9 Quick Steps of Key Account Management Process
Key Account Management Process The title may make it all sound easy and that the Key Account Management process can be created in 9 easy steps. But as you may already know it isn’t that simple. However, the sooner begun, the better done. Let’s cut to the chase and start knocking out the 9 steps easy and quick. KAM Glossary: Crucial Account Management Terms Explained These 9 steps go over key account planning, setting up, implementing and reviewing a key account management process. Step 1: Building a Framework Build a Key Account Management framework that suits your needs, targets and goals. Define your Key Account Management journey including adherence to processes and the timeline for your targets. Build roadmaps with milestones and goal-setting. Step 2: Account Segmentation Identify and use analytical thought to determine what your key accounts are. Analyze both potential and current contribution to determine key accounts. Use analytical thinking to understand stakeholders and understand your key customers. This helps the sales team segment the client accounts into different buckets. This will enable salespeople to come up with the right strategic action plan based on account positions. Nearly 33% of a SaaS vendor’s revenue is usually a result of a few key accounts. Nurturing these key accounts and growing with those relationships is important to produce stronger results while lowering selling costs side-by-side. Segmenting key accounts, therefore, becomes essential for future growth. To learn more about the need for key account segmentation, the types of key account segmentation and various customer segmentation strategies, check out this blog here. Step 3: Defining Roles and Responsibilities Identify the major personas that will be involved with the key account management process – Account Management, Sales Enablement, Sales Leadership, Sales Ops, Revenue Ops etc. Determine what their roles will be, how it will play into your Key Account Management process. In addition, establish how they will collaborate with each other. Step 4: Draw up a Key Account Plan Blueprint This blueprint should clearly state the main direction, opportunities, and priorities for each Key Account. It should have a direct link to customer information and should be built as a collaborative effort between internal and external stakeholders. This should then be made available and accessible to all involved in the account. It is also important to check if you have had the customer involved and cued into this plan. Having clarity on which information is important and which is not is also essential. A large amount of information is of no use if it is not relevant information. In addition, it is important to have the information regularly updated, and in real-time ideally. Step 5: Get into Action The key is to get into action and have a clear plan. This should include pondering on questions like: This should include: What needs to be done? By when (clear timelines need to be specified and agreed upon and followed)? Who will be involved and who takes ownership? How will results or success be defined, measured, reviewed and communicated? What’s your troubleshooting plan? What are the roles and responsibilities of all parties involved? What is the escalation POA? Last-minute crisis in case the account is in danger? Step 6: Track, Monitor, and Recalibrate Account plans are dynamic and relationships keep changing. It is inevitable that you will lose some whitespaces, or miss out on some crucial data in the process. It is essential to keep track of Account Plans, continuously monitor changes and recalibrate based on these changes. In addition, a vital part of the Key Account Management process includes course-correcting plans along the way to ensure growth and progress in your accounts. Evaluate Now: Framework to Assess your Key Account Management Maturity Guide Step 7: Communicate with internal and external stakeholders The plan stays on paper if it is not shared and buy-ins are not done in time. Internal Stakeholders Internal stakeholders that are the team members need to know the customer status and value to be delivered at all interfaces. Clear roles need to be charted and communicated. A few questions need to be answered: – Is the customer status/value recognized at all touchpoints? – Regarding the proposition, what you will / will not deliver? – Are the roles of all of the account managers known? Read Now: Stakeholder Mapping for Key Accounts External Stakeholders Externally, customers need to have details of all members on his account. They need to be in agreement with the proposition, opportunities, priorities, and activity. Once again, there are a few questions that must always be dealt with: – Do customers on that Key Account have access to the details of the account team? – Are they bought into the proposition, opportunities, priorities, and all planned activities? – Have the KPIs been shared with and agreed by the customer? Step 8: Opportunity Planning As important as it is to manage accounts via Key Account Management framework, it is just as important to have a proven framework for Opportunity Planning. Having a framework for monitoring opportunities, opportunity planning & management capabilities ensures that you don’t rely just on your CRM for knowing your customers. Map stakeholders and identify potential hurdles, keep track of your team’s progress on large enterprise accounts. Use relevant intelligence to strategize and plan tactics to build a buyer-focused opportunity plan. Read Now: The Practical Guide to Sales Opportunity Management Step 9: Monitor, Control, and Review the Key Account Management Process This step checks the critical parameter and is the final determinant of success with regards to the following: – Value / profitability – Plan progress – jointly monitored efficiency – Whether the identified opportunities have materialized – Whether the Account management KPIs and SLAs have been achieved – Formal measurement of relationship quality using a formal evaluation process – Whether you would still place this account in the Key Accounts roster These nine steps, if followed diligently and exhaustively, will help you set the Key Account Management process in place and make it
