The Keys to B2B Key Account ManagementThe Keys to B2B Key Account Management https://boldandsharp.com/wp-content/uploads/2023/05/The-Keys-to-succesfull-Key-Account-Management.jpg 782 350 admin9696 admin9696 https://secure.gravatar.com/avatar/8b83dd9cffb078cab2c179ad988f64d9?s=96&d=mm&r=g
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Key account management is an organizational process used by B2B vendors. The name is self-explanatory: the point is to adopt a specific approach with your most strategic customers. Many KAM programs fail, are partially implemented, or dropped after a few months. Here are 5 mistakes to avoid if you want to fast forward your KAM initiative.
KAM is not another sales process.
While managing key accounts requires specific sales skills and implies the adoption of radically new sales techniques, the initiative is a change management process.
When involved in initial thinking about key account management or advanced projects that do not bear the expected results, the # 1 mistake we see is that the initiative is led by sales only to increase revenue. KAM is then limited to a bunch of existing customers where the name of the game is to expand. Big commissions are at stake. Most valuable sales players are on a mission to harvest the low hanging fruits.
While sales segmentation is a prerequisite of key account management, the goal is not to create a subset of your Tier 1 accounts with the highest and easiest revenue potential. Revenue is but one of the criteria to consider determine what a key account really means for your organization.
No vision for change.
One of the most surprising statements we have heard about KAM initiative is to “Improve our relationship with our most strategic customers”. Just like if people got the point about KAM not being a sales initiative and decided to move in the opposite direction. relationship … Seriously.
Unless you are in the not-for-profit business, let’s call a spade a spade: you may call the initiative “Better serve our customer” and strongly believe in customer centricity. No one is fooled though by the underlying reasons.
Selling more is one of the goals of a KAM initiative. It requires a fundamental shift in the way you do business and the contribution of all departments including presales, customer success, support, and implementation.
To be successful, it has first to introduced as a quest which purpose is transformation or survival. This quest has to be supported by hard numbers and facts about the consequences of not taking action. Not by the ambition of one of your executives trying to elbow his way up to the board by creating a shiny distinct sales organization.
Dreaming global without thinking local.
Once the quest has been introduced, the next mistake to avoid is a top-down decision, led by top management, and driven from HQ.
Top management has to be involved for sure. KAM is an organizational change that requires the C-Suite to show the way. So much so that C-level sponsors should be responsible for the key accounts where, depending on the journey, the challenges, the goals, or personal high-level connections within the accounts, they are most likely to add value. Being responsible means that part of their bonuses should depend on achieving the defined goals.
However, top management sponsorship is not enough to get buy-in. Local teams do not need to be consulted or informed: they need to be responsible for how the idea is going to be adapted to their remit or region. First to avoid a “We” versus “Us” that will backfire and kill the initiative. Second, because local teams’ knowledge and business acumen generate ideas and highlight risks that a one size fits all approach would miss.
Local teams should spearhead and boost the initiative, at least at the beginning. And for a change of such a magnitude, the beginning may last for years, till you reach the maturity and revenue that legitimate a dedicated KAM organization.
Missing change management fundamentals.
A successful Key Account or Global Account management program relies on change management big rocks:
- Adopting new systems: you may need new tools to target and crack the code of Key accounts. Consider upscaling your existing CRM to allow KAM contributors for various departments to plan, collaborate and review targets across several dimensions: internal divisions, customer entities, products, and services. ABM platforms do the job. A well-thought-out Excel or Google document may do the trick too.
- Revisiting your existing processes: from resource planning to executive engagement subtilities, Key accounts are different animals that require alignment and cross functional collaboration. A simple extension of your Tier 1 accounts best practices may suffice. However, namely for global accounts, commission planning, management hierarchy, pricing structure, approval thresholds and meeting cadence must be revisited and adjusted. Think about it as you were starting a brand-new business with a new GTM.
- Starting small: the first step is to agree on the list of accounts. Several criteria may be used: ICPs, account size, account potential, whitespace, global footprint, existing revenue, culture, technology, or ability to purchase centrally. You should not end up with more than 50 accounts and a segmentation that covers various maturity stages: selling for the first time, expansion, and retention. Test your approach with one account per individual, division or geography depending on the scope of your initiative and strike a balance in the type of accounts. Give yourself one to two quarters before expediting everyone.
- Measuring what matters: top line revenue matters. Yet, considering the amount of resources usually dedicated to key accounts, the cost to serve is most relevant. The ultimate metric is therefore customer lifetime value. Other tactical metrics such as top executive engagement or participation to tailor made events like “innovation days” should be monitored to gauge the traction generated by your sales efforts. See Bold & Sharp Sales KPIs for further information. Best practices include a quarterly review of progress, KPIs and the list of accounts : first in forever in does not work.
Wrong people, wrong skills.
Ego is the # 1 hurdle when implementing a KAM initiative. Rookie mistake: you steal the most valuable accounts from your local sales organizations or geographies. Worst case, you steal the most valuable players too. In both cases, people not being part of the journey feel left away. To reinforce the point mentioned in the previous section, aim at minimal impact on local teams, involve them as change agents, include them in a matrix organization. And never compromise on compensation and double booking.
When building your team, complex selling and comfort with power are two obvious skills to assess. However, not every sales superstar will thrive in key accounts. Until KAM become a dedicated and distinct organization – which few companies can afford – management by influence is a must. So are problem solving, vision, collaboration, and orchestration.
Apart from seasoned sales executives, presales, technical account managers, customer success managers, or project managers can thrive in key accounts. Not all of them and not every kind of Key Account. Make sure first that they display the right skills in terms of business acumen and assertiveness. Becoming a trusted advisor does not mean you need to solve every problem and focus on relationship building. Probe their skills on low-risk customers and let them learn from the team. You will know when the first major issue arise if they are up to the task.
Key account is a journey that takes a village, not a decision that should be confined to the sales team. If you are experiencing paralysis by analysis before launching the program, or if you have launched the program but are not getting the expected results, let us know: we are here to help.
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