What Is Key Account Management?
There are a lot of companies out there that could benefit from implementing key account management processes. In the B2B world, key account management or KAM strategy has the potential to turn strategic customers into more profitable business partners. As such, key account programs, overseen by key account management teams, are often very valuable.
No key account management process should be left to chance, though. KAM is a highly strategic business move and should be treated as such. It should not, therefore, be left in the hands of salespeople who have had no specific training. It also shouldn’t be confined to one department of your business, as your key accounts will generally be influenced by multiple hands.
If you’re wondering “what is key account management?” and you want to know what it takes to be a good key account manager, this guide has all the insights you need. It includes everything from the definition of key account management to strategic account management processes and valuable training programs.
What does key account management refer to?
In a nutshell, key account management is all about building long-term business relationships with existing customers. However, these customers cannot be chosen at random. For a KAM program to work at its best, a business must promote its most valuable accounts.
A key account manager, then, will manage each long-term relationship, working across departments to get the best insight into that customer’s business. It will be their job to offer each account more to incentivize them to increase their spending and renew their contract further down the line. How they do so will be determined by a thorough accounts strategy.
The person selected to carry out strategic account management for one or more key accounts should have a particular skill set. They must, for example, be adept at consultative selling, have a proven sales performance, and be able to adapt their sales techniques to a higher-level management role.
Why is key account management important?
Key account management KAM processes are important because they bring so many business benefits. By nurturing a key customer or key customers, you increase the likelihood of those key accounts closing by up to 70%.
So, by offering an existing customer a dedicated port of call, you let them know that they can rely on you to help them hit their targets and grow their business. It’s a mutually beneficial arrangement that sees the customer buy because you’ve put the work in to make them happy.
Successful key account strategies can help both your business and those of your valued customers reach their sales quotas. So, while you inevitably have to spend more to consistently provide for your key accounts, the long-term benefits more than make amends for it. With well-trained strategic account managers and strong sales enablement, you could start to see a significant rise in revenue within the first couple of years.
What is the difference between a key account manager and a sales manager?
The question “what is key account management?” is redundant if you don’t distinguish it from traditional sales. You see, there are crucial differences between key account management and selling. The fact that some businesses don’t acknowledge this is why they fail.
While there are similarities, the major difference between key account management is that it is far more in-depth. Unlike sales managers or a sales leader, a key account team has to understand their customer’s needs and provide new, innovative solutions to meet those needs. Sales reps, on the other hand, are trained to provide what’s already on offer.
How to succeed at key account management?
Whether you’re working with sales organizations or entirely different business models, it’s important to put account management best practices into play. Account managers that don’t are all too likely to flounder because they lacked a strategic approach. In fact, according to Harvard Business Review, this is why sales companies, smart suppliers, and more usually fail to implement their KAM processes.
So, critical account management skills will be necessary and can be taught through specialist sales training. This training will help account managers identify key accounts, effectively grow relationships with those accounts, and understand helpful key account management software.
What are the 5 processes for key account management?
By now it should be clear that the secret to successful key account management is a well-conceived, strategic account management process. This should ideally be overseen by a specially trained key account manager.
A standard sales process or sales strategy managed by someone without adequate training will undoubtedly falter and most likely fail. That said, here are five processes that will help to drive your company’s success.
1. Select your key accounts
Any good key account management strategy will start with hand-picking key accounts. This isn’t a process that should be rushed. Identifying key accounts will require diligence and considerable consideration. Do so by questioning, for example, the lifetime value of each of your customers, or the amount of revenue they bring in, or their alignment with your company’s principles.
At this stage of your key account planning, it can be useful to decide how much time and money you want to invest once you identify key customers. This is best done in collaboration with finance and other departments.
2. Understand your customer and relationship
The key account management process lives and dies by how well the manager understands the customer. So, it’s important to do a deep dive into each account’s values, organizational structures, wants, needs, pain points, and more. To build an account strategy centered on these things, conduct inter-departmental meetings and consult the business’s org chart.
Understanding your company’s relationships with key accounts will be similarly significant. There are several broad types, including tactical relationships, transactional relationships, and the strategic relationships that you should ultimately be aiming for. By understanding the difference, it becomes far easier to build out a long-term strategy for improving existing relations.
3. Set goals
You need to have a thorough account management strategy that is broken down by important benchmarks. These benchmarks will help to dictate the overall direction of your strategy by determining the long-term wins you want to achieve and the opportunities you hope each account will open up.
So, make the most of account planning tools and planning templates and set goals the accounts team can realistically work towards. Remember that the best key account managers can (and should) revise goals and make alterations based on how things are going.
4. Measure performance
The best way to revise your overall strategy is to measure performance periodically. For one thing, this will help to ensure that the plan never ventures off-track. It will also give much clearer insight into what’s working and what can be improved. To that end, keeping an eye on the metrics can help key account managers decide where to channel resources. This can be done with the help of account management software.
However, just keep in mind that too much change can adversely affect the outcome of your key account management strategy. So, decide from the outset whether weekly, monthly, or quarterly business updates are best for a regular check-in. From there, you can decide to reinitialize if things aren’t going according to plan.
5. Get the right people on board
Arguably the most crucial part of any key account management strategy is the people in account management roles. They will be the decision-makers who are ultimately responsible for the success of the key account program. So, don’t just opt for your best sales rep. Your account team should be trained specifically for the in-depth and demanding job at hand.
For those wondering whether they or their employees would make good account managers, it’s worth implementing training to make sure. With virtual instructor-led sales training programs, workers with good business acumen and excellent relationship management can skill up to become great at key account management.
How to be a good key account manager?
It is recommended that you or your employees complete a comprehensive training program such as the Courses for Success Key Account Management Online Certificate Course. It teaches everything a successful key account manager needs to know, from relevant analytical skills to tips for supporting burgeoning accounts.
It’s worth the investment to ensure each individual in your management team is well-equipped to carry out their account manager role. This will lead to longer-lasting relationships with the customers that are most likely to bring in impressive profits.
Why Courses for Success?
Courses for Success offers over 10,000 online courses, all of which aim to help you in your personal development and career progression. Not only that, but you can also study them anywhere and at any time, and take them at your own pace, too.
You don’t need career diplomas or specific experience to get started. With every course we offer created to be as accessible as possible, you can be sure that all of them, from our coding courses and trading courses to design courses and developer courses, will help to boost your prospects, no matter who you are.
Beyond just the education itself, students will be issued with a certificate online after successful completion of each of the learning courses they do. Our key account management courses are no exception. Our online key account management certificates are recognized by industry leaders. You could really make a name for yourself in the key account management sector by signing up for a Courses for Success short course.