In terms of the volume of goods they purchase from you or the profitability they bring to you, not all clients are created equal. Some of your clients are really important to your company. They might be your biggest client, your best-paying client, or your most important domestic (or foreign) account.
Do you use effective account management techniques in your company? If not, you really ought to. In sales connections between businesses, Key Account Management is utilised. Do you understand what important account strategies are, why you should manage them, and how?
Key account management concentrates your company’s efforts on those accounts that account for a sizable portion of any important business metric, including profitability, national account status, overall sales volume, sales of a particular product, and more. For instance, if a single customer represents 18% of your annual sales volume, that customer is probably a crucial one for your company. Even though a customer only contributes 1% or less to your overall volume, they are still vital to your company even though they are not a major account.
Key accounts wield a lot of influence over suppliers in any arrangement. It is up to you to control that power and create a partnership-style connection.
Key account strategies will need to be added while creating your sales plan. Be sure to include a worst-case scenario in the plan, such as losing one or more of your critical accounts, along with a strategy for dealing with the loss. Your ability to respond and take action—rather than just reacting—is essential to the longevity of your firm. Create a scenario strategy and analysis to assist you in dealing with a survival outcome.
It is difficult to replace a crucial account with little or no notice (I say this from personal experience). But it’s conceivable. However, concentrate your sales techniques and planning on creating robust key account programmes with high exit barriers rather than losing a key account and having to cope with the consequences (customers will stay with you for a long time if you build the right program). To put it bluntly: maintaining and growing your key accounts is preferable to losing one or more of your important accounts.
The overall value that a client or account provides is emphasised through key account management. It is crucial to understand that factors other than sales volume and profit, such as geographic proximity (it is simpler to develop a strong relationship with a customer who lives next door), the potential for long-term volume and relationship growth, and the ease or difficulty of providing a service, are all equally significant (and in some circumstances, one value will be more important than another).
Seven key strategies to incorporate into your sales programme:
Create a key account manager as the single point of contact for the account. Set aside internal personnel, such as a customer service agent, a shipper, a scheduler, an inventory manager, or whatever is necessary, to support the key account. These personnel should report to the key account manager.
Everyone uses and expects volume discounts, rebates, and other pricing incentives; they are the norm.
Create a scheme for priority ordering for your important accounts, such as limiting access to your online ordering platform.
Customize your product or service for the key account (for instance, by private labelling or by altering the product’s or service’s actual features).
A major account should match your sales relationship. For instance, your system should provide the same units of sale if the key account sells by the piece, carton, or another method (multiplied if necessary).
Create cross-business teams and initiatives, such as teams for product development, teams for quality improvement, teams for branding, etc., to enhance services.
Deliver integrated inventory, reorder points, delivery, fulfilment, and billing services.
The benefits your customer will gain from a key account programme are less tangible than the price value and include a highly tailored, service-supported product or service.
Key account programmes can also increase organisational efficiency. For instance, there are efficiencies to be gained in this relationship through improved sales efficiency, streamlined processes, focused communications, optimised order scheduling and inventory management, and a targeted sales plan (that may even include a global account management programme). The problem for business owners is to resist “giving back” such efficiency through price cuts. Key account management must aim to maintain the account while also generating a respectable profit from it.
Rather than in a more individualised business-to-consumer marketing environment, key account management tactics are applied in business-to-business selling. Your company must be driven by the urge to satisfy your main clients. Create effective exit barriers to make it difficult for your critical accounts to depart (for example, by integrating your inventory and reordering systems).
Many business owners are terrified of their major account relationships because of the power that the key account has. There is nothing to fear, though, because if you have a great key account management programme that works for both your customer and your company, your key account won’t want to leave (and take their business) because they would lose too much perceived and actual value.
