Definition: What is Key Accout Management?
Key accounts are strategically important customers for companies with great matching business potential. They are not necessarily the customers with whom a company currently generates the largest sales revenues, but customers or potential customers with whom a company can develop well in the future.
Key account management is the process by which companies identify key accounts, develop relationships with these key accounts and tap into attractive business potential with them. To do this, key advantages of a strategic, partnership-based cooperation must be identified for the key accounts and developed together with these customers.
What does Key Account Management mean?
With Key Account Management you can develop your company strategically and generate sustainable growth in perspective. But be aware that key account management is not the quick sales channel. Building business relationships takes time. In resilient business relationships developed through key account management, you don’t just talk about supplies, prices and delivery terms, you talk about ways to support each other; you develop common strategic goals.
Think about how your business can grow with key accounts. You can further penetrate key accounts with existing products, you can expand into new regional markets and/or into new applications with your existing products through key accounts, or you can expand internationally with existing products. But you can also sell new products to your existing key accounts, and, this is the supreme discipline, you can also expand into new markets with key accounts with new products.
What are the tasks of a key account manager?
The essential task of a key account manager is to develop resilient business relationships with strategically attractive (target) customers with whom they can tap into great business potential for their company in the future and develop their company.
To do this, key account managers research the target customer segments relevant to their company and systematically identify their attractive key accounts (target customers).
In the next step, key account managers determine the strategic orientation of these key accounts in order to focus their own offers on them. The more account managers learn about their target customers, the more accurately they can address their current needs and challenges.
Then they research who is involved in the buying decision process at these companies. Usually, in larger companies, several parties are involved in the decision-making process. Key account managers identify these people and try to learn as much as possible about them. What is their position in the company? What are their attitudes? What interests do they have for the company and for the development of their own career in the company? How do they feel about the company the key account manager represents? Are they advocates, supporters or caretakers, or are they rather doubters or even preventers? What private interests do they have?
In his discussions, a good key account manager also tries to find out from which of his competitors the target customers are buying today and what advantages he himself can offer his target customers compared to his competitors. If necessary, the key account manager also works to develop the necessary skills within his own company. This development process is a task that concerns not only the sales department, but the entire company. After all, a key account manager focuses all marketing and sales communication precisely on these benefits and addresses the entire buying centre with its customers.
In the process, the key account manager seeks to move beyond the formality stage to obtain sampling and place a trial delivery, get listed and move into an ongoing supply relationship. Through the targeted development of personal relationships with the relevant people who are active in his key accounts, the key account manager steers the communication in the direction of “problem solving”. If this succeeds, in a further phase he tries to get into a partner role of the key account – the top result in key account management. If a key account manager looks after several significant key accounts with which he has achieved a partnership relationship on a strategic level, he is particularly valuable for his company.
Prerequisites for successful key account management
Key account management requires a special kind of strategic sales management. In order to be able to concentrate on his tasks of developing relationships with key accounts, key account managers depend on a structure in the sales organisation in which they are not overwhelmed with operational details. Provide enough qualified resources for this in your sales organisation.
They also need to be able to rely on strategic marketing and sales management.
Senior management needs to support key account management in building capabilities within the organisation in a targeted way that strengthens relationships with key accounts.
Developing target customers into buying key accounts is a long road that must be travelled systematically. This path is time-consuming. Give your key account management sufficient time to make these preliminary efforts.
Conclusion: This is why key account management is important
Key account management is important for companies so that they can develop strategically targeted with suitable, high-potential customers. Through key account management, companies not only identify such strategically attractive customers, but also successfully develop them for your company.