Key Account Management
“KAM, SAM, GAM” – the world of account management does love an acronym. But once you get past the ‘key’, ‘strategic’, and ‘global’ prefixes, it pretty much all equates to the same thing.
These are the clients that matter.
They matter because the top performing accounts bring in a disproportionate amount of revenue, drive growth and – above all – are already your clients. Field sales is an important part of your business, but the cost of bringing in new clients (and the chances of doing so) should always come second to nurturing and developing the clients you already have.
Why? Because (at best estimate) your top 20% will bring in 80% of revenue. And if you want to sell premium products, who is going to buy them? The customers who already know you…
So, in short, key accounts matter.
Broadly speaking, Key Account Managers will employ a range of skills which are also applicable to sales in general, but it is the focus that is the central difference. Every successful sales team has learnt to be customer focused, but with key accounts there is a level of detail and care that needs to be taken to the next level, if a client is to be nurtured and made to feel special.
Interestingly, key accounts might not be mostly about sales. Or rather, for a good key account manager, sales are ‘just’ a (highly desirable) inevitable result. No, Key Account Management is more about relationships, or rather how to build them. A recent study* of sales executives found that, in terms of importance, these were the top 3 outcomes:
“Our relationships with key customers have improved”
“Our customer satisfaction ratings with customers have gone up”
“Our retention of key customers has improved”
Notice that none of these were focused on outcomes in terms of P&L, KPIs, or any other metrics – it was all about relationships. And this makes sense. At the risk of bringing Kevin Costner into any sensible discussion, “build it and they will come” is fundamental to an understanding of a good KAM process. Sales can almost be seen as an inevitable (and happy) by-product of a good relationship with a client. But it’s that way round – relationship leads to sales, not the other way around.
Let’s get personal
So it all comes down to relationships. We need to build a personal and business to business bond with customers that goes beyond our own product knowledge and forms a genuine connection. Much of this is based on skills which are the foundation of a good sales technique, but to make the leap from account to key account takes an additional level of expertise.
Key Account Management demands a level of discovery, research, and above all empathy with the customer that places it at a different level from conventional sales. Think of it as Value Based Selling on steroids, where you don’t just have an understanding of a customer’s pain points and plans, but you actually feel the pain and contribute to the gains.
And to get to this level? Well, it doesn’t just happen. But it should. Consider this – 71% of customers feel no particular bond with their vendors, while 11% are actively looking to change supplier. Given that it’s been noted that a 5% increase in customer retention can lead to a 25% increase in revenues…why are we not all putting huge efforts into training our sales executives to retain before they bring in new leads?
And given that, which are the customers that you want to retain? Well, the key ones.
A low key approach
So you really want to know how to identify, nurture, and lock down these key account customers? Well, to be honest, there’s no magic bullet. Unfortunately, like most things, it means taking a hard look at process, a rigorous approach to training, and a flexible, modular training strategy to bring the very best out of your potential key account managers…
Want to know more about Mercuri International’s Key Account Management Learning Path and how else we can help with your sales training?
* ‘The Effectiveness of Key Account Management Practices’, 2020 Survey/Research Paper, Davies/Ryals