So what is a Key Account?
Think about your own organisation and what you class as a key account.
Here are the 7 most common types of classification:
• Are they just the big ones?
• Are they the ones you mustn’t lose?
• Are they the ones that offer future profit?
• Are they the ones you want your team to focus on – to look after the very best?
• Are they the ones where extra effort will bring extra returns?
• Are they the ones that demand more of you?
• Are they the ones that will take your business where you want it to go?
A ‘key account’ might be the result of any one or more of the above, or
agreed within your organisation as a result of completely different factors.
It is for your organisation to choose its own definition based upon the dynamics of your industry, your customers and your own business.
So how has your organisation gone about choosing its definition – it is not just a case of semantics – there should be some very serious thought behind the definition, because each can generate its own potential challenges.
|The Definition||The Potential Challenges|
The BIG ones
What about tomorrow’s oak trees?Do you always let the sales statistics make the decisions for you?
The ones you MUSTN’T LOSE
You’ll do anything to keep them happy, even if it kills you …
What if it’s unprofitable to please this particular whim of theirs?
The ones that offer FUTURE profit
Where does today’s profit come from?
What happens if they’ve been over-valued before they pay off?
The ones your staff FOCUS on
So what happens with the rest, do they just ignore them?
Why are your staff focussing on them anyway?
The ones where EXTRA EFFORT brings EXTRA RETURN
What does return mean?
How many accounts can you do this for – and at what cost to your business and your other customers?
The ones DEMANDING more
Every industry has its loud mouths – does that make them more important?
Just how profitable do their demands make them?
The ones that will take YOUR business where it wants to go
Could these be the best? Are you certain? The future is never clear.
Organisational plans change, yours included
Key Account Management is based firmly upon the 80/20 rule, as it is also known.
80% of any effort or expenditure gives 20% of the results
20% of any effort or expenditure gives 80% of the results
Key Accounts versus Sales
Applied to Key Accounts the 80/20 theory hits home – if we apply 20% of our organisational effort to just 20% of our customers (our Key Accounts) we will receive 80% of the organisational rewards.
However, we are not just talking of our 20% Key Account Customers in terms of their size, but in terms of their profitability and sustainability.
Therefore, a Key Account is also an investment in the future, and as we know all too well from recent stock market performance, past performance is no indicator of future performance.
This is where the biggest difference lies between selling and key account management.
A salesperson needs to live in the past, present, and future. They base their sales on the past requirements of their customers and present discussions with potential and new customers on their present and future needs. The majority of sales people are reactive to the needs of their customer, only being proactive when they need to cold call potential new customers.
The Key Account Manager lives in the present and the future, but in a completely different way.
They are constantly looking for emerging trends, whether they are emerging in the present or seem likely to emerge in the future.
They apply these emerging trends to the industry that they are in and to the industries that there customers are in, proactively.
And thus, position themselves as advisors to their customers and portfolio managers to their own organisations, managing a portfolio of customers who will provide a solid and sustainable return on investment.
What’s your definition of a key account?
Please write a comment below and let me know.
MTD Sales Training
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I remember being on the road with a salesperson whom I was coaching to take up a senior sales position within the company he was working for. His business had called me in to help him improve, as it seemed he had plateaued in his sales skills, and his boss was wondering what direction to take him next. Suffice to say that if he didn’t improve, the chances of him getting a senior role in this global organisation would recede fast.
Before we went on our first visit, I asked him what his goal was with this particular customer. Now, most salespeople see goals as specific to this visit or this occasion. So he answered in the way I expected, which was along the lines of, “To replace their current paper and disc system to a new on-line system that ‘his company’ had just introduced”.
Sounds like a good goal, doesn’t it? To achieve a particular sale with this prospect that would help them achieve better results. And who wouldn’t want to replace an outdated system with one much quicker, easier and better?
However, I told him it sounded more like an objective, and it was only looking at it from a one-dimensional perspective.
That is, he was approaching it from the angle of what he as the supplier was going to get out of it. There was nothing there that spoke of the prospect’s goals and objectives.
So on the journey, he came up with an alternative, which went something like, “To provide the client with improved results and speedier responses by replacing their current system with our new on-line system.”
I thought this was better as it commented on what the client would be getting out of it, i.e. improved results and speedier responses. But it was still not clear what the continuous relationship was aiming for. For example, if the client was not going to make the decision on this call, it would probably have been impossible to achieve the end goal.