5 Key Account Mistakes to Steer Clear Off in 2019
Key Account Mistakes As we arrive into the new year, it is important to understand the new needs of the business environment. It is no more a one-sided selling process in key accounts rather you have to proactively and strategically handle your key accounts to get the best out of them. This year everything you do will likely be measured by the quality of your interactions and communication while selling is the number one priority. So let’s look into some mistakes we can avoid to have a better return on our efforts. 1. More The Communication, Better It Is Do not fall for this trap. Consistently staying in the loop and holding lines of communication clear and to the point is crucial, but there is such a thing called too much communication. You don’t want to hound the key account with asks and feedback. You’re there to make their life easier and facilitate a seamless relay. Reach out to them continuously and you risk appearing incompetent and not suited to manage their account. Use your best opinion and only reach out to the key account when it is critical in decision making. 2. You’re Not Creating Value, You Are Selling This is what people who want to earn a quick buck say. They’ve already opted in for your assistance so you should concentrate on building trust and value with the key account by producing quality work and making sure you are speaking to their particular business needs. While there are opportunities to upsell and cross-sell, you should not be too pushy about it. Try to up or cross-sell on how it would help their business, and show them that you care about their interests. Create genuine value. Most key accounts have been in their respective industry and have had plenty of exposure to dealing with key account managers. They can see right into a pushy sales guy who has no substance. Wait for the right time in the meeting to start talking about upsells. Don’t try to include a selling opportunity into the conversation every chance you get. 3. Short-Term Thinking You as the key account manager are being trusted with a key account business goals and that means you need to continually think ahead about what role you play in helping them achieve their objectives. Part of this is knowing the business that they’re in and being cognizant of market trends. Do you have a key account in the hospitality industry? Then you should be equipped for their busiest season, for example, one which starts in the autumn right before the holidays. Your role is important in helping to develop an approach that speaks to them and helps them hit their goals during that time. There are abundant resources that can help any key account manager stay on top of their key accounts industry trends. One way is to set up Google alerts for each of your key accounts leading you to know about what’s going on in their business. Other ways are to use resources as simple as doing competitor research or reading expert journals and industry magazines. 4. Overpromising And Under-Delivering This is as straightforward as it gets, but not handling key accounts expectations properly can lose you business and critically tarnish your reputation. When a communication initially begins, some key account managers may want to look good in the eyes of the key account they are managing by promising more than what they can deliver. This practice is inefficient and can lead to trouble. Effective account management process, unrestricted communication, level setting, and the right expectations will guarantee that you deliver what’s promised in scope on time. If your key account is asking for too much, too soon, it is up to you to put your point forward and let them know that they need to adjust their expectations. If you aren’t level setting, you run the risk of being a constant disappointment to your key account. Needless to say, that doesn’t gel well with your long-term, key account relationships. 5. Conversation Gaps Given key account management’s numerous priorities, key account managers need to be proactive communicators. Regular follow-ups may seem unnecessary, but they are critical to the success of ongoing actions. Through regular communication, a key account manager may learn more about the strategic account needs and discover new ways to add value to existing services or upcoming products. Scheduling time to check in with each account allows you to stay on top of your game and promotes critical information sharing. If you’re interested in transforming your sales post the pandemic, explore our blog on Sales Acceleration in Account Management and how it can help you grow your business in 2021.
