What is a key account management strategy?
A key account management (KAM) strategy is a plan that is designed to optimize the relationship between a company and its most valuable customers, also known as key accounts.
The purpose of a KAM strategy is to ensure that key accounts receive the highest level of service and support from the company, in order to maintain and grow the business that the key accounts provide.
Why do you need a key account management strategy?
There are several reasons why a company might want to implement a KAM strategy:
- Key accounts are typically the most valuable customers for a company, so it is important to keep them happy and satisfied.
- A KAM strategy can help a company to identify and prioritize its key accounts, and to allocate its resources accordingly.
- A KAM strategy can help a company to build stronger, more long-term relationships with its key accounts, which can lead to increased loyalty and repeat business.
- A KAM strategy can help a company to identify opportunities for cross-selling and upselling to its key accounts, which can help to increase revenue.
- A KAM strategy can help a company to proactively manage any issues or challenges that may arise with its key accounts, in order to minimize the risk of lost business.
It's not easy being strategic
These statistics might frighten you - they sure did me.
- 95% of employees do not understand their organisation's strategy
- 44% rank the implementation of strategy to company culture as the toughest challenge
- 60% of leaders think less than 20% of the workforce understands the company strategy and can explain it
- 37% say gaining support across the whole organisation is the toughest challenge to implementing a strategy
- 25% say one of the main reasons strategic initiatives succeed is the ability to manage change
- 45% say ensuring staff members take different actions or demonstrate different behaviours is the toughest implementation challenge
- 28% say one of the main reasons strategic initiatives succeed is being able to attract skilled personnel
Cracking the key account strategy code
Let me break it down what the numbers really mean.
- No-one except those at the top understands what your company's corporate strategy is or how to implement it.
- Successful strategy depends on change.
- Getting people to change is hard.
- Strategy depends on skilled and talented people to execute it (HINT: that's you!).
OK, so strategy is hard, not exactly breaking news
Now the way I see it, you're at an advantage, because you are not designing the organisational strategy. You already know what that is - or at least you can find out.
It's as simple as asking your boss.
While you're at it, ask them how it's being measured. It'll be things like:
- Customer retention
- Reduced costs
- Satisfaction (e.g. Net Promoter Score)
- Increased sales
What I'm about to share with you is basically strategy by numbers.
You're just aligning your goals, with your organisations and mapping those to your client activities.
For example, if your company's goal is to increase sales by 20% this year, then it's your goal too and it goes straight into your account management strategy.
Work smarter, not harder.
It's pretty easy when you think about it. And it represents a big career opportunity for you, but more on that later when we get into creating key account strategies.
From now on, think of yourself as an 'intrapreneur'
What is an intrapreneur? It's a term you're going to hear a lot about on this blog. It's someone who innovates, a disruptor and a risk taker. Someone that experiments and is motivated to change things for the better.
THAT's your new mindset.
Chirag Kulkarni, the chief executive officer of C&M Group, says:
Intrapreneurs are key drivers of growth in companies large and small and can serve as excellent managers and people worth developing to later pursue entrepreneurial ventures. If you are looking for individuals with corporate experience for your startup, intrapreneurs are the ones to hire because they understand corporate upheavals, but will still be driven and motivated to work towards growing your company.
Basically, align your key account strategy to your wider organizational strategy.
As a key account manager you need to:
- Identify your company's goals
- Understand the targets and how they are measured
- Translate organisational goals into activities with your clients.
- Decide what to do (and what not to do)
- Track your progress.
It's also the plan by which you'll get attention and recognition from senior stakeholders.
In fact, of the hundreds of account management best practices I could write about, this is the most important.
As we saw from the stats - the further down the food chain you are, the more disconnected you are from the corporate strategy. In fact, most leaders don't think anyone below middle management has a clue.
It can be very frustrating for a leader to be the only one on board the strategy train - they need help but often don't know how to mobilise their teams to get it.
Could this be you?
Your boss' boss starts cracking the whip and wants to know why your team aren't delivering results against the corporate strategy. Your colleagues come up with a bunch of excuses, mostly because they don't know how to make it happen or because they don't give a crap.
