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ost companies have a group of accounts
that are considerably more important than
others. They’re the ones that generate the
lion’s share of revenue…and, hopefully, profit.
They need to be given special attention,
have their risks managed and opportunities
optimized – a proper dose of TLC. This often
means developing a Key Account Management
programme.
According to a Strategic Account Management
Association (SAMA) survey, companies with
well-developed KAM programmes have a 43%
higher customer satisfaction score than those
without. The research also showed that many
KAM programmes are based around clients
where the supplier’s share of wallet is as low as
10-25% - so there’s a lot to aim for.
Also…
• Generally speaking, 80% of future income
is likely to come from just 20% of existing
clients.
• Selling is easier to key accounts. The
probability of selling to an existing client is
60-70%, while the probability of selling to a
new prospect is only 5-20%.
• Using a key account strategy to reduce
client churn by a mere 5% will increase
profits by around 25%.
• Typically a sale to a new client is eight
times more costly than making the same
sale to an existing client.
With so much at stake, it’s not surprising that
many companies are keen to, and do, implement
KAM. However it is also true that many
programmes fail or are abandoned. In other
cases, companies find they have to make big
changes to get them to function properly.
Here are 13 things to consider that might help
you develop and implement a successful KAM
programme.
1. Be clear about your objectives. Remember
we are talking about key existing accounts
here, not potential ones. This is about
nurturing, protecting and growing major
clients. Non-clients fit into a careful
targeting programme – they are not key
accounts.
2. What resources can you commit to the
accounts and what levels of support
will you see a return on? Scale your
programme accordingly. Do you have a
client satisfaction monitoring process?
If so feedback should be conducted face
to face with key stakeholders across the
client organisation. CEO to CEO can be
useful here.
3. Despite the clients being existing accounts,
what level of stretch do they contain? Do
you know your ‘share of wallet’ and what
you should expect it to grow to?
4. Is your key account list like a league table?
Will accounts fall in and out of the list? And
on what basis? How will this be decided?
And how will it be seen to be an equitable
process within the business?
5. Whataretheimplicationsoftheprogramme
for the account managers and directors?
What are your desired behaviours, and how
will your strategy drive those behaviours?
Can you incentivise your account managers
to nurture and deliver against KA revenue
targets?
6. What are the implications for everyone else
in the business? A successful KAM strategy
isn’t a sales strategy, it’s a business
strategy with everyone playing their part.
All divisions, not just sales, have to treat
the key accounts as a priority.
7. Sometimes the importance of the
programme can be more widely
understood when the CEO and other board
members are seen as its sponsors. An
‘Executive Engagement plan,’ where senior
members of your board are lined up to
meet their equivalent client side, can be a
useful way of demonstrating how valuable
the client is to you.
8. A critical role of a KAM/Director is to sell
the KA management programme internally
and to evangelise about its concept. They
will need to travel. They will not always be
selling chargeable time. Marketing is part
of their role.
9. What is the budget for the programme?
What investment are you willing to make
in marketing, travel, relationship building?
How will its effectiveness be measured…
a) Improved client satisfaction or Net
Promotor (NP) scores?
b) Increased number of regions billing
from X to Y?
c) % up-shift in revenues or profits?
d) New product lines sold in?
e) Increased number of stakeholder
relationships?
10. Appoint and train your Key Account
Managers. Define and agree a detailed
job role and ensure they receive support
and training. Incentivise the correct
behaviours while having an eye on the law
of unintended consequences.
11. Direct your business to support the KAM
programme:
a) Business Development/research team
should be providing the KAM with a
constant intelligence stream about the
client, opportunities and issues that it is
facing.
b) Business development and marketing
should be supporting a strategic
communications campaign into the
client. This means using intelligence
to carefully target information about
products or services to individual
influencers and stakeholders in the
business. Be aware of anniversary dates
and be sure to offer a review of progress
with the client.
c) Support the KAM through soft skill
training, technical product training or
training in the use and exploitation of
market research.
12. Structure your business to support the
programme. It’s no use only incentivising
geographical business unit growth
(regardless of client) as they will ignore the
KA programme in order to achieve short
term revenue growth.
13. In many organisations the title Key Account
Manager is a position to aspire to. Not only
should it provide access to bonus and
reward, but it is a pivotal role safeguarding
the company’s most important assets – its
best clients. People should want to hold
the position as a route to an even more
senior role.
Typically there is a cost curve associated with
the development of an account. Year one with
any major account is likely to be the least
profitable and there are often economies that
can be discovered with an account over time.
Familiarity can actually breed margin.
I have had considerable experience in
establishing both domestic and international
key account programmes. I have also developed
a Key Account Review service that can provide a
quick assessment of your business’s practices
in this area.
The review will compare and contrast with
commonly accepted best practice and furnish
you with a brief report highlighting changes that
you could make to strengthen your business’s
approach to KAM.
So if you would like to discuss any issues
you are facing relating to key accounts and
their management, do call or drop me an email.
There’s a lot to be gained by getting it right.
KEY TO
SUCCESS
“Sometimes the importance of the programme can be more widely
understood when the CEO and other board members
are seen as its sponsors”
Top tips to help you protect and grow key accounts by Chris White, Marketing & Business
Development Consultant, EMC
CONTACT:
EMC Management Consultants Ltd,
Rochester House, 48 Rochester Gardens,
Hove BN3 3AW
Chris White
Tel: 07970 710543
Email: chris.white@emcltd.co.uk
Web: www.emcltd.co.uk
“With so much
at stake, it’s not
surprising that many
companies are keen
to, and do, implement
KAM. However it is
also true that many
programmes fail or are
abandoned”