Future of B2B Key Account Management
It is often too risky or even hazardous to make predictions these days. The pace of change is so fast and the possibility of disruption so high that divining the future would be impossible even for Nostradamus. But let me hazard a guess on the future of Key Account Management! Relationship Myths of B2B Key Account Management I always believed that the role of ‘relationship’ was misconstrued by many Concerning strategic account management. Relationships don’t give us business. The communication and delivery of ‘value’ build relationships and that in turn allows us to find more value creation opportunities. The myth of winning and dining or taking a corporate box in a baseball game to build relationships with clients will certainly be busted shortly. Social Media’s Role in Key Account Management OK, I am sticking my neck out here. Simply because social media marketing has been the buzzword for practically the past decade! To acquire new customers and to create awareness social media is a great place. But that is sales and marketing. On the other hand, if you go by the purist definition of Key Account Management where its role is played out in existing strategic accounts, social media has practically no role. An account manager should be able to reach out directly to contact(s) in existing accounts for any info, intelligence, changes, or even landscape. If an account manager is relying on social media for KAM, then s(he) is on the wrong foot already. Technological Impact on Key Account Management No discussion about the future is complete without understanding how technology can impact it. Finally, we are seeing, at least for simpler, low-value products – software has replaced human beings for generating top-of-the-funnel (ToFu) leads and also to push them to the middle of the funnel (MoFu). However, human beings are still needed to handhold the leads from the middle to the bottom of the funnel. Account Management comes in after the customer is acquired, which is beyond even the bottom of the funnel; especially for complex high-value solutions. Therefore, I can safely predict that software will not replace key account managers for at least the next 4 years. The role of key account management software will only increase. What will they do best? 1. Provide a single platform for all critical key account data (opportunities, contacts, account plans, org charts, account intelligence) 2. Enable better collaboration 3. Helps in institutionalizing key account management across the organization 4. Provide insights by analyzing aggregated key account plan data 5. Technology will facilitate key account planning and execution to make it much simpler. But what about Artificial Intelligence? Can a humanoid with AI replace key account managers soon? If you’re curious to understand how Artificial Intelligence could impact Key Account Management do take a look at my blog here. Download Now: The Future of Key Account Management Report – A Global CSO study Platforms to Watch Out For I think B2B key account management software will increasingly be embedded in Salesforce and Microsoft Dynamics platforms. With Salesforce undoubtedly being the world’s favorite CRM, it is highly improbable that people will be willing to purchase standalone key account management software. But these are just my predictions and I just might be wrong. What do you think the future of B2B Key Account Management truly is? What do you think, especially if you disagree? What are your predictions? Ebook: AI-Assisted Account Planning – Conversations of the Future Part 1
Key Account Management Vs. Regular Account Management
The one common mistake many organizations, both small and big tend to make and repeat, is to treat all their accounts the same. It is never too late, however, to correct the situation and start looking at your account types more closely. You will notice, there is a key difference in the account types, organizations like yours, have in their portfolio. Largely, accounts can be divided into two key categories- the Key Accounts and the Regular Accounts. Each of these two categories needs a different management style, system, and people. An Account Management process is required to manage Key Accounts, which require more nurturing and attention than normal accounts. Let’s look at why these two categories are different and to be treated differently. What is Key Account Management? Key Account Management is a strategic approach to managing and nurturing business relationships with the most important customers of an organization. These key accounts are typically a small group of customers who contribute significantly to the company’s revenue and long-term success. The purpose of Key Account Management is to maximize the value of these key customer relationships by providing personalized and tailored solutions that meet their specific needs. This helps in building strong, sustainable partnerships that can lead to increased sales, higher profits, and better customer retention. Furthermore, Key Account Management is not a one-time process but an ongoing one. It requires continuous nurturing and adaptation to changing market dynamics, customer needs, and business goals. What is Regular sales? Regular sales is a common criteria of selling products or services that has been used for many years. It involves the direct interaction between sellers and customers, often through face-to-face meetings, phone calls, or cold calls. Traditional sales also rely heavily on advertising and promotional activities to reach potential customers. Key account management vs regular account management : Key differences High-Value and High-Volume Your Key Accounts are the high-value accounts. So, the number of projects or tasks or transactions you win from each of these accounts may be small, but the value of each of these transactions is big. Whereas your regular accounts, maybe many in number, and each may give you, a large number of projects or transactions, but the value from each is smaller. Such accounts are therefore popular for their volumes. What is important is to remember that both types of accounts are important to your business, only that, you need to manage both differently. Customer-centric and Transaction-centric Accounts The high-value accounts are your customer-centric account, that is, the focus is on building a long-lasting relationship with the customer. These accounts usually have a longer buying lifecycle and hence, repeat orders may be fewer; but the value for each of these orders makes up for everything. The customer becomes the key here and more so, your relationship mapping with him. Trust is