What is account management?
Account management is the daily management of the customer's accounts in a way that makes them want to continue their relationship with your company. It is an extension of the sales process and starts right after the sales transaction is complete. The main focus of account management is nurturing customer relationships.
Account manager's role
The role of an account manager is to prove the company's value to the customer, so they'll want to stick with the product or service. Account managers typically work with a dedicated group of clients, helping in their goal achievement.
A good account manager should be able to pick up where sales left off and assist with customer retention and expansion. He/she acts as an advocate and trusted advisor for the customer.
An account manager usually has the following responsibilities:
To manage long-term customer relationship;
To find new sales opportunities;
To create strategies and action plans to meet customer's needs;
To track account metrics (e.g. income statements, cash flow analysis, and other).
You are wondering how to achieve good results? To understand your targets and measure your results the right strategic approach has to be implemented. A solid account management strategy will help you to identify organizational goals and transform them into activities with your clients.
Key Account Management as a strategic approach
Key Account Management (KAM), also known as strategic account management is a business discipline, which refers to the process of identifying key accounts, developing a mutually beneficial and reliable relationship with them. KAM is an approach that should be used to ensure the long-term development and retention of strategically important customers.
One common mistake of many organizations is to treat all their accounts with the same business model. But there is a critical difference in the account types. A well-known management rule applies in this case too: "80% of your profit will come from 20% of your strategic accounts". This means that automated systems and processes will be enough for 80% of your accounts, while you should focus on the rest 20%, which require a more personal touch.
Follow the simple steps below to ensure the efficiency of your KAM strategy and prevent any mistakes from the very beginning.
Basic steps to make your Key Account Management strategy work
1. Select the key accounts
If you know how to serve the different account types, you can maximize the potential of your sales force. All key accounts should have some strategic value. But it is essential to distinguish a strategic worth and financial worth accounts – they shouldn't be treated in the same way. So first, it is crucial to come up with a precise definition of what constitutes a key account. Then you have to make a clear distinction between large accounts and key accounts, between size and strategic value.
You can't choose just any of your clients as key accounts. You're going to spend a lot of time and company resources on them, so choose only the ones that can significantly benefit your company and deliver a large amount of revenue. The key account selection process might involve researching your client's current business plan, objectives, and overall financial health.
When researching your clients, pay close attention to those who are more likely to grow with you in the future or have been the most consistent and loyal. If you lose such an account, how difficult would it be to refill the gap? If it is almost impossible, or it may lead to significant losses, then this account should be considered as a key account.
Keep in mind that key accounts should be prioritized based on potential profit, as well.
2. Start small – expand later
If you are at the beginning of the KAM implementation strategy, you should consider starting small. Choose only a few accounts, to begin with. Each of the key accounts has specific needs and requires a customized approach. So, you have to be ready to create offers that are exclusive only for your key accounts.
Of course, creating customized packages takes more time and can be much more complicated compared to regular accounts. Therefore, taking too many accounts at the very beginning is a common mistake. Instead, you should concentrate on your offer and package quality, value, and invest effort in negotiations. To avoid being overwhelmed, serve your key accounts properly. Add more key accounts over time, rather than abandoning some of the existing ones.
3. Establish the right numbers
It may sound trite, but without the precise numbers, it's impossible to determine how good is your account management strategy. Keep all of your numbers, metrics, diagrams, and account plans at arm's length – they are crucial to KAM's success.
One of the most commonly used metrics in account management is sales volume. Other essential metric examples include turnaround time and satisfaction ratings. Use the tools that will help you to calculate these rates accurately.
4. Know your key accounts well
Every customer likes to feel that a company genuinely cares about him/her. If the company already does care enough, customers probably wouldn't want to sever the ties. But you need to stay alert – your competitors are still in the game.
To ensure long-term collaboration, an account manager should continue cultivating relationship once it has started. The key account management implies an ongoing process – it means continuous monitoring, serving, selling, among other things.
To maintain a friendly and trustful relationship, have regular contact with your key account customers. Meet up with them systematically – face-to-face meetings are very beneficial for collaboration. However, if it is not possible for some reason, you should at least have regular phone calls and collect customer feedback. In this way, you will always know what needs to be improved and where to move forward.
5. Don't sell – provide solutions
Pushing products on a key account is a poor approach. Use a personal, solution-based sale to win key accounts. Listen carefully to their problems or objectives and sell your solutions. Key accounts are likely to be the most highly-informed customers. Thus, an account manager should know some essential principles for selling to such customers, and this is why proper sales training is required.
There is a good statement of Tamara Schenk, Research Director for CSO Insight:
"A shared account strategy begins with the customer's goals and ends with how you can help to achieve these goals".
So, the basis of client and customer relationship in the key account management process is mutually beneficial cooperation and both-side goal achievement.
6. Continuously sharpen the saw
The competitors in your market will never stop attempting to win your KAM customers for their businesses. If your salespeople don't continuously improve on their craft, they risk losing their key account customers to the competitors. So, stay sharp, and constantly work on your strategy improvement.
The right long-term strategic account management requires the right coaching. Unlike the other sales coaching methods, account coaching should be solely targeted towards developing and maintaining relationships. It is also important to conduct competitor analysis regularly and follow the latest market tendencies.
Sales account management is one of the most competitive and cut-throat jobs any person can have and a key account manager knows that success is sales comes with continuous identifying, winning, and keeping key customer accounts. By consistently applying these KAM action steps, any person can increase the odds of not just landing, but also retaining more key customer accounts.
Cultivate long-term relationships with the portfolio of assigned clients and manage new, existing, and returning client accounts.
Try our Sales account management template.
It provides a good example of your process organization, which you can use as a basis for your KAM strategy.
How to use this template?
Create a new project and choose the Sales account management template to start. All Infolio templates include some demo content. Feel free to remove it once you've got the main idea.
Create the task for each account and group them by lists (e.g., "New", "Existing", "Returning", "Lost"). Don't hesitate to remove the example and add your lists with just a few clicks.
Group tasks by Status to track the sales pipeline (e.g., "Proposal sent", "Contacted", "Demo provided", "Won", "Payment issued", "Lost"). In this view, you can easily add new statuses to your workflow or rearrange existing ones. Update the status of any task by dragging and dropping it to the corresponding column.
Switch to the Table view, to add any additional information and see it at a glance. Use custom fields to specify the offer type, company's industry and rating, account representative contacts, address, and many more.
To see how responsibilities are distributed within your sales team, group the project by Assignee. In this view, you can reassign tasks quickly by dragging and dropping them between columns.
If you need any further help or if you have suggestions about how to improve
this template, don't hesitate to let us know!