World-Class Key Account Managers Capitalize on their Business Acumen
Many Key Account Managers focus on driving top-line sales. World-class KAMs stand out by delivering the financial results General Managers always have in mind: sales, margin, profit and ROI. They make informed decisions that deliver big-picture value and bolster the overall financial health of the organizations they work within.
How do they do it?
- Understand how your company makes money
To take it to the next level, develop an intimate understanding of the relationship between sales, costs and profit within your business. Work to deeply understand:
- The profit & loss (P&L) statement for your business and how each line item connects to and affects each other
- Key drivers that have the biggest impact on margins and profitability, like distribution expense, product costs, promotional costs
- The sales levers you can pull to optimize sales and profit, such as product mix, promotional efficiency, and price realization
- Understand how your customer makes money
Of course, you know that you can deliver value to your customer. But do you know exactly how your customer’s business actually works? World-class KAMs have a handle on exactly how their customer’s business model generates value. Take the time to fully understand:
- Your customer’s margins in relation to industry margins (in publicly-traded organizations)
- The relative importance of your customer’s business segments (divisions, lines of business, channels) to their sales and profit
- How your customer expects their stated business strategies to contribute to their financial performance
- The specific metrics that incentivize buyers and that shed light on the financial KPIs that matter most
- How your company’s business and related investments impact your customer’s P&L statement
- Plan and execute strategies and tactics that generate money to both
World-class KAMs know that the best way to appeal to demanding customers and stand out versus their competition is to demonstrate convincingly how their plan will make the customer more money. Period.
The key here is to leverage the knowledge of how your company and your customer make money to formulate strategies and tactics that effectively contribute to both.
The winning formula is pretty simple. The more deeply you understand the financial intricacies of your own business and your customer’s, the more money you can generate for both.