never easily won and needs to be maintained and built upon. These high-value accounts are important to your overall business plan. The other type of accounts is the transaction-centric accounts, where each transaction is important. Here, the transaction is not high in value, but the number of transactions is more important. Repeat business takes center-stage and that is the sales team’s objective. For effective key account management, your brief to the sales team should be to nurture the relationship of your KAs (Key Accounts) and in the transaction-centric accounts, your brief should be to increase the value of each transaction. Personalized and Automated Accounts Automation is the name of the game today and helps your transaction-centric accounts when it comes to being regularly updated about their purchases, stocks available, lead time and service issues if any. These are RAs (Regular Accounts) who have established a certain sense of comfort and rhythm for you and with you and can be managed through an automated system with minimal personal interaction. On the other hand, are your KAs who need personal and personalized interaction at all times and at every stage of your journey together. They should also be on your automated system but only so long as it helps them to function uninterrupted in matters that are more operational. Key Accounts need to be handled with TLC of the professional kind; you need to invest in the relationship by meeting them personally, understanding their needs and exceeding their expectations. Key Accounts need frequent and regular personal attention; if you take this as a non-negotiable in your business plan, you will go far with your KAs. F2F and F2A Accounts Face2Face or F2F is the nature of the interaction with your KAs and F2A (Face to Automated System) is the nature of your RAs. The main objective of your KAs needs to be personal and interactive in almost real-time; whereas the main objective for your RAs needs to be largely data-based. The course of your interaction with your RAs will be decided on the numbers that the automated system throws up, but your KAs will have to be more qualitative in nature. KAs is about managing relationships and RAs are about managing numbers. 80-20 Accounts The famous management rule applies in this case too, where 80 % of your profit will come from 20% of your accounts, which are your KAs and 20% of your profit will come from 80% of your accounts, your RAs. What resources to invest and how and where, are the key questions you have to handle. Automated systems will work best for the 80% of your accounts – RAs, whereas, you can safely invest and focus your personal time on 20% of your KAs. Knowing and serving these two different account types is the key to maximizing the potential of your sales force. It will pay to look at specialized Key Account Management Softwares to help you mine your Key Accounts and enrich your relationship for the long term. Read our blog on Strategic Account Management or Explore the complete guide to Cross-selling and Up-selling to identify unexplored opportunities for your business as well as your clients’ business and grow better in 2021. The Importance of
Time to Question key account management relationships
Key account management relationships So you are in a key account management review meeting, going over the year’s plan with the global accounts team and the business heads. During the meeting, it emerges that your key account planning could fall short this year. As a senior key account manager, you present the reasons – Team Churn in the Key Accounts, followed by Organization restructuring in the accounts. All present go into a ‘thinking’ mode, only to be interrupted by the CEO, who steps into the meeting to exchange pleasantries. “Hey, what’s going on?” You say, “Boss, unexpected organization development issues at my account could jeopardize this year’s goals. “Pop came the question, only CEOs ask.” OK. So how are we doing in terms of our relationships with this account? And how does this relationship scale with time and corporate actions?” The question didn’t surprise. For you, yourself have been looking for account planning solutions since the time people issues have been surfacing at the key account. Key Account Management Relationships are the core As we see in the example above, key account managers can make significant gains by taking good care of their relationships at the key accounts. Surprisingly, it does not get the necessary attention until confronted by a dire situation. It is ironic because sound strategic account management is supposed to anticipate such issues and propose proactive remedial measures. Gaps, when discovered, could be both – strategic and transactional. Strategic Gaps Such gaps are identified because the key account management strategy missed considering such factors in the overall strategy. It does happen that while collaborating with the key account for value creation, teams from the key account side tend to discount disruptions that could emerge from their side. It is natural for key accounts to be more cautious about their suppliers. An established Key account management process driven using systems and structure can very well address such limitations. At times, the hunting nature of the business at supplier organizations also tends to impact the focus on relationships within key accounts. Transactional Gaps These are mostly operational issues that are discovered only when they happen. The reasons could range from incorrectly updating the CRM to not documenting minutes from the last meeting. Identifying, addressing and testing these gaps will enable key account management driven businesses to leverage relationships better. Eventually, this could help better value creation and confront challenges when they crop up. Questions to Ask If you are an account planning driven business that has witnessed situations where depreciation in relationships (for reasons whatsoever) has compromised business goals, the following questions are a good place to start. Who are the people who count in the Key Account? Status – Can you connect each name and role back to the existing client relationship? Budget – What budgets does each person at the key account control? Decision Makers – What specific areas of the decision-making process does each person participate in? Power Equation – Who is a champion, gatekeeper, influencer, detractor orally? Influence – What internal stakeholders or networks can be activated to develop or nurture the right relationships? What are the relationship dynamics amongst the team members at the Key Accounts? Capturing the who’s who in the key accounts