Key account management

As a business leader responsible for 8 figure revenues with a significant proportion coming from some major accounts it was critical for me to ensure we could always grow revenues.

Key to achieving growth, even in a challenging economic climate, is to remember that winning new customers is usually significantly more expensive (some studies suggest ten times more expensive) than growing existing accounts.  In this article I set out three approaches I have found useful in helping me lead the business to growing revenues by growing existing major accounts.

Growing revenues with existing customers

Through effective relationship management

Do you want to grow revenues – whatever the economic climate?

In most circumstances the easiest way to grow revenues is by increasing your share of spend with existing customers. That's especially true in tough times when they may look to reduce the number of suppliers because volumes are down or simply in order to get a better price. A rough rule of thumb is that it costs ten times more to get incremental revenues from new customers as it does with existing customers. But how?

Here are three approaches I learnt as Chief Executive to use in my reviews of key accounts.

Sell all products to all customers that use them

It sounds obvious but my experience is that it is rare for every customer buy every product they could from you, even if they are a very happy customer.  Indeed my experience is that it is often the case that customer A sees you as a supplier of X and doesn't buy any Y from you and customer B sees you as a supplier of Y and doesn't buy any X from you.   Send out a newsletter, or better still contact them personally to confirm they are happy with your product/service offering X and then to see if they would be interesting in trying your offering Y which they need but haven’t historically purchased from you.

Enable and ensure all sales people are selling all products to all prospects

Sometimes a similar limitation is true of sales people too.  They become confident selling one product so tend to focus on it and don't always promote the rest of the range quite as well. To manage this ensure your sales people are trained on all product ranges and then target your sales people with completing a grid of product range by customer. Their goal is to ensure every customer is buying every product range they use from you!

Invest time in the right way with the right relationships within your key accounts

Making sure you know who has what authority and the state of your relationship with them enables you to invest time in the right relationships

Do you really know your allies and enemies in the account?  Do you know who makes decisions, who influences and who doesn’t?  You should – and here’s a tool for clarifying your action plans!

Use a legendary 2 x 2 matrix like the one opposite to plot out all your contacts at a key account. Score and plot each person on the matrix as follows:

Then take action according to their position on the grid as follows, in increasing order of importance.

Bottom left – No problem

As long as you are right about their limited influence, you should be able to ignore these people. Just be careful to be sure about your analysis. Remember organisation charts only show the formal relationships in the business!

Bottom right – Useful friends

These people may not be important in the decision themselves, but can be useful sources of information and intelligence. Work with them and solicit their advice and assistance in winning the work.

Top right – Business winners

These people are key. Keep them on your side by giving them what they need to win the debate on your behalf.

Top left – Business losers

This is where you need to focus your attention and skills. As decision makers not on your side, to win business you have to either get them on board with your case somehow, or minimise their involvement in the decision somehow.