Key Account Strategy Means Better Sales and Better Customers
You will probably be very aware of who your key accounts are, but do you have a working strategy to maintain and develop them?
Let’s face it, in the sales world, not all customers are created equal.
While every customer matters and every client is important, some of them represent a significant slice of your income. These are the accounts with the most opportunities for long-term growth, profitability, and often strategic alignment.
Commonly, the kind of customer we just described is what we all call our ‘key accounts’, and you really should have a strategy that develops and maintains them, or you could easily miss opportunities or even lose them altogether.
What is a ‘key account’ strategy?
A key account strategy is all about managing and developing relationships with your most important clients. These key accounts are not just the high spenders, though. Turnover is important, but there are also customers whose long-term business can significantly influence your bottom line or perhaps have a strategic advantage, such as a foothold in a specific distribution channel. So, your criteria for what qualifies as a key account for you may vary, but the approach you take to maintaining them is likely to be basically the same.
At a fundamental level, a key account strategy is consultative. It is aimed at focusing on understanding the client’s long-term objectives and aligning your company’s capabilities to support those goals. If your sales team are simply focused on order taking, those goals are unlikely to be reached. Without a strategy for handling and developing those key accounts, you are clearly going to be vulnerable to missing opportunities.
Maximising business from your existing clients
One of the central aims of a key account strategy is to maximise the value of your existing client base. By focusing on key accounts, companies can unlock new opportunities through cross-selling, upselling, and collaborative planning. It stands to reason this will be a very profitable and easy path to tread. Instead of continually hunting for new business, you ensure you’re focused on the easier option of capitalising fully on relationships that are already in place.
Not only will sales potentially increase, but by embedding your company deeply within a client’s processes, offering viable solutions, and demonstrating ongoing value, you make it difficult for competitors to displace you. Strong relationships make switching suppliers costly and risky for the client.
So, as we established, good key account strategies will develop business goals and help you defend against competitors. However, they have another, often undervalued, effect. They create product champions within the business. These are stakeholders who believe in your product or service and advocate for you from within. In large, complex organisations where purchasing decisions are made collectively, the influence of a champion can help spread the good news about your product and influence decision making in many areas. If they move on to a new employer, they will take that with them and potentially open new doors for you.
The core elements of a key account strategy
As I mentioned earlier, your decision about what constitutes a key account will vary depending on your business needs. However, when you are developing your strategy for dealing with those customers, there are some areas you need to consider and some questions to ask.
- Are you engaging with the right stakeholders and decision makers?
In B2B environments, purchasing decisions are often influenced by a series of people. I sometimes see sales teams struggle with targets, where it turns out they have a great relationship with several people who are not always the final decision makers. Regardless of the size of the organisation, it is essential to map out all relevant decision-makers, influencers, users, and gatekeepers within it to fully understand the purchasing process.
- What are your goals and objectives?
We are looking for clear actions to appear as a result of your plan, and we can’t get to those unless we know what it is you are wanting to achieve. Do you want more sales (almost certainly), but what about strategic development, promoting specific services or products, multiple contracts, or a hundred other potential goals? Specific, measurable, and achievable goals will set the stage for a great key account strategy.
- Do you understand what drives the customer?
Effective key account management requires a deep understanding of what motivates your client (their drivers) and what challenges they face (their pain points). This involves ongoing dialogue and research. Where are their pain points, how can you solve them, and where does that cross with your own goals and objectives? Once you truly know the customer, you can integrate their needs into your key account strategy.
- Do you know where your strengths and weaknesses are?
This one can be a little painful, but it is necessary if you want to hold on to those key customers and develop them more. You need to be honest with yourself. The first step is to identify where you offer the client significant value, but also where competitors might outperform you. Now you can work on how to maintain and develop more of where you are excelling, and work to change things where you may still have a little way to go.
- Have a long-term plan
Short-term wins are important, but beware of losing sight of the big picture in the drive to hit your targets for the month. If you make the time to work on a key account strategy, it will soon start to contribute to and support your short term goals. The essence of good key account strategy is long-term relationship development, not short term objectives.
Turning strategy into action
Once you have a working understanding of all the above, you can produce solid actions. These actions will now be informed by your knowledge of what is and isn’t right for a key account as well as what is and isn’t possible to develop it further.
The implementation of your plan will likely involve
- Setting achievable targets: Break down long-term goals into regular objectives as milestones.
- Assigning ownership: Ensure that dedicated account managers are responsible for each key account, with clear
- accountability and performance metrics.
- Monitoring progress: Use key performance indicators (KPIs) to track success.
- Continuous improvement: Regularly review account plans and adjust based on client feedback, changes in market conditions, internal business developments, stakeholder rotation, and so on.
There is a lot more that could convert into specific actions. Remember, though, that without these actions, the key account strategy is just a theoretical plan. What your action points are and how detailed they are will depend on the outcome of your key account strategy, but always keep them realistic and achievable.
By understanding client needs, engaging the right stakeholders, and creating actionable plans, businesses can unlock sustained growth, reduce churn, and lock the competition out of those important customers.
A structured, clear, and reliable key account strategy is vital, but that last point about continuous improvement is one that you should never lose sight of. Train your sales teams to support and inform the plan, and always be ready to change it if you need to.
Sales, even to key accounts, can be a roller coaster at times, but if you remain flexible and review your plan regularly, it will serve your goals well.