is ok. It is indispensable to push further. Key account management teams don’t stop at that. They go further and capture the intensity of the relationships that exist within the key account teams. Ask yourself – Are you able to bring a real-time, flexible, and responsive approach to managing multiple stakeholders? How to map and track people and their ever-shifting connections, motivations, dispensations, and affinities? Are you set up to have custom-made contact plans that can evolve with the relationship dynamics? Can these changes be captured formally and reflect throughout the system to all internal stakeholders? Relationship Context? Actionable insights from the above relationships require the presence of context. Context would help set the agenda at all times. Big Picture – Can you connect the roles and titles to the bigger picture of the account relationship? Are you set up to create value in the customer’s context and not just in your own comfort zone? Quick View – Do you have an easy and convenient way to view these networks of context and spot opportunities for value creation? Institutionalizing Relationships? Key account relationships should outlive the KAMs and all the members that constitute the strategic account planning teams. Therefore, it is critical to building accounts and people’s knowledge into the system so all internal stakeholders are tuned in and can do their part seamlessly. The key questions to ask are as under. Time – How much time and effort is spent on making – in real-time, and as productively as possible – the right information and context available to internal stakeholders? Institutionalising – How safe you are from attrition and losing control of valuable relationships because of people’s changes? Process – How easy is it for you to capture the right information into the system as a part of the process What can technology do for this web of Relationships? Technology holds the power to automate many manual tasks. Thus, freeing up time the KAMs time to ‘think’. Manual management of vital relationships with a spreadsheet or notebook is not just inefficient, it’s also a risk. It only makes key account management vulnerable. Are any of your relationships being managed manually? Do you then face the following limitations? Missed Opportunities – Are you missing opportunities due to a lack of visibility or ability to connect people to the business context? Single View – Can your tool help connect the dots across all the variables and show both – the big picture and the micro-picture, based on the need? How many of these 15+ questions on account relationships can your current key account management strategy answer with confidence? Should there be more questions that need to be addressed? Should we also look beyond relationships into the realm of product/services, market,
Key Account Management, The Jewel in Sales’ Crown
Sales is a critical function in any organization and have always been able to attract internal resources, both human and capital. Key Account Management began as an add-on to sales or a different way to structure departments and assign responsibilities. Though it received plenty of account management focus, there were few specialized human resources and even less capital or technological resources. Only when the number of key account managers reached a tipping point did firms felt the technology-pinch, unable to support collaboration, consolidation or standardization of methodology. But the times changed and with them the behavior of the Key Account Manager. So why have companies been willing to spend resources on CRM, sales training, etcetera but not on KAM? It could be because top-line results are credited to front-line sales while key account managers slog behind the scenes. Top management commitment is important, but it is not enough to create a successful KAM program. Without adequate resources can a company create the foundation on which to build a robust KAM system? In our experience, a three-pronged approach to KAM yields the best results. 1. Choosing the right Key Account Managers: Your best salesperson is not necessarily the best key account manager. Along with influencing skills, they also need collaborative and general management skills, the ability to interact with internal and external stakeholders, to identify problems and design appropriate solutions. It definitely helps to have a manager who can take a long-term perspective on building relationships. While you may choose a person for the role based on some inherent traits and skills, it is also important to invest in training key account managers to help them achieve their full potential. 2. Choosing the right technology: Just as sales managers are enabled with CRM, key account managers need to be enabled with KAM-specific technology. Key Account Management software draws data from a CRM like Salesforce, thereby avoiding data entry and duplication. It supports collaboration across multiple departments and executives at different hierarchical levels. It helps create a relationship matrix and identifies white space or white space opportunities. A standardized process and unified view help improve performance. 3. Measuring and monitoring achievements: Here is a truism that is often ignored: Sales targets and key account goals are not the same. If you want a key account manager to develop a long-term perspective, you have to create long-term goals and pick quantifiable criteria that measure the health of a key account. Account management tools are a great asset as it gives you a multi-dimensional view of the key account; revenue, profitability, deals in the pipeline, relationship strength, untapped potential, share of customer’s purchase and more. Each parameter is measured and monitored individually, followed by analytics to calculate the overall health of a key account. The first CRM software, introduced in the nineteen-eighties, was a simple digital Rolodex! It took several decades and massive technological innovation before CRM became a necessity, not an option or luxury for sales professionals. However in today’s technologically advanced world, decades have shrunk into years and companies that have not invested in KAM technology are not able to exploit, or even recognize, the potential of their key accounts. Your budget should no longer be a debate about CRM or KAM. If you want to maximize growth and tap the potential of your key accounts you need to enable your key account managers by investing in KAM technology. Stop treating KAM as a stepchild. In today’s customer-focused, solution-oriented market, KAM is the jewel in sales’ crown.
How can KAM Sales help your Organization?
