Have you ever wondered what it takes to be a key account manager?
Key account managers work with a company’s biggest (i.e., most important) customers to build long-term, strategic partnerships.
This role requires a range of skills from closing sales and nurturing relationships to strategic planning and cross-functional leadership. Whether you’re a sales rep looking for a new challenge or an account manager ready to take on bigger clients, read on to find out if you have what it takes to be a key account manager.
What does a key account manager do?
You’ve probably heard it before: 80% of your business comes from 20% of your customers.
While the breakdown may differ from company to company, the principle holds true. Some customer accounts are simply more valuable than others.
This handful of “key accounts” often comprise the majority of your total revenue. And losing one of those key accounts could have dire consequences for your business’s bottom line and long-term viability.
Because these customers represent such a significant portion of your business, it makes sense that you should invest in their long-term satisfaction and success with your company.
That’s where key account management (KAM) comes in.
A key account manager’s main role is to retain top customers and nurture those key relationships over time. Ideally, they become a strategic partner and advisor to the client, discovering new opportunities to work together for mutual benefit.
Key account management is a long-term strategy that can deliver significant value over time. When done well, key account management can be an even more profitable investment than new sales.
Key account management can drive more value than traditional sales for a few reasons:
- Existing customers are more likely to buy again and spend more than new customers.
- Retaining customers protects your revenue margins and helps you remain competitive.
- Key account management helps you understand your target customers better so your sales team can prospect and sell more effectively.
- Key account management builds trusted relationships with clients, leading to greater satisfaction. Happy customers share those experiences and recommend you to other potential customers.
Sounds good, right? But how exactly does key account management differ from regular account management?
Account manager vs. key account manager
Although there is overlap between the skills and responsibilities of traditional account managers and KAMs, the two roles are distinct.
Like KAMs, account managers (AMs) work on building the post-sales relationship with their customers. However, AMs are not specifically focused on key accounts (i.e., top-value customers). As such, KAMs have a more high-stakes, hands-on role with a longer-term perspective.
More importantly, key account management is ultimately a business strategy that represents an organizational shift rather than a sales tactic.
Whereas traditional account management treats every customer relationship approximately the same, key account management reorganizes the business’s teams and culture to develop different approaches to their biggest clients across the company.
Therefore, KAMs have a greater responsibility to manage both the customer and the customer’s interactions with other employees and departments to ensure a greater lifetime value for their customers.
Top 6 key account management skills
Key account managers have a big job. They not only need top-notch selling skills but also strong leadership, communication, and management chops.
Here are the top six skills a key account manager needs to succeed.
At the top of the list is communication. As the liaison for the customer and the rest of the company, the KAM has to excel at communicating in person, over the phone, via email, and across teams.
They must be comfortable addressing C-suite executives as well as coordinating operations managers and sales reps.
As noted earlier, key account management is a strategic program that encompasses the entire organization—not just sales. So the KAM will likely have contact with each level of the business to ensure the customer’s needs and expectations are properly met.
KAMs can streamline their communications by mapping out their key accounts in Lucidchart. Account maps outline organizational relationships and help sales reps and KAMs identify the right people to contact. Identify the fastest path to sale, share account updates, and track touchpoints all on one platform.
2. Company and customer expertise
One of the primary goals of key account management is to nurture strategic relationships with top accounts, so a KAM must possess an in-depth knowledge of the company and its customers. This expertise allows them to identify the best opportunities for growth and service to the client.
This expertise is particularly important because key accounts expect customized service. In other words, key customers typically don’t buy “off the shelf” products. Instead, the KAM needs to curate custom offerings tailored to the customer’s specific needs.
To do this, the KAM has to understand each part of the business and be able to communicate effectively to build bespoke offers.
When the KAM understands the account’s strategy, market position, budget, and goals, they can develop better offers that deliver greater value to both the client and the business.
3. Strategic perspective
One major distinction between traditional AMs and KAMs is the level of strategy involved in managing each account.
KAMs need to have a strategic perspective that goes beyond short-term gains. They must be able to juggle many moving parts and orchestrate deals and long-term plans that align with a mutually beneficial strategy.
This is one reason why your top salesperson may not be the best fit for key account management. While strong selling skills are important, key account management prioritizes the long-term relationship over short-term transactions.
KAMs are leaders. They must be adept at directing customers and managing employees at all levels of the business. Because KAMs touch so many parts of the business, they should be confident and command respect from both their clients and co-workers.
Additionally, the strategic nature of the role means the KAM acts as a visionary. Therefore, they will be expected to lead both customers and internal executives and managers on key initiatives.
5. Skilled negotiation
At the end of the day, the KAM’s goal is to build the lifetime value of their customer. In order to do this, they not only need to sell to the customer but also negotiate terms so both parties end up happy.
This requires a keen sense of timing, killer presentation skills, and the confidence to hold their ground and push back when necessary.
6. Value-based selling
Long-term success depends on being able to demonstrate value to the customer.
Companies are 25% more likely to be the primary suppliers of large accounts if they can sell on value. However, only 14% of sales executives believe their reps are effective at value selling.
As a KAM, you need to communicate the value of your offerings both strategically and financially to your customers.
This is where understanding the business also comes in handy. KAMs who can curate custom offerings can create more value for their key accounts, helping them to sell more effectively and retain long-term relationships.
Tools for success
With such a broad range of responsibilities and skills, KAMs need the right tools to stay organized and get the job done. Sales leadership should invest in the following tools for their key account managers.
CRM software: Communication is the foundation of relationships, so it is vital that you know what has been communicated, who was involved, and when. Use a robust CRM solution, such as Salesforce, to track each customer relationship and manage every touchpoint.
LinkedIn: LinkedIn is a great way to keep your finger on the pulse of the market. Use LinkedIn to monitor account markets for shifts and developments so you can always stay one step ahead of the competition. Consider adding LinkedIn Sales Navigator to target the right buyers and keep track of company changes.
Lucidchart: Lucidchart is a cloud-based diagramming solution that helps KAMs stay organized and streamline their communication. Use Lucidchart to create:
- Dashboards to track account KPIs and keep key customers updated on progress
- Shared success plans to outline the account goals and map out strategic actions
- Account maps to keep sales reps on the same page and identify key players and the fastest path to sale
Lucidchart integrates with Salesforce and other software like Google Docs and Microsoft Word, making it easy to visualize data and relationships and share your insights with team members and customers.
Key account management is a powerful organizational strategy and can have big dividends for those companies willing to invest in the right managers and infrastructure.
Do you have what it takes?