Key Account Management (KAM) is one of the most significant business developments to emerge in recent years. It is an organizational process used by business-to-business suppliers to manage their relationships with strategically-important customers. If its importance is recognized, and if it is done correctly, it will increase your company’s bottom line. You will not get more revenue from your key accounts if your program is not set up and operated effectively. Here are some important factors to consider.
Recognize What KAM Means
KAM is not a sales technique. Instead, it’s a way of conducting business involving the entire company, not just the sales department. It’s a commitment by the whole company to work diligently with priority customers. For example, if a key account is promised priority access to products or services that are needed urgently, it is the operations department and supply chain personnel that have to deliver, not sales.
Identify your Key Accounts
Existing customers with an established relationship with your business are your most valuable asset – the result of time, money, and careful cultivation. Regard them as an investment in your company’s economic future. These customers should meet certain criteria that your business has set. Resist pressure to add certain customers because they play golf with the CEO.
KAM Needs High-Level Support
The companies with the most success in KAM have senior executives working on their key accounts. Each executive sponsors several key accounts and visits them regularly. The aim is to make your company’s critical accounts feel important and valued. You want them to feel happy and happy customers will keep increasing your organization’s revenues.
KAM Needs Trained Key Account Managers
It’s advisable not to simply move your best sales personnel into key account manager roles. You might end up putting a bunch of people into managerial positions they are not suited for and losing your best sales people. Your salesforce should concentrate on targeting new prospects and your key account managers on working with your key accounts. KAM requires a wide range of skills – planning, interpersonal, financial, consultative. Each key customer should be made to feel that they have an “insider” in the company, someone they trust and can go to with their needs and concerns. Keep in mind that a satisfied customer is one that will stay with your organization even in times of economic uncertainty.
Set Up the Right Metrics
If your key account managers have been tasked with building long-term relationships with your key customers, don’t reward them as though they were doing a typical sales job of focusing on short-term sales. Key account managers should be spending their time managing things on behalf of the customer to build long-term value for your business.
Keep the Program Moving
Your key account program should be flexible. New key accounts can be added to the program, and former ones moved out if they are no longer matching up in terms of long-term value. You should be actively seeking best practices both within your business and outside to update and improve the performance of your KAM program. It’s also important to continually review your relationships with your key customers, and have your program reflect changes that are important to them.
KAM if implemented and carried out correctly can have a profound effect on the performance of your organization and enable you to receive more revenue from your key accounts. We can help your business make a successful transition to KAM and, over time, it will be worth it. Your most valuable asset for the longevity of your company isn’t your sales team’s prospects for new customers; rather it’s the relationships Key Account Managers develop with your existing, most valuable clients. Talk to us and we will advise you how to keep and grow your key accounts.