What is Key Account Management (KAM) Sales? Key Account Management, or KAM as it is called, is usually not a transactional activity. It involves larger stakes and requires a buy-in from all stakeholders that are involved. After all, KAM Sales is not a single activity we are talking about, but a whole relationship that we are putting on the table. Essentially KAM Sales is a much wider term than sales will ever be. Typically, there are certain challenges that arise with it every now and then, such as, short-term interest wins over long-term goals. Secondly, it can be overpromising. This often leads to mishaps and even fatalities of Key Accounts, especially in cases of overpromising and under-delivering. When everyone at the organizational level is not looped in, there could be a rise in confusion, chaos, and inefficiencies. But all these probable gaps can be taken care of if certain things are seen to. Identify the Key Accounts for KAM Sales Every Account can’t be categorized under Key Account Sales. Identifying key accounts is crucial. Strategic and complex organizations, which are inclined to participate in collaborating and co-creating value should be adopted as Key Accounts. These Key Account Sales should have potential and considerable long-term possibilities to ensure maximized lifetime value. Conduct a historical study of KAM Sales data Key Account Management Sales does not mean jumping into an engagement that may turn out to be lopsided, one way or the other. Once the potential is identified, it pays to study past data to understand the dynamics of the account in areas such as product, pricing, service- gaps if any and growth potential. Based on this, a mutually beneficial contract can be drawn. Find and train the right people for KAM Sales positions Key Account Managers may not be your best salespeople and vice versa. Sales Acceleration needs a unique skill set in the key account management scenario. It is more of an overarching function like that of a Project Manager. This is a CFT, a cross-functional team that will come from top to bottom in the hierarchy and left to right, across functions. It is integral to have the right team who knows what the stakes are and what they have to do for their accounts to grow exponentially. Track, Measure and Build The true measure of a Key Account is in the lifetime value of that customer to your company and the value-added to the customer’s bottom line. This is what one needs to track and measure regularly and build a Key Account Management Sales program that evolves with the customer’s or rather, the Key Account’s evolving needs. The Sales team overseeing the Key Accounts should comprise of people who can identify customers that can be moved up the KAM status. The alignment between marketing and sales will define the success of your KAM technology adoption program. It is all about collaboration and co-creating success. This is how we feel KAM Sales can be a fruitful endeavor for any organization, please reach out if you have any thoughts to share on this topic! I’d love to hear from any reader who’s been inspired by this blog.
Can Artificial Intelligence and Machine Learning impact KAM?
My marketing team often insists that I write about Key Account Management. Until now, I often thought that since there is already so much written about it, how could I possibly throw more light on the subject with the aim of ‘adding more value’ to it at the start of the new year. So, here’s what I thought I’d do; I thought it better to summarize all that I have written in the past and open up a new discussion on whether or not (and most importantly, how) Artificial Intelligence (AI) and Machine Language (ML) can be used for Account Management. May I just mention here that I don’t know the answer to the above! Not yet at least! But here’s what can help: I had once written about how to segment key accounts. It is essential to understand, at least once a year, which of your accounts are your ‘strategic partners’ and in which accounts you are a ‘tactical vendor’. Or somewhere in between-Cooperative/Interdependent relations with clients. This exercise need not be complex or time-consuming. Another time, I had elaborated on white space analysis and metrics to track for Key Accounts in a two-part blog. We can identify areas of growth in an account by building an account landscape that consists of the ‘Buying Centers-Offerings’ matrix. The account growth if analyzed separately in terms of ‘farming’ and ‘mining’ growth will give a real picture of where the growth is coming from and future possibilities. With the growing use of technologies like AI and ML, my mind is often occupied with assessing its true value on Key Account Management. Does it support KAM just as well as it does marketing, sales, and other associated business activities? Honestly, I still don’t know the answer. Even as a participating industry professional I too am often confused with ABM/ABS/ABE claiming Key Account Management space with AI/ML. For those uninitiated, ABM/S/E stands for Account-Based Marketing/Sales/Everything. While I do agree that AI/ML algorithms can be built to identify the right accounts through intent/ searches/ announcement these accounts can also be targeted effectively using display advertising based on role/function and their watering hole (media). All the AB(X)s still only focus on acquiring an account in the B2B marketing context. That is not Key Account Management. The fact is, KAM is what you do after acquiring the strategic account. Some of the most critical elements of Key Account Management include: Understanding the customer’s business deeply. How they are structured, which business units are growing rapidly, geography-wise spread, what are the strategic initiatives and management changes – are some of the areas to study. Creating a solution using my products/services to create more value for the customer’s business challenges. Understanding which of our current engagements could grow as well as which are at risk and what are the new doors to open. Collaborating and building relationships with people in the customer organization as well as internally within my company. Making account plans with the above information leading to revenue goals, specific actions, and timelines. All these listed elements are human processes that require a fair amount of cognitive thinking. Every account for a key account manager will have unique situations requiring tailor-made solutions, approaches, or strategies. I don’t see a possibility of it ‘trending’ to make any regressive analysis here. The key takeaway is that – any good account manager will use heuristics rather than a deduction to make decisions. The best I have achieved is to create frameworks, (not processes!) for strategic account management. A key account manager is constantly asking questions to herself and her collaborators. Whereas, AI/ML is about answering questions. That is where I am stuck and I am hoping 2021 will give me some clarity on this. You can explore the innovations in KAM Technology in recent years by reading our Ebook.
