For years now, we’ve been hearing that successful account management happens enterprise-wide, and that it’s no longer just a job for sales. But if that’s so, why are more than 80% of sales organizations constantly having to scrap and rebuild their key account initiatives?
Simply put, it’s because account management is not yet truly enterprise-wide at most organizations. And so, most key account managers (KAMs) are still working in the business instead of on the business. That means that most organizations are still making at least one of the following five mistakes:
Mistake #1: Focusing on historical revenue/spend. It might seem logical to reserve key account status for the customers who spend the most. But, as every ad for mutual funds tells us, past performance is no guarantee of future results. In fact, awarding key account status to big spenders is actually negatively correlated with growth. According to reporting from Gartner, organizations using current spending as their top metric are 51% less likely to see an increase in customer spend. A better approach? Look not just at historical revenue/spend, but also the customer’s willingness to partner, as it’s one of the best predictors of account growth potential. You’ll know these customers by their willingness to integrate parts of their business, as well as their readiness to dedicate permanent multi-disciplinary teams, share sensitive data and jointly fund new initiatives.
Mistake #2: Believing it’s all about the relationship. Still think the golf course is the best place to grow a key account? Think again. Research shows that an overreliance on long-term relationships actually correlates with a decrease in customer revenue/spend. The smarter play is to be an ongoing source of insights that are valuable to your customer’s long-term strategic planning. That approach, says Gartner, boosts the likelihood of increased customer revenue/spending by 420%. But it requires action throughout your organization, which brings us to the next common mistake.
Mistake #3: Not training or planning for better cross-functional collaboration. In today’s market, the responsibility for building strategic partnerships lies with everyone in the organization. If you’re still relying on one-off interactions between KAMs and their internal cross-functional colleagues, your customer retention will suffer. According to SAMA (Strategic Account Management Association), “one’s ability to mobilize internal resources” is one of the most important competencies for a KAM. But only 15% of KAMs use defined processes to take advantage of those resources. The other 85% stay in their comfy silos, relying solely on established internal relationships. Gartner’s study of 372 KAMs/organizations shows the power of company-wide best practices in collaboration: Organizations with that discipline increased customer spend by an average of 215%.
Mistake #4: Failing to capture today’s data for tomorrow. Key account managers are no longer just salespeople. Today, the best KAM is something of a data scientist too. You might not be able to use all the data your organization is generating right now. But failing to capture it for future use is a huge miss. Start by identifying the kind of data you’ll need to make more profitable account decisions in the future.
Mistake #5: Doing account planning just once a year. Believe it or not, some organizations don’t ask their KAMs to build strategic account plans more than once a year. Others don’t require it at all. Make sure your account managers have formal customer plans, including the customer’s business model, strategic priorities and an analysis of the trends impacting each customer’s business and industry. The plan should also include the customer’s complete organizational structure, identifying who the stakeholders are and how they make their buying decisions.
As you read this, your key account teams are likely in the middle of finalizing their strategic priorities and account plan initiatives. Here are some next steps you and your teams can take right now:
Next step #1. Reflect on the Top 5 account management mistakes and decide what, if anything, your organization needs to do to up its game.
Next step #2. Resist the temptation to prioritize your customers on the basis of current revenue/spend. Becoming a key account is a decision for both you and your customer. Focus on the ones who need the value you can bring, and who will therefore share your desire to grow the business.
Next step #3. Make sure your KAMs have earned their place at the customer’s strategic table. They don’t have to put their golf clubs away, but they do have to demonstrate that they’re bringing insight and value to every conversation.
Next step #4. Are your KAMs still happily working away in their silos? If so, you need to establish the right people, processes and protocols to make sure effective collaboration is happening right across the enterprise.
Next step #5. Now is the time to refine your data strategy so that you and your KAMs are gathering the strongest possible insights. Make sure everyone uses technology to bring more collaboration to your customer partnerships. Without question, this is the route to superior business results in the future.
Next step #6. Make account management an ongoing concern, and not something that gets reviewed just once a year. Establish strategic rigour, and constantly measure the impact of your customer planning process.
Your key account designation is much too valuable to waste on customers who can’t or won’t return the investment. By avoiding the most common mistakes in account planning, you can use an approach that’s truly enterprise-wide, delivering maximum strategic benefit to you and your customers alike.
For more insights on the sales skills required to succeed in today’s never normal environment, contact us at firstname.lastname@example.org.
About the Author
Sean Verhoeven has over 25 years’ experience as a corporate facilitator and public speaker. He leads HORN’s facilitation team and ensures that all of HORN’s facilitators hold themselves and their learners accountable in the learning environment. Sean is well known as an energized, dynamic trainer who infuses passion, authenticity, knowledge, and his own professional and personal experience into every delivery.
Sean leverages his prior real-world experience in Marketing, Sales and Sales Management with well-known brands such as Carling-O’Keefe Breweries, Molson Breweries, and Warner Lambert. He has extensive experience in every major industry vertical and has trained sales and leadership teams across North America, Europe, Asia Pacific, and the Middle East.
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