Anyone in business will tell you that it is easier and cheaper to sell more products and services to an existing client than it is to go out and find a new client.
Key Account Management
Key Account Management or “KAM” is all about focusing on your key existing clients – your very best customers. In theory, this is the perfect way to increase your profits and develop better relationships with your most valuable clients. If we apply the 80:20 rule then, in an average business, 80% of profits tend to be generated by the top 20% of the clients.
Develop a Strategy
Key accounts are the most valued customers of a business. A KAM strategy is a marketing and business development approach which focuses on taking special care of these customers. Each key account should have a business plan, dedicated resources (such as an account manager or single point of contact in your business) and should be identified throughout your business as being a strategically important relationship.
Select The Right Customers
The most important thing here is to select the right customers for investment. Many businesses tend to underestimate the importance of this step and often show a casual attitude when it comes to selecting the right clients to develop. Some firms simply select all their big clients. There is nothing wrong with that strategy; however, they often fail to consider the potential to grow those particular relationships. After all, just because a client is big doesn’t necessarily mean it is particularly profitable.
Consider Your Resources
In creating a KAM strategy, you should also consider resources. There is no point in creating a strategy to develop 60 key clients if you only have the resources to actively manage 10 key clients. These key client accounts will need to be managed in an active way and this will require time and effort. Ideally, you will want to create a specific business plan for each key client relationship and you will need to dedicate some financial and people resources in order to execute these business plans.
Execution is Key
Key account management, if executed well, can be a very effective marketing strategy in that it focuses your company’s business development and marketing resources on the targets where you are likely to make the biggest impact.
Business Consultancy Division at Morgan Reach has years of experience in developing and implementing successful Customer Relationship Management strategies for its clients from a wide range of sectors. If you need help in developing and implementing a successful Customer Relationship Management strategy to grow your business further, then please contact us now at info@morganreach.com.