Key Account Management (KAM) – Past, Present and Future
KAM Definition – Key Account Management is a strategic approach distinguishable from account management or key account selling and should be used to ensure the long-term development and retention of strategic customers. The acronym used by professionals in this industry is KAM. Past What the customer thinks he is buying, what he considers “value” is decisive – it determines what a business is, what it produces and whether it will prosper’ – Peter Drucker Origin of KAM The origin of KAM lies way back in the era of Peter Drucker. A learned man, he understood the concept of customer dynamics and forecasted the change during his time. It was then that organizations realized the concept of soft selling, and started focusing on relationship mapping with their customers. According to research, companies that focused on long-term relationships with customers generated more profits than the companies that focused on short-term customer goals. Hence maintaining long-term happy relationships with customers became a ritual with practices like contact management, behavior-based loyalty and reward programs, etc. Organizations began to develop separate teams of ‘Account Managers’ that were solely responsible for looking after and managing the company’s larger and more valuable Accounts. Special teams were even developed to manage ‘high potential’ Accounts that needed to be nurtured and developed over time for a potentially rewarding relationship. Pareto Principle As the markets evolved, customer – buyer relationships evolved. The Pareto Principle was a defining observation – 80% of revenues came from 20% of Accounts or Customers. Those Accounts were later referred to as ‘Key Accounts’. Organizations started focusing on resources primarily on Key Accounts. However, Strategic Account Management was still an underserved opportunity. The people responsible for managing Key Accounts were in reality ‘Key Account sellers’, managing opportunities rather than the relationship. Present It is only in the recent few years when companies have started realizing that when buyers and sellers share a collaborative, interdependent relation, productivity increases in the long term. Looking at the current market scenario, there seems to be a rise in overall KAM technology adoption and awareness across industries globally, but if we talk about the United States, the overall Google searches for KAM have remained constant over the past 5 years time. In the graph from Google Trends below, you can see the number of searches for Key Account Management in the United States over the period of the last 5 years. Well! A possible reason for the stagnancy could be a lack of perception about KAM as a dynamic or trendsetting function in the organization. Key Account Managers are a bit like unsung heroes, chipping away at complex relationships, away from the limelight. Needless to say, they have almost the same pressure as the regular Sales team to meet their quotas, but because successes are not so fast or visible, they tend not to be top of mind when it comes to the development of enablement or automation tools like CRM. Automation is generally some modified version of CRM because the focus tends to remain on the Key Account Managers individual relationship building skills. Methodologies for KAM Sales tend to be homemade, and core processes are not systematic or consistent across the organization. However, like every other field, technology is driving the world and KAM can’t escape for long. Key Accounts are getting increasingly complex, dynamic, global and networked. There is a genuine need to be able to automate and institutionalize key processes, reduce a person’s dependence, enable the people who drive KAM, manage data and analytics and of course track customer goals and opportunities in a more structured way. Associations like SAMA are trying to spread awareness globally about Strategic Account Management & emerging technologies through their efforts and events. We are looking forward to seeing a lot more KAM tech in Dreamforce’16 coming up this October. However, the traditional mindset that considers KAM an ‘art’ tends to question the scope of technology. We say it’s time for organizations to start asking- can technology transform the way we manage and grow our Key Accounts? It’s a question that we just can’t afford to ignore anymore. Future The future of KAM is about not just increasing productivity in the long term but about creating value for all shareholders in the ecosystem. With increasing complexity, it’s imperative to look for solutions that operate at the cross-section of the art and science of Key Account Management and help take execution to the next level. On the positive side, some industries are leading the charge for KAM, with Google trends showing a positive increase for KAM searches over past 12 years across Banking, Health and Business and Industrial areas. These are also the early adopters for KAM technology. The 90s was the year of CRM; 20s can be the year of KAM technology. What do you think? We’d love to hear your views on the past, present, and future Key Account Management, and especially on technology to transform Key account management. Write to me and we will share the best ones with all our readers on this blog next month!
