3 Reasons Your Business Must Have a Key Account Strategy
Author: Michael Rega
December 28th, 2020
Every leadership team wants their organization to create a sustainable growth engine, but that’s easier said than done. In a marketplace full of competing initiatives, how does a business sift through a sea of information to find proven strategies that will work for their specific growth goals? The answer is quite a simple concept, yet not so easy to implement. Start by focusing on one overlooked or underemployed strategy that will strengthen the fundamental aspects of any growth organization, a robust key account strategy.
Key Account Management (KAM) strategies concentrate on analyzing clients by working to maximize their partnership and engagement which leads to increased mutual revenue. It is the essence of an abundance mentality that should permeate best-in-class firms. This requires a comprehensive and deep understanding of what a client wants, their marketplace challenges, their competitive landscape, and how your combined efforts create real business value.
Although a key account strategy is not difficult to set up, it takes a lot of commitment and effort to reap the maximum benefits. So, why is it worth it? In more than 55 years of building and guiding clients in their KAM efforts, these are the three historically proven reasons it is crucial to have a key account strategy linked to the core of your growth initiatives.
What Exactly is a Key Account Management Strategy?
1. Maximize Growth Potential
Few companies realize how much upside potential revenue they are losing every fiscal year, even when their accounts show a profit. Maximizing growth takes a lot of research and time, but more than that, it takes team collaboration. Collaboration across professional service firms that may have complex or poorly designed incentive programs is a common pathology that leaves a lot of firms to plateau their client growth. For example, one of the most devastating comments we hear in KAM team launches is "my client". This myopic view destroys the concept, limits the ability to cross-sell services, and cheats the client out of the true synergy that a well-integrated service firm can deliver. Imagine a law firm that has multiple partners all specialized in a particular area of law that do not cross-pollinate their largest clients. Large clients need, and want to expand their engagement but often do not because the partner sees the relationship as "my client" and guards the relationship instead of expanding it.
By working to increase collaborative engagement, key account strategies ensure that an organization has a core and explore mentality towards its most important and lucrative client relationships. Done correctly, and consistently, KAM programs become the jet fuel for year over year growth, create deeply bonded client relationships, and become an amazing training ground for the next generation of professionals.
2. Innovation Driver
One of the most important and emerging areas within firms is their ability to innovate at scale. Brilliant ideas born in isolation and never expanded upon fill business school case studies on ways companies die. KAM programs, due to their deep partnership and trust qualities with clients, become the perfect idea incubator. This can be new products, new service lines, new software, new billing practices, etc. The list of innovative concepts goes on and on—but best to always launch them with your deep client relationships. The client gets to share in new ideas and see your firm as an innovation leader, and you get to expand your firm in a lower risk and trusting environment. Consider who in the technology sector is chosen to beta test before launch. In most cases, it is the deeply committed and brand loyal customers. This same concept should be woven into a proper KAM program to truly drive innovation and next-generation thinking.
3. Sustainable Organization
An organization that thrives through the dips and spikes in global economies for decades is extremely valuable. Sustainable organizations require innovation adaptation to an ever-changing client base while investing in the core business pillars. Think of these pillars like the majestic pillars of ancient Rome. They are strong, massive and made to last for generations. But neglected, pillars, like everything else, crumble. What are the core pillars of your business? For many, they are infrastructure, like machinery and technology—robotics in the automotive world. For most firms, people and their constant development is a major pillar. Possibly one of your pillars is brand awareness and enhancement. We feel strongly that a robust Key Account Management program should be one of these massive and well cared for business pillars. It is the stone that holds strong in up and down cycles for generations.
Since our firm's launch in 1958, we have been through multiple recessions and decades of booming growth. In 2021 it will be critical to evolve your Key Account Management strategy into an essential driver for your business to thrive, build enterprise equity, and enhance the lives of the people you serve.
The Ecliptic Consulting Group partners with global clients to design and maintain KAM strategies across the key sectors of life science, environmental science, technology, and built environment.