I am sure you know the 80-20 Pareto Principle. 80% of your business comes from 20% of your customers and vice-versa. So, you are spending more time and energy in handling 80% of your customers who are just giving you 20% of your revenue. Does it make sense? Shouldn’t you be focusing on the top 20% customers and serving only them? These are valid questions that you need to ponder over.
But it may not be wise to quit the lower 80% market that gives you just 20% of your revenue and focus only on high value customers. Your next set of high value customers have to come from the next rung, say 60-80% level, of customers. You have to groom your customers. Growth is the only thing that will help you attain success in business. To achieve growth, you need to have growing customers with whom you can grow. Not just few customers who will demand high commitment for a huge top line and a poor bottom line.
#1: Key Account Definition
Each organization defines Key Account differently, but a definition is definitely essential. In simple words, these accounts should be the key to your growth and success. Without them, you will take a long time and effort to reach where you want to go. And these Key accounts should give you the credibility and should help you generate more business from their Industry.
#2: Key Account Identification
It is like picking stocks in a volatile stock market. If you are going to buy a stock after it has become a much talked about one, then you are probably not going to make much gains. Similarly, if you identify your key accounts after your competition has identified them, it is not going to help. You need to identify your key accounts much earlier. For this you need to understand the customers’ business, profitability, business issues, priorities, market share, growth projections, innovations, their industry growth projections, the people who are running the company etc. You need to be there before they call you.
#3: No. of Key Accounts
This is an important factor. You have defined and identified the Key Accounts. But now, how many of them do you want to handle as Key Accounts? Your leadership should take a call on this. This is because, when you have resources to manage only 100 Key Accounts you should not take up 200 Key Accounts to manage. You will not do justice and the purpose will be lost. Also, the most important thing to remember when you are deciding the number of Key Accounts that you want to handle is this: As the old adage goes, “don’t put all eggs in one basket”.
#4: Key Account Strategies
What strategies will you adopt once you have identified your Key Accounts? Create a process that you will follow once you are in. But have the courage to change course if that process doesn’t suit the customer. Some of the strategies, you can consider are:
- Partner with the client.
- Implement a Consultative Sales Methodology.
- Identify projects that would give maximum impact or return on investments [ROI].
- Be there early in the Buying Process. Better still, be there before they identify their needs.
- Educate the customer at regular intervals.
- Become an authentic source of information from your Industry for your client.
- Understand the business scenario and identify the pain points before the client does.
- Have a methodical approach. Don’t rush things.
- Map the entire Organizational Hierarchy. Identify the Decision Makers, Budget Holders, Influencers, Consultants, Users etc.
- Communication has to be of the top order.
- Commitment from your Top Management, at optimum intervals, is important to get the relationship going.
- Don’t be transaction oriented.
- Always look at the opportunities with these ideas – 1) That you can make a case study and implement similar projects in other client places in the same industry or 2) That you can identify some issues or repetitive tasks and make a product for this pain point.
- Focus on Customer Life Time Value [LTV] than just the top line.
- Meet all the Contacts at regular intervals.
- Develop friendship with all your Contacts.
- Provide them value in each interaction.
- Be interesting always.
- Be enthusiastic at all times.
- Be a Powerhouse of energy forever.
- Be a mobile university for your clients.
- Be the “Go to Guy” for all your contacts.
#5: Grooming and Growing your Key Accounts
- Make your Key Accounts look good [isn’t that Grooming] in front of their customers.
- Make your customers respond faster to their clients.
- Help your customers attend to their customers’ issues.
- Share ideas for improving your clients business.
- Get your customers to stand out from their competition.
- Be creative. Crack some of their pestering problems.
- Create new opportunities for your business.
- Don’t sell on price. Sell on value.
- Act and work like a partner. And not like a vendor.
- Invest your time, energy and resource to grow the account.
- Get to know their strategies, next moves, new products, innovations before the market gets to know them.
- Service, Sacrifice and Satisfaction are the routes to success.
- Be there before they need you.
- Be one of them.
- Laugh with them. Eat with them. Play with them. Whatever you do, build TRUST.
Key Account Management calls for focused efforts and specialised Sales Techniques. Providing value on a consistent basis is the key to success, in short.