Did you read MTA’s Buyer Guide on Key Account Management Software?
Thinking of which is the best Key Account Management Software in the market? Here is the answer. MarTech Advisor (MTA), one of the world’s leading sources for marketing technology news, research, product comparisons & expert views, recently published an extensive Buyer’s Guide to Key Account Management Software. This 32 page KAM Bible covers a wide range of topics from opportunities that induced the need for KAM enablement to listing Key Account Management software currently in the market. It makes us happy to announce that this exclusive Buyer’s Guide rates DemandFarm as the ‘Best-fit KAM & Sales Enablement tool’ in the market. Too busy to read the report? Don’t worry, we have got all of it covered for you. We have summarized all the useful information in this easy to read the blog. Without further ado, let’s look at the salient points that led to the rise of Key Account Management software. The Need for Key Account Management Software The inclusion of Key Account Management into various business processes has changed the dynamics of the relationship mapping between organizations and their Key Accounts. The importance of managing relationships with strategically significant customers was always a ‘no-brainer’, but only a few organizations were able to carry out the Key Account Management process efficiently. The times are changing for the better and organizations are investing both in Key Account Managers and Key Account Management tools. So what was the catalyst that brought forth this change… Catering to Key Accounts is paramount to an organization’s revenue growth. This fact is made evident by the 80/20 Pareto Principle which states that 80% of your business comes from 20% of your customers. Key Accounts are a boon that keeps on yielding profit. With cross-selling up-selling in Key Accounts, the revenue increases without the hassle of acquiring a new customer. The customers you will acquire with referrals from Key Accounts helps ease the strain on your marketing and sales efforts. Key Accounts are hard to acquire and even harder to maintain. In fact, the real challenge of an Account Manager starts after the acquisition of an account. The inclusion of Strategic Account Management processes into the organization helped the management of Key Accounts. However, a tool was needed for the effective implementation of these processes. The statements above prove the true worth of Key Accounts and the need to harvest, nurture and grow them. This need led to the inception of Key Account Management Software. Challenges resolved using Key Account Management Software: Data in Silos – Data in an organization is spread in silos or distributed across multiple systems. This restricts Key Account Manager from identifying and extracting complete information regarding their accounts. Key Account Management Software plays a significant role in handling this challenge efficiently. Lack of key insights – Even if a Key Account Manager is successful in accumulating all the data points, they are useless without key insights. A Key Account Management software helps extract knowledge from this data, providing the KAM with key insights thus aiding in realizing the optimal potential of Key Accounts. Multiple tools – With various individual tools and systems such as CRM, Word, Excel, and PowerPoint, etc for their day to day work to manage Key Accounts, the life of a Key Account Manager became tough and chaotic. A Key Account Management software helps solve the complexity by directly integrating with existing CRM and providing insights and analysis from existing data. What should a Key Account Management Software deliver? A good Key Account Management software should increase Key Account Manager’s productivity while simultaneously providing him with key insights and tools to manage and grow Key Accounts. Key Account Management software should be a one-stop-shop for everything related to Key Accounts. Following are the things that a Key Account Management software should deliver: Visual Org Chart Communication Tracker Contact History Affiliations Mapping Data Management ( collation, formatting, storage, etc.) Data Consumption Approach Real-time, anytime, anywhere access Collaboration Tools Easy report generation, exporting and sharing Reminders & prompts Data Analytics Finance Tracker How to evaluate a Key Account Management Software? Choosing the right Key Account Management software is a challenge, which a guide book like this is addressing. Following are some parameters to evaluate a KAM software: Trial or Demo Cost of Deployment Ability to Customize Integration with existing CRM Onboarding and Customer Success Speed of Deployment Business Impact Areas Adopting an Account Management approach along with the right tool can help transform your business. Following are few KAM enablement impact areas: People cost – Account-related data in an organization is highly vulnerable. All the business intel is tied to Account Manager; if he leaves so does your data! Opportunity cost – An organization loses deals and opportunities every day due to the lack of key insights. These insights are hidden in data silos and are hard to discover without the right key account management tool. Business cost – Without the right tools, the highly paid Key Account Managers are forced to waste their time on creating reports, collating data and tracking down people. Key Account Management software in the market currently Following is a list of Key Account Management software in the market currently for Medium/Large segment: Now that you know about the best Key Account Management software in the market don’t forget to request a demo of DemandFarm. Remember, we are just a click away!