Or maybe they prefer to focus on what's wrong instead of how to fix things. It's all complaints about how this doesn't work or there's not enough staff, or why it's not their job.
And then you come along
You ask your boss about the company strategy and what her targets are. You prepare your own strategic account plan (you didn't have to, it's not like anyone else in your team did). You've got a couple of great ideas that support the wider business goals and already getting started on a couple of activities with your clients that should yield results.
You track your progress and share updates with your boss every couple of weeks or so (it's all good news).
You're making a difference to your clients because they are getting more value from your partnership. You are helping your company's vision become reality. You're helping the bottom line.
Suddenly your boss isn't the enemy - you're actually a team. You start getting recognition and attention for your hard work. You hit your targets. You get your bonus. Maybe you win an internal award.
"Hey, they just posted a job for a Senior Manager. You should go for it. I think you've got a real shot."
Let's turn that fairy tale into reality.
Key account strategy success factors
Now that you're convinced WHY you need an account management strategy, let's talk about how to create one. I'm adapting the Blue Ocean Strategy Four Actions Framework. It's a really effective and simple way to look at how to create new value.
By the way, I should mention at this point that an account management strategy is INTERNAL. Don't share it with your clients. The purpose is for alignment with wider organisational goals.
I've written at length about creating client-facing strategies so check those out if you want to know more about that process. There's a couple of strategic account plan templates included too.
What solutions do you have that you've never offered before to your client?
Use white space analysis to uncover unmet needs and new opportunities that aren't obvious. I love Zenkit for this. It's a free, powerful and flexible project management tool.
Here's a simple table I put together as an example.
- Add a column for every product or service. I've created 6 columns, one for each product
- Add a line for every client in your portfolio
- In each column, create a label for each product
And as if by magic you'll then have this colour-coded masterpiece:
Not bad for 5 minutes work. The reason I like this is it gives a quick representation of what products are selling and what aren't and where you need to focus.
Now, of course, you can do this on paper or in Excel (or maybe you are really lucky and have a CRM tool that does this for you), what I like about Zenkit is you can toggle between different views including
It's all very easy to transform your white space analysis into robust sales funnel management tool and more.
The stakes are high.
What can you do that will increase results above your benchmark performance. Quick wins can usually be found in the areas of:
Say goodbye to activities, product or services you can eliminate.
Are there features your client doesn't use or even need? Get rid of them. Especially if they are paying for them (sooner or later you'll be found out and you don't want to be accused of ripping them off).
Simplify - not everyone wants all the bells and whistles and you'll get further in delivering value if you rationalise your offer.
Seek out neglected problems or new opportunities to make a business impact. How can you create a new solution for old problems?
What strategies can you think of that will lower:
Finding ways to be more efficient and effective are great for engagement. If it removes hassle AND savings money you've got a winning strategy on your hands.
Create mutual value
When considering any of these actions for your account management strategy make sure you are creating internal (your organisation) and external (client) value. It MUST do both, or it doesn't belong in your plan.
- Is your strategy big picture? Look beyond today to the future
- Consider hurdles - what are obstacles are in your way now or might you encounter later?
- Identify the dependencies in your strategy and the order in which they need to be accomplished (e.g. strategy 1 must be finished before strategy 2 commences)
- Execution - ensure your strategy is fully realised with embedded processes - you don't want it to fall over the minute your back is turned.
- Aligned to create value for your clients and your company (and by association YOU)
Key account strategy action plan
- Sign up for free Zenkit account so you can create your whitespace analysis
- Create your whitespace analysis in Zenkit to understand product upsell opportunities
- Set up a 1-hour meeting with your boss to discuss her objectives, the wider business goals and ask for advice on how you can better support them.
- For each strategy, use the Blue Ocean Strategic Framework
- Define goals and create actions to achieve them. Assign a Blue Ocean category and confidence level for achieving them and a measurable KPI
- Setup 30-minute monthly update call/meeting with your boss. Don't read out verbatim. You only need to chat about the top three:
- Things you need help with
If for whatever reason your meeting doesn't happen, it's not the end of the world. Follow up with an email (or an email summary of what you discussed if you did have the meeting).
That way everyone's on the same page and your boss can forward around the business and let everyone know what a star you are. (I want you to get some recognition for that hard work).