice versa. Mutual long-term benefit is the main reward from analyzing your key account management strategy.

Watch Now:  Anees Merchant, EVP, Global Growth from Course5i sharing their experience around building processes & strategies for Key Account Management.