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• 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?
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agreed within your organisation as a result of completely different factors.
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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.
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