Seven Best Practices for Effective Key Account Management
Customers. The vital assets of a company.
If you’re running a business, you need to take care of your customers. They should be nurtured, and engaged so well that they should leave with nothing but satisfaction.
That’s impossible at a macro-level, but you’d be surprised at how many businesses fail to do this even at the smaller scale.
In the B2B-world, customer account management is essential.
Of course, there are businesses that are responsible for most of your company’s profits. But that doesn’t mean they’re invincible to churn.
Whether it’s a loyal customer or not, churn rates can occur at any time and for any reason.
To avoid it from both a technical and human level, you need to learn about the concept of key account management and why it matters for both loyal businesses and for mapping out the potential of your regular B2B customers.
What is Key Account Management
Key account management is all about managing the key accounts. Duh. The Key Accounts being the accounts that bring in the greatest number of profits.
Think of the company that sells the most amount of Coffee Beans to Starbucks. To the supplying company, Starbucks is the key account. If the company is worth, it’s salt in the slightest, then they would have a key account manager taking care of the specific account.
Key account management aims at building long lasting relationships with customers. It’s a part of strategy management wherein businesses work closely with one another for mutual benefit.
When done right, key account management can be quite beneficial for both sides:
- Improve cross-business collaboration
- Improves the growth metric for both businesses
- Improves profitability
- Drives innovation
The Philosophy of Key Account Management
Key account management is not a one and done process. The reason for engaging a valued customer is not to get returns for the present, but rather for the future. It’s a long-term strategy that’s aimed at investing in people that are important to a business, albeit them being stakeholders.
The Pareto principle’s famous 80/20 rule applies very much in this scenario. Keeping a good strategy for engaging customer conversions work wonders for a business.
Now, what constitutes a good key account management strategy? Well, the next few sections will outline the best practices of a good key account management strategy.
Dedicate Key Account Managers
Your account management activities might consist of managers working on a variety of different accounts at the same time. Now while that’s not necessarily bad, you’re treating all the customers, regular and loyal, in the same manner.
Key account managers are different due to their laser focus on singular B2B accounts. An ideal key account management program won’t have managers split between customers. Instead, their sole job is to manage the company account for the customer and keep in touch with them.
If you’re a business with a variety of different accounts like that, you should have a dedicated team. Besides that, your key account managers shouldn’t simply be focused on sales. Rather, they should also have a variety of people skills that allows them to collaborate with the customer account to develop long lasting business relationships.
Identifying Potential Accounts
For a business, there will be accounts that are profitable and those who are not. Now, besides taking an educated guess, how can you differentiate between the two? Well, for a business to find that out, they need to have a proper guideline for qualifying companies as key accounts.
Now guidelines are good and all, but what most managers do is decide this simply based on profit.
That is a start, but there needs to more depth to the guidelines. From geographic information, to growth potential, to revenue potential, market position, and the age of the company, there are so many factors that make up the qualification.
To make a qualification criterion for your company, you need to ensure that all the major stakeholders within the company – from finance managers, to CEO, marketing, and others – are present.
Why does this matter? Well, for starters you’ll be investing time and resources into your key account. You need to ensure that whichever key account you qualify is “worthy” of being invested on.
Simplified Onboarding Process
One of the most important aspects of customer onboarding towards a key account should status is the ease of the process. You need to make the process as fluid as possible. Now, in the beginning, the key account onboarding process is going to be tough, but when you do it repeatedly, it becomes a script that’s rather easy to follow.
With the process fluid, it becomes easy to manage customers and enter their information into the organizational account.
When a customer is a part of the system, they can go through the qualification process to build a solid relationship.
The point of entering each customer entry within your account system is to ensure that you have all the data points related to your customers.
This becomes very helpful in the event a past business becomes qualified to be a key account.
When you’ve done your homework regarding the customer, you need to next up, develop in-depth customer portfolios.
This is beneficial in the long run when you’re looking to upsell customers and in general, mapping out their preferences and pain points to your offerings.
This helps in personalizing the key accounts with your services to the customers.
If this seems like too much work, think about this in the following terms. For regular B2B customers, you’ll be making a strategy for the Next 2-3 months.
For key account management, you need to be strategizing for the next 2-3 years. The goal is to grow as your customer grows as well.
When you’ve selected your accounts, that’s where the fun begins. You need to stay communicated on a constant basis with customer. Have a schedule set up for regular meetings, and updates.
It’s a key account, so you have to ensure that they’re taken care of in the best of manner.
Make sure that any new updates, and modifications to your products are translated first to the key account.
The goal is to ensure that not only is the user satisfied, the data gathered from them helps you make better decisions.
Don’t Go Overboard
Yes, while communication is important to the whole scenario of key account management, there also has to be a line.
Good key account managers don’t just pounce on the opportunity to upsell their products to accounts that they know they’ll be with for a long time.
Since there isn’t a rush, the ideal manager will take their time, analyze psychographic and preferential information and read between the conversations with the customer.
Only when they are absolutely sure the customer requires upselling will they give out their pitch. The point here is to never overburden the customer. You’ll be doing the long-term performance of your business a favor since the order quantities of the customers are already so high.
When you’re engaging customers using the methods as we’ve discussed them in this post till now, it’s time you go about reviewing the position that you stand on.
This means conducting an audit of the accounts and your own efforts related to the key account. Of course, with the right B2B eCommerce solution and analytical software at your disposal, you can get an in-depth look at the performance of your managed account and see how much profitability it’s providing.
Now this shouldn’t be done so quickly since it’s a key account and it takes too long to develop a good relationship. What you can do is ensure that your performance is monitored perfectly.
With key accounts, you need to be proactive and ensure that you’re on top of any queries or problems that a customer face. These customer accounts are essential to the company and you need to ensure that they take high precedence.
There is a certain art for key account management that you need to perfect. Of course, trial and error matter a lot in this case. But when you do have a solid strategy with you, you need to stick by it, and modify it on a case-by-case basis.