So we redefined what the goal should look like by seeing it from the client’s perspective. We moved the focus away from what the salesperson would be doing to how the client would see the supplier from their perspective. It enabled the salesperson to identify the long-term view and established the relationship as the key component of any and every contact he would have with the client.
After a number of trials, we ended up with something like this:
“My goal is to be seen by the decision-makers in this division as the prime supplier that brought them improved results and speedier responses by replacing their current paper and disc process with an updatable on-line system”.
The difference was that this was looking at it from:
1) the client’s perspective, and
2) the end result backwards, rather than the journey to the end goal
Goals should be seen from many angles but the most important one in this situation was that he wanted the client to see him as a prospective supplier. And the only way he could do that was see the relationship as a long-term one where the viewpoint of productivity was inextricably linked to working with the salesperson’s company.
I continued my coaching with this salesperson for nearly five months and we heard later that he had been promoted to the senior role. His manager told me that one of the keys to his achieving the position was his ability to see the long-term value of business relationships, rather than trying to sell short-term solutions to every client.
I’d like to think that my discussion with him that day might have helped him on the long road to success.
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We often hear about how ‘relationships’ make or break the long-term partnership with a client, and it’s true that the connection that you keep with the client can play a vital part in determining whether you will keep getting repeat orders or not from your client.
But our studies have shown that there is one main component in a supplier/client relationship that can go a long way in developing future sales and encouraging that close relationship that can make or break the contact.
Many clients report that the main reason they leave a supplier of products or services is the tail-off of support or engagement after the sale has been completed. Typically, there is just one point of contact between the supplier and the buyer’s company, and if that relationship is not maintained efficiently enough, or one of the parties leaves or moves to another position, the relationship between the two companies quickly wanes.
This traditional bow-tie method of dealings between companies is typical because it offers a high degree of control and allows for consistency of approach in the dealings between the two companies.
However, the account management challenges caused by this one-point-of-contact approach can be far-ranging, They include:
This ‘bow-tie’ approach was developed by, among others, Peter Cheverton in his book ‘Global Account Management’ and it is still the favoured choice among many sales organisations, even though it proves itself to be the main cause of disharmony between supplier and client in today’s demanding environment.
Cheverton suggests a solution is a matrix-functional approach, known as the ‘diamond relationship’.
This increases the value that the supplier offers the client in many ways, including:
The overall benefits to both companies are manyfold.
This strategy for key account management will assist in all elements of contact between the two companies, and opens up opportunities that wouldn’t exist in traditional sales models. By incorporating the diamond approach, companies see opportunities expand, information becomes easier to obtain and partnerships develop at various levels of both organisations that wouldn’t have occurred using the bow-tie model.
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It is 6 to 7 times harder to convert a new customer than to sell to an existing one. This is exactly why Key Account Management is one of the most important aspects of the sales process and an integral facet of every single business.
Being a successful account manager means more than knowing your customers, being proactive and quickly responding to queries. While ultimately, your goal is to secure repeat orders, maximise revenue streams and keep your customers happy, there is a very fine line between a good account manager and a great account manager.
To ensure you are successful follow our top tips to successfully go above and beyond the standard.
All Customers Are Equal, Right?
Wrong. All of your customers are important, there is no doubting that. But not necessarily equal. You need to know who your key customers are and know your Pareto split. That is the 20% of your customer base that generates 80% of your business. Of course, you should be focusing more of your time on your most profitable customers.
You’re In The Know…
As an account manager for your company, you are the expert; you know your product or service better than anyone. It is essential that your customers view you as such, even as an extension of their operation. Being an account manager is not just solving customer issues; it is adding value at every available opportunity. Share your knowledge, impart your wisdom and educate your customer. Tell them about any new products that are coming soon, relevant business stats, what your other customers are doing not only will you be adding value but also raising your profile and setting their mind at rest when it comes to re-ordering from you.
If your customer is only buying a small amount of your entire product range, chances are, they are getting the rest from your competition. If you only sell 1 product, becoming sticky can be difficult unless you become more valuable to the customer than the £ they spend with you. Adding value where you can, becoming more than the product you sell will make replacing you as a supplier very tough.
