Chief sales officers (CSOs) rarely get the outsized returns they want from key accounts, so account growth remains one of their top priorities in 2020. The imperative for CSOs is to confirm what kinds of customers constitute key accounts, what the objectives are for those accounts and how to maximize the value of those relationships.
Gartner research shows that three-quarters of sales leaders expect their key accounts to outperform the rest of the business, but 84% of those same leaders report that they have completely rebuilt their key account program at least once in the past seven years due to underperformance. And more than 40% of those started over at least two or more times in that same seven-year period.
That’s a huge amount of organizational capital expended — with very little to show for it
Read more: Gartner Top CSO Priorities for 2020
Focus on organizational design, not individuals
Companies typically look to the key account managers (KAMs) as the critical success factor. However, in-depth research into key account success — including an analysis of more than 300 KAMs with at least national responsibility for no more than three accounts each — reveals that it is far less about individuals and far more about the organizational design of the program itself.
Although individual KAM skills and attributes still matter for key account performance, sales leaders must focus more on the specific organizational and customer attributes that can significantly ensure or derail the performance of even the world’s best KAMs.
On the supplier side, two factors in particular stand out as crucial for success: Widespread organizational support and understanding of key account objectives, and high-quality, real-time commercial information provided to the KAM. It’s also vital to pinpoint which accounts even qualify as “key.”
Ask the tough questions
Gartner research shows that only 28% of KAMs find review sessions hugely valuable or believe they lead directly to account growth. Ineffective review sessions result in stagnant growth, decreased retention potential or account attrition. To make review sessions more valuable and better ensure key account management success, ask these questions:
- Do we, as sales leaders, clearly understand what it means to be a key account? Focus on identifying the clients that qualify as key accounts, and know what criteria are used. Establish agreed-upon “value-add” services, personnel or resources to dedicate to a key account.
- Does the rest of our organization clearly understand what it means to be a key account? Ensure that everyone across the organization (geographies, business units and functions) understands and agrees on what qualifies an account as key, and the specific incremental resources, time and attention those accounts merit. Provide the support and information necessary to support that vision.
- Do our customers clearly understand what it means to be a key account? Make sure customers know the benefits of being a key account. It should do more than qualify them for a volume-based discount. Involve customers in designing and executing long-term cooperation that maximizes value to both you and your customers.