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Sales Tips: Which of Your Accounts Deserves to be Key?


To save my fingers from early onset of arthritis, let’s shorten the term from Key Account Management to KAM. I understand that it doesn’t sound great, but I need my fingers to blog with.

I often get asked to deliver Key Account Management training at Salestrong, and having done so for a number of organisations, I notice that companies have vastly different views on what KAM is. Some simply call their larger accounts, “Key Accounts”, whilst others have a well defined KAM program.

Such programs often result from an Organisational Change initiative involving systems and process changes, board level sponsorship, company wide communications and detailed metrics to measure success. Training is just one piece of that overall change initiative.

Despite this spectrum of views on KAM, one question that invariably comes out in KAM training sessions is the question of which of the accounts are actually the key accounts? The easy answer is to say that they are the accounts that are key to the business, usually based on revenue. But it’s not as simple as that, after all KAM differs from regular selling, or account management, because you’re choosing to invest proportionately more in these Key Accounts.

It could be that you’re investing more as a defensive move, to keep the account from falling prey to the competition, but most KAM programs channel increased investment into the accounts to get a better return in the long term than they otherwise would.

When choosing a key account, the seller must determine which accounts they want to grow over the long term. Can the account give the return required for the planned investment? This means that the seller needs to be crystal clear on the criteria being used to segment the key accounts from other accounts.

The question to be answered to determine segmentation is therefore, “What are the criteria by which an account can be identified as being key to the business and attractive enough to support long term investment?” The question of attractiveness, beyond simply revenue, is where I see most businesses struggle.

Here are some suggestions to get you started on finding the attractiveness of your accounts. Use these as a starting point to build your own list and then prioritize and weight the criteria you come up with:

* Stability of the business and the market they serve
* Opportunity for cross and up-selling
* Access to further and adjacent market opportunities
* Stable and regular order flow
* Aligned strategies and values
* Financially secure with good cash flow and payment terms
* East of doing business ­ people, systems and process
* Brand value association

In addition, and as any economics school student will tell you, the success of such a key relationship also depends on the other party. Will the customer also see the seller as key to their business and attractive enough to engage in such an interdependent way? So the customer also needs to ask the same question. What is an attractive supplier and how do we identify them?

Peter Cheverton in his fabulous book, Key Account Management proposes that Key Accounts should exist where customer and supplier achieve a level of mutual attractiveness. Another major insight from Cheverton is that a lot of businesses lack the ability to measure customer attractiveness, which means that they invest in accounts of low attractiveness, which do not then give the required return on investment.

This is a hard decision to make in any business. Sellers know immediately if an account is key to their business, that¹s the easy part, but is it attractive enough to invest in for growth? That latter question takes time, resource and insight to be able to answer well.

Simply becoming cognoscente of the fact that your customer is not as attractive as they could be allows you to put together a strategy on how to change that. What win/wins would there be if you could work better together? What a great way to open up a dialogue with your customer to create more business.

Conclusion: when defining which accounts are suitable for KAM, rather than simply saying it is the accounts key to a company, prioritize accounts where there is a mutual attraction between seller and supplier, to invest in working in a close, collaborative and mutually beneficial way, over the long term.
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Alistair McQuade is an engaging and passionate sales trainer and sales education program designer. He currently consults for many global brands on Sales Force Transformation at Salestrong.

  • Such a pity that I just came along with this article. I like the key points here and maybe this has a lot to do in deciding whether your sales are account-based or account-centric. What are your thoughts between the two, though? Is one better than the other? Or is it a “whatever floats your boat” decision? Thanks, Josh!