Let’s digress for a moment. Imagine you had a great business idea. You set your heart on it and pour in blood, sweat and tears to start your own business. You work 70-hour weeks, seeing 10 customers a day and constantly talk about YOUR business, YOUR products. Be it developments, upcoming products or even key features, your business will be your baby. As an account manager, why should this be any different? You can build relationships with your customer, but do you ever really ‘talk business’? Don’t become another disposable cog in the customer machine. Simply talking business can set you apart from your competitors and your customers will respect you for it.
Guest Blog By Natalie Davies From Sales-i
Natalie Davies, part of the marketing team at sales-i – the leading business, sales and customer intelligence providers. With a background in international business, Natalie writes regularly for the sales-i blog, which is visited by thousands of readers on a monthly basis. Follow sales-i on Twitter for all the latest news: @sales_i
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Many salespeople and sales managers that I meet and work with are really excellent at their job. They accentuate the positive nature of what they do, and create reasons for clients to not only do business with them in the first place, but also remain loyal, even in the face of concerns and trouble.
What do they bring to the client that make them maintain this loyalty? How do they make business relationships work so well, they create advocates for themselves and profitability for their clients?
Here are ten ideas that I believe make business relationships work:
1) Both the supplier and the customer share common ideas, philosophies and business values. This creates a clear picture for both of them to paint and add colour to.
2) The customer views the supplier as a valued, trusted advisor and a strategic partner. This means the client sees you, not as a vendor of products but as a supplier of value.
3) Both parties see each other as contributing to each other’s success. There isn’t an ‘us and them’ mentality – they both thrive as business increases.
4) The client sees the supplier as an additional spoke in their business wheel. At no time is contact between them seen as an inconvenience.
5) The supplier asks the power questions that are needed for the client to think about their future business. Making the client concentrate on the future roles you are going to play in their business keeps the focus on value, not cost.
6) Both parties focus on positive results and establish measurements to ensure the route is clear. This means there is no focus on blame or lack of achievement – both realise the emphasis should be on outcomes and results, not blame.
7) The supplier keeps to the SLA at all times. Keeping commitments builds trust and this will lay the firm foundations for honesty and confidence in the future.
8 ) You prove yourself likeable, building confidence and belief as time goes on. This way, you recognise you are dealing with human beings and not automatons.
9) Both parties are willing to try new ideas and be creative. Everyone in the business relationship recognises there are more opportunities when you think out the box, so they share new ideas and concepts
10) You create value continuously, in the ways that the client can measure it. This means the emphasis is never on cost but always on how the client can increase their productivity, profits, promotions or products.
These aren’t the only ones, of course, but they give you a good idea of what the top quality salespeople work on continuously to create top value in their business relationships.
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As a sales person and business owner, you can be great at prospecting and setting appointments, and you can be great at closing the deal and delivering the desired results after the sale – but until you can turn your one-time clients into long-term customers you will not be able to build and grow your business the way you need to. Watch our short video on turning these valuable one-time purchasers into loyal, long-term clients for your company.
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Gavin Ingham once said “Most salespeople make a sale to a client and then move on to the next one. Most clients think that salespeople only ring them when they want to a) sell something new or b) renew their contracts.
If someone only rang you when they wanted to sell your something or get you to commit to a new contract what would you think about them? What feelings and emotions would you associate with them?”
It’s a good point and a very good question. When you want to nurture the relationship with a client, what should you be concentrating on? What areas should you spend most time on and what does the client expect? Here are some thoughts:
1. Build Trust: You need to be respectful and caring in a way that you deal with the client. This includes a) always being punctual with contacts (phone, email, face-to-face), b) being personal in all contacts (like sending them a hand-written note or giving them small gifts on special occasions) and c) being personal when the time is fitting (like sharing family anecdotes, etc)
2. Maintain Effective Contact: Always, always, always link up with the client on LinkedIn. It’s the best way to share articles, valuable information, ideas and concepts. When you come across an article, blog or web-page that you know your client would be interested in, it will take you 15 seconds to forward it onto them. And they will thank you for it.
3. Build a personal bond with them: Yes, business relationships are the most improtant area you should be concentrating on, but do not neglect the personal touch. We’re human beings, and we like to share things with people we like. If they like you, they are more likely to believe in you and trust you. So that personal touch is vital when you want to nurture the relationship.
4. Put them into Google Alerts: Putting a Google Alert aside for their company means you get their company news and blogs first. When you find out something interesting about their company, and you write to them to mention it, they will often thank you because they may not hae heard about it! You become a font of knowledge to them and they appreciate you thinking of them.
