Why do B2B companies need to adopt Key Account Management (KAM)
Key Account Management is the most effective, profitable management of your most important assets. It drives the profitability of B2B companies, and having a Key Account Strategy is the heart of any successful business in this sector.
Smart suppliers are keen to implement KAM., Sadly however, many KAM implementations fail and are abandoned.
One should keep the following best practices in mind in order to succeed with their KAM strategy
Focus on customers that matter most
To get started with the KAM program, you need to identify some Key Accounts, and you need to develop a criteria that differentiates them from the rest of the customer base.
Good advice here is to start small. It is easier to add customers to your KAM program than it is to ‘demote’ customers once you have told them they are key accounts.
As per an HBR report, Corporations like Xerox keep the number of true key accounts below 100, and they have far greater resources than most and have been practicing KAM for years.
Therefore, your organization must have a clear understanding of what a Key Account means to you, and follow the same categorization criteria throughout. Do not add certain customers to your Key Account program just because they have been customers a long while, or they are golfing buddies with the CEO.
Key Accounts need not necessarily be the customers who are paying you the most.They are usually the customers with maximum potential to buy new and additional products or service in the future. The customers who are most likely to be consistent and loyal, and so represent significant value in the long term.
Relationship is the key
Another important aspect of Key Account Management is focused on building loyalty and long-term relationship with the customers.
As more B2B Organizations want to portray themselves strategically unique to their customers, they must ensure to maintain and approach their relationship with Key Accounts slightly differently too.
Key Account Management is all about relationship building and most importantly trust building between organization and customer, KAM wishes to see buyer considering seller as partner, and not as a vendor.
Look for opportunity
You should always be looking to grow your sales numbers out of your existing Key Accounts.
It’s far more profitable to sell more products to existing customers than to invest time and effort into finding new customers.
To make the most of the potential to cross-sell existing Key Accounts, you need a strong strategy to bring best practices to your Key Account Managers and salespeople. Additional product should be about providing customers with something that will benefit them. You might be disappointed if you push unrelated products.
Use the relationships you have already established with your clients to ask questions and find out about the issues they are encountering and look for ways to resolve those by making improvements to your existing products or develop new ones.
Key Account Management Business Impact
The correct adoption of Key Account Management by an organization can help in providing long lasting benefits. Following are some of them
Key Account Retention
Losing a client is never good, but losing a Key Account can put a dent in those revenue figures. Not to mention all the cost and effort added for acquiring a new client to make up for the loss of revenue. Key Account Management helps you identify and nurture your most important clients hence ensuring their retention.
Increased revenue
As explained earlier Key Account Management leads to increased revenue. By upselling you help increase customer retainer or subscription cost. By cross-selling you grow revenue from Key Accounts.
