In most companies where there are hundreds or thousands of employees, it becomes very hard for each employee to link their final output to a significant contribution to the company’s bottom line. This is where I, as a Key Account Manager, really shine!
According to the Pareto Principle, 80% of a business’s revenue and profits will come from 20% of its clients. My brethren and I have the privilege to be entrusted with 20% of these clients who are the biggest spenders in our organization. Thus, I am in a position where my success/failure can critically impact the company’s fortunes.
Revenue growth Year on Year is my primary goal each year. A simple reason for this is the following:
Value of Company at the beginning of Year 1 = $10Mn
Out of which 4 accounts contribute to 80% of revenue
Value of my Key Account= $2Mn
Growth = 50%
Therefore, the Value of my Key Account is now = $3Mn
Assumption: None of the other accounts grew
My account is now contributing an additional at the end of Year 1 = 10%
My ability to enhance the portfolio offered to my client by 50% can improve the company’s revenue by a whopping 10%.
These are extremely lofty aspirations, so how do I really manage to impact the company’s bottom line? The answer is actually two-fold:
These are the benefits that can be measured in monetary terms and contribute to the revenue of the firm. I virtually have a lever by which I can bump up the revenues of the company with effort on my part.
1) Reduce Churn
When I am dealing with star clients I make it my primary purpose in life to go above and beyond the expectations they have from my company. Why do I do that? Because attracting fresh customer costs 5 times as much as retaining an existing one.
2) Increased Use of Products / Services
My job is to not only ensure that customers remain with us but to ensure that each year we are able to provide them additional products/services. This requires not only knowledge of my products, but it also requires a deep understanding of customers’ business.
3) Improved Profit Margins
Each time I sell an additional product/service to a key account I allow the overall profit margins of my company to rise. The reason for this is the elimination of any acquisition cost we would otherwise have to bear to sell this additional unit. Did you know that existing customers are 50% more likely to try new products and spend 31% more than new customers?
With key accounts forming such a vast chunk of my company’s revenue it is integral that I also concentrate on profit margins.
4) Maximize Customer Lifetime Value
For me it isn’t sufficient to just look at the year on year growth as a key strategist it is very important for me to also maximize customer lifetime value. To maximize this value it is integral for me to not just look at the short term, but a long-term view. This requires foresight and a deep understanding of the client’s business.
There are some benefits that I can get for my company with concerted efforts but they are immeasurable.
1) Closer Relationships with Clients
It is a proven fact that when the client has a single touchpoint there is a marked improvement in the trust endowed in the relationship mapping. As a practitioner of Key Account Management, I am in a position of extreme trust with all of my clients. Building relationships with such corporate executives are not easy, but once I do manage it there is a huge reduction in client-business conflicts and an enhanced ability to understand the problems a client faces. All of this further reinforces the client’s trust in me.
2) Product Development Insight
I literally have my ear to the ground the entire time. How do you ask? It’s because I am interacting directly with clients. I am in a position where I know exactly what the market thinks about our products and services and this allows me to give insights to the product team for both iterations and new product development. So not only can I strategize for key accounts I can also develop insights that can help my own company future proof itself.
3) Executive-to-Executive Relationships
The friendships I develop with high executives allow me to be their confidante in this cut-throat world. When they shift companies, I often find them still turning to me for business which results in additional clients being added to my roster. The phrase “Your Network is Your Net Worth” resonates with my soul!
4) Increase in Referrals
As stated above, I share a particularly strong bond with my clients. My proven results year on year prompt them to refer my company’s services to their powerful friend network. This results in quite a few referrals each year, which further drives down overall client acquisition costs.
I am an integral part of my company and there is a whole slew of possibilities through which I can create value for it. My strategic insights can prove to be an asset not only for my clients but also for my own company.
And that, my friends, is why I am a key employee of my firm!