5. Listen out for important information: As you nurture the relationship, you’ll hear things that they wouldn’t tell other suppliers. So pay attention to all the things they talk about because, although it may sound trivial to you, the very fact they are mentioning it means it could be important to them.
6. Always deliver more than you promise: Your client ill expect you to deliver quality products and services, on time and at the right price. Those are ‘givens’. If you want to build relationships long-term, do more than is expected. let the client know that you really care. Show them your abilities stretch further than just being a service provider.
7. Show them how to make good business decisions: This means that you stop thinking of yourself as a sales person and start being a partner to their business. Coem up with ideas that others have used and succeeded in doing. Your experience with many other clients should help you share ideas that have worked for others. Even companies in different industries may benefit from an idea that a company you know have tried and succeeded with. So share how to make great business decisions, and they will thank you for it.
8. Respond Proactively: This might seem like an oxymoron, but if you can make all your responses to their needs as quickly as possible, you build the reputation for speed of response and quality of information. Plus, you start to anticipate problems before they occur and can come up with ideas and suggestions that they will appreciate, before they become big issues.
9. Give advice. Be proactive in what advice you give the client. They want knowledgeable, informed suppliers who can help them run their businesses in a successful way. Giving advice when you have the knowledge to do so will build solid foundations for long-term business relationships.
10. Get referrals the proper way: Most salespeople (if they ever do) will ask for referrals and hope to get extra business. The best way to get referrals id to introduce new prospects to your client’s business. That way, you are giving as well as asking to receive.
11. Nurture the business for their benefit: This makes it a win-win for both you and the client. When you do things that will benefit their business, they get the returns and you create more reasons why they should remain loyal to you.
12. Learn from every interaction: Do your contacts with the client build close relations, help the client to sell more, build their profits, cut their costs, reduce their overheads, improve turnover, and a plethora of other benefits? If so, learn how you actually accomplished those things. Then you apply them with other clients so they receive those benefits too.
These tips will help you develop your skills as a client-relationship manager and offer all your contacts the benefits of having you as a partner to their business.
MTD Sales Training
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Closing the sale is one thing. However successfully managing the account is yet another level of selling entirely. In particularly, when dealing with large, major or key accounts; after the sale management is where the actual selling begins. The following is a generic, but effective plan to help you better manage key accounts.
Consult & Advise
If you did your job well, then during the sales process you were able to elevate yourself to the level of an advisor, a trusted consultant to your client. If you did not achieve this or if due to your sales process it has not yet happened, now is the time. You have to continue to solve problems and provide advice. In addition to being an expert on your product, you are an industry expert and you need to show it.
Depending on the nature of your business, you may want to offer much of this advice at no charge to the client. If that is not possible, offer something. You have to establish ways to help the client without asking for payment.
Also, find at least two additional areas that you can help the client. If your services relate primarily to the help desk, for instance, then begin to look deeper into the IT department and begin to consult on other problems.
Care & Cultivate
Like any good harvest, the planting requires great care and cultivation. The same holds true when growing your relationship with an account. Keep in mind that to cultivate means to plant and invest without any immediate return. You have to plant, and then wait.
Invest time and effort into the account and let them know that you actually care. Ask yourself, when was the last time your clients heard from you when you were NOT selling something? Before you made the commission on the first sale, this prospect was the most important thing in your life. Now that they have become a client, who are they?
Map out an amount of time for each client to spend every week or month just making telephone calls or sending emails that do nothing but touch base. Don’t ask for anything, don’t suggest anything, don’t sell anything. Just ask how all is going and if YOU can help them. Offer some ideas, industry information, etc.
Sell & Service
With all of the above, you must continue to sell. I am not talking about selling new products however. I am talking about selling what you already sold. Continue to sell the value of the product or service the prospect already owns. This continued recommitment and belief in the first sale will open the door to second and third sales.
Often the sales person is well into pushing a second product before the client has actually benefited from the first. For the client, the jury is still out. Continue to sell what you sold.
Then service what you sold and what you have not sold. Help service the client on issues that go beyond your wares and beyond what they own. If there are competitive products, help the client with problems associated with that LESSER product or service.
When you do this, you will find that you will not have to ask for additional orders; the client will ask you and insist.
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