The essence of creating a business plan for key accounts lies in knowing what is happening to the companies you do business with. Without knowing your market, you could be wasting your resources on businesses that don’t give you the returns your business needs to survive.
It’s easy to think that the big spending companies you supply don’t need management, or that smaller businesses can’t be helped. But with a carefully designed business plan for your key accounts you can increase orders and organise your own business far more effectively.
This key account management is essential in business. It helps you define who your customer is – crucial when developing your marketing and sales plan. Without a tight definition you could be spending vast sums on chasing business that wont deliver the results your company needs to survive.
Your key accounts aren’t necessarily your biggest accounts. There could be a gateway account that has consistently led to business with other companies. They could also be accounts that are in a growth period (and need a large volume of goods from you). There could be opportunities to create strategic partnerships with them.
By identifying these points you can create a better business relationship with your customers. One that is profitable to you, or increases your standing among the companies you want to conduct business with in the future.
There are 5 basic steps when setting up a key account business plan:
Step 1 – The long hard look
Identifying which of your accounts is key, rather than just big, is your first step. You will hopefully already have customer management software in place. This makes it easier for you to track the most profitable and strategic relationships. If you don’t have it, it’s time to find some.
Remember don’t just look for the ones that are big customers now – this could have been a blip, where one company needed your product/service for a short term project that may be coming to an end. Identify those companies that are growing, or shrinking and how their current situation may affect your business.
Step 2 – Objectives
Once identified, you need to draw up a set of realistic objectives. Base these on what you know is happening in that company. Are you going to sell x number of units to this company in the next 5 years? Or is the objective to create a stronger relationship with them? What are the problems they’re facing at the moment and how can you help them? You’ll find there are a wide range of objectives for each key account.
Step 3 – Make a key account business plan
You should only write the business plan when step 1 and 2 are fully fleshed out. Poor preplanning will lead to a bad business plan. Highlight your main objectives in the plan, as well as clearly stating why they are a key account.
Step 4 – Realise the plan
Without action the plan is nothing more than an exercise. You have to fully commit to your plan and see it through. If there are changes in the key account’s business, take a step back, re-assess your original plan to build in the new information.
Step 5 – How did it go?
Everyone in your sales team needs to be involved at every stage. The end stage is the one where you all gather together to review how successful implementing the plan has been, and to learn lessons from any mistakes.
As with any successful enterprise, creating a key account business plan takes time. But with proper planning it has a big potential to boost your sales.
Knowing who is your most profitable client, and understanding how to manage your relationship with them, is the main responsibility of a key account manager in Dubai, Riyadh or London.
In fact, the role of a Key Account Manager (or KAM) has become more important as companies spread their business dealings across the globe. The Financial Times defines the role of a Key Account Manager as: “The art of developing long-term relationships with selected customers.”
These selected customers are those that provide your business with the most income, or are strategically important to your company. So maintaining a good working relationship with them means you first have to identify who they are, and then you have to plan how maintain or develop your working relationship.
How to Identify Your Key Customers
You may think you know instinctively who your key accounts are. Yet it is possible that you are focusing on the larger companies you deal with, to the detriment of smaller ones.
Take a step back and look at your sales and where they are being generated. There is a particular rule in business that 80% of business comes from only 20% of your customers. Finding out who belongs in this 20% is essential for identifying your key accounts.
You also have to assess how much effort you put into bigger companies compared to the orders you receive from them.
Once you’ve found this set of customers it’s important to also look for the strategic ones. For example, do you have a small customer who is excellent at referring you to bigger companies? Is your signature product sold in a particularly important boutique?
Understanding the difference between the volume sales, and the strategic sales customer is crucial for the planning stage. When you know who is most important to your business you can begin the next step:
How to Maintain/Develop the Relationship
There are different approaches to planning a relationship with key customers, but the most important action is the actual planning itself. Managing a customer on the fly is highly inefficient and at one extreme may lead you to lose the customer completely. Firstly you need to sit back and create short term, medium term and long term plans for each of your key accounts.
Each of your customers has a very different set of company goals and market challenges. When you have identified these key accounts it’s essential you understand their particular circumstances and how your business can help them achieve them.
Put in place objectives for each customer. Initially you’ll need three: vision, relationship, and business. Your vision is to have an image of the best outcome from your dealings with a business. The relationship objective centres around building a strong relationship where you deliver on time, fix problems quickly, and are there for the customer if they need extra support. The business objective is the solid financial outcome of the business relationship. You want to have a clear (and achievable) sales forecast for this customer.
Although there may be just one KAM for each customer, the planning and implementation needs to be carried out on a wider level. If you want your plans for a key account in Dubai to work holistically with your other key accounts in Abu Dhabi and Jeddah, have a series of planned meetings to form a cohesive overall strategy for your business.
Key account management (KAM) is concerned with planning and managing the relationship with the customer but this is a means to an end if you have little business development to show for it. Key account managers are not just salesmen with good negotiation skills but apply clear strategy to select, develop and maintain their most important customers in order to profit from them. They need to constantly update their own skills and have a clear idea of company strategy, operations and marketing functions in order to build lasting relationships with their key accounts. Customers now have power over their suppliers and are looking for greater partnership, anticipation of their needs and customised solutions/resources to give them competitive advantage.
Even for a large company the number of key accounts should not become unmanageable (optimum 15 to 35) and the right accounts should be selected for inclusion. With high numbers of key accounts it is doubtful that you can successfully attend to them and failing to deliver can lead to them exercising their customer power and going elsewhere.
When selecting these key accounts bear in mind the following:-
If you have answered yes to most of these questions then clearly you are not spending vast amounts of time managing accounts that really are not profiting your company and don’t belong in the key account category.