Key Account Management

Key Account Management is a strategy to optimize the revenues and growth from Key Accounts. Key Accounts are a B2B’s most strategic, valuable and long-term clients. They are typically large, global entities with multiple buying units, functions, and verticals.
While dealing with Key Accounts, both the supplier and buying organisations form partnerships of mutual benefit and collaboration.Key Account Management is making your company customer-centric and committed to successful customer outcomes.
Key Account Management is a seemingly evolutionary phenomenon. Having a distinct strategy to address the needs of Key Accounts is needed because of several factors:
* Key Accounts bring in the maximum share of the revenues.
* Key Accounts are becoming increasingly complex in terms of geographies, functions, verticals, etc. and have distinct challenges from other regular customers.
* Winning Key Accounts is expensive but upselling, and cross-selling potential is the highest with Key Accounts. Relationship is the key driver for growing business with Key Accounts. Building the relationship at a strategic level needs more than what standard sales strategies can deliver. This is where a specialized Key Account Management strategy is needed. Increasingly B2B ’s with enterprise level accounts are developing distinct methodologies and strategies for managing and growing their Key Accounts.
The Need for Key Account Management
Typically, large B2Bs who depend on Key Accounts for a significant part of their revenues need a robust Key Account Management strategy to ensure that they not only retain but also grow revenues with Key Accounts in the medium and long term. Winning Key Accounts is hard but keeping and growing them is even harder. Key Accounts expect vendors to not just offer solutions but to understand their business, goals, and industries. B2B’s are striving not just to deliver solutions but to create value for their most valuable Key Accounts.
Challenges in Key Account Management
Key Accounts are different from regular accounts. They need special skills and tools for optimal results. It is important to identify, track and build the right connections, join the dots across various data points and spot the opportunities for growth and value creation across the global sweep (geographical/functional/vertical) of the account. Not having a system in place to address Key Account complexities could lead to lost business revenue. The typical challenges are:
* Size and complexity: Since Key Accounts are large and complex organizations, a systematic approach is critical to manage, govern and grow them optimally. Manual processes or standard are not enough for this.
* Data management: Due to their complexity, a lot of data gets generated about the account and goes into functional silos. It becomes difficult to collate the data from across silos and then put the data points together to generate actionable insights if done manually or with software like CRM that is meant for other things.
* Over dependence on Key Account Managers: When one person becomes the face of the relationship, the organization begins to lose ownership, and the manager becomes the sole owner. This places a lot of vulnerability on the system. Sometimes losing the Account Manager may even mean losing the account itself.
* Lack of actionable intelligence: Data does not mean insight. To make sense of all the multiple data points generated in such a large and complex relationship is a challenge by itself. For account managers to mine the data and drive actionable insight is a challenge that needs specialized tools.
* Manually collating data: Annual account planning becomes extremely difficult when managers have to manually collate all the data from various sources, and there is no common platform where all stakeholders can interact and co-create the annual plan. This also leads to loss of accountability as well as difficulty in tracking performance over the year. Annual plans cease to function as living documents that guide actions and just become irrelevant documents.
* Leadership involvement: Getting leadership engaged with counterparts in the account is a difficult but critical aspect of Key Account Management. Leadership has different motivations and priorities and needs to be given the big picture as well as strategic actions. Their involvement in developing the Key Account Management strategy could be critical to big wins.
* Strategic relationship building: Thinking and making others think out of the box and securing support for these new ideas is needed.
* Lack of standard processes and enabling tools: Non-standardised ways of managing critical/core KAM processes can lead to communication gaps among stakeholders and loss of opportunities. Institutionalising the core KAM processes like analysis-planning-tracking-measuring, reviewing and governing of Key Accounts with a single-window solution builds knowledge and intelligence within the organization, plugs gaps, and reduces dependence on any particular individual performer.

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