Organizations that are keen on maximizing the value of their relationships with their most valuable prospects must incorporate a key account management strategy.
Key account management is a business strategy that aims to get the most out of the relationships between a company and its most important customers. By focusing on these key accounts, businesses can make more money, make their customers happier, and get an edge in the global market.
You are focusing on one big customer rather than running behind multiple customers. Customer retention is critical for key account management, where KAM focuses on building strong customer relationships, both digital and human touch. Digitally savvy accounts can be easily approached and served by using technology.
Difference between ABM and KAM
Using ABM to segment and narrow the accounts list helps emphasize key accounts to build the business’s trustworthiness and get maximum revenue.
ABM strives for new prospects and tries to expansion of market accessibility. However, KAM stresses existing customers and high-value accounts.
ABM and KAM go hand in hand in that ABM promotes a more sales- and customer satisfaction-focused, individualized approach, while KAM is clear about higher sales revenue from existing clientele.
ABM looks for contacts that react on LinkedIn, digital advertising, and online content, while KAM accounts those income-generating accounts from those customers.
Important Steps for Key Account Management
1) Understanding Customers:
The most important step is understanding your customers and their needs. Additionally, businesses must identify potential challenges before their clients and prepare themselves with appropriate solutions.
2) Identify profitability:
Business entities must understand the potential of each account. After analyzing each account’s profile, it must identify the high-profit accounts and approach them to generate more revenue for the company.
3) Build Relationships:
Key account management is based on the foundation of customer relationships. Understanding the client’s total share in the revenue and future business possibilities aids business entities in managing healthy relationships with consumers.
4) Choosing Key Accounts:
Once a business has built relationships with all of its customers, it needs to choose its most essential prospects. The list of crucial opportunities includes highly engaging potential clients from whom the business can get a large chunk of its revenue.
5) Planning for key accounts:
A business entity must consider all the stakeholders while targeting & mapping key accounts. Collaborative efforts between internal and external are necessary while planning to get business from key accounts.
6) Take action:
After planning, a business must take action on the execution of planned aspects. Action must follow the timelines established before creating an action plan. Prior actions must have a troubleshooting plan for any contingencies while approaching key accounts.
7) Resource Audit:
Keeping track of resources is necessary while conducting actions in key account management. Periodic review helps to revise the planning strategically and make specific changes as the situation evolves from the customers’ end.
8) Communicate to stakeholders:
Communication is essential while planning and revising the actions of a business entity. Communication with internal and external stakeholders is critical for management success.
9) Operations management:
KAM is a day-to-day working exercise. It determines the success in terms of maximizing the relationship with potential prospects. Operations ensure all key account queries are resolved and relationships are strengthened.
10) Monitor and control Key Accounts:
Post operational management, monitoring and controlling all key accounts for the company’s profitability is vital. Taking care of key accounts helps build relationships, retain customers, and ensure the business grows in the long run.
How Can You Maximize Customer Relationships Through KAM?
Management of customer accounts has always been about understanding what is required in managing something important. It is different today because each organization is different, but the rest remains constant. Businesses must be very clear about how the goals and objectives of key clients differ and what strategies they need to develop to meet those needs. Then companies require hard-core insights into a customer's business and market environment.
First, key account management means regular and frequent communication with the customer. This can include periodic meetings for status updates and opportunities to provide feedback. By keeping close contact with the customer, discrepancies present themselves and can be immediately dealt with, which helps in keeping the relationship fresh and productive.
Second, KAM is mainly structural. At the heart of effective KAM is mutual planning, limited to the most relevant executiveson both sides. This can very well involve entering into a joint venture in order to help each other, sharing information, resources, and power to share the experience, knowledge, and capabilities of both organizations.
Thirdly, your organizations must regularly evaluate the performance of their key accounts and make adjustments as needed. It can include re-assessing the customer’s current and future needs, adjusting pricing or services, and exploring new opportunities for growth and collaboration.
Finally, key account management requires a dedicated team of professionals skilled in customer relationship management, market analysis, and strategic planning. Your team should be led by a senior executive who is accountable for the success of the KAM and has the authority to make decisions and allocate resources as needed.