Not all accounts are "key." Criteria must be developed to decide which accounts fit within this category. In this video, learn more about developing criteria, including cross-functional input.
- Selecting key accounts from your list of all accounts may be the most difficult part of key account management. After all, every account is key, right? Wrong, the single biggest mistake is including too many accounts on your list. When that happens, no account gets what they need. In other words, it's better to limit rather than dilute. Now, it's tempting to say your key accounts are your biggest accounts in terms of revenue, but be careful, this can lead you down the wrong path and you'll end up overlooking accounts with much more potential for your company.
To select key accounts, you need to develop criteria. Now, a mistake, at this point is to develop too many criteria. Trust me, you don't need that many. Three or four is a good rule of thumb. The best starting point to develop key account criteria is to look at your company's strategic plan. Where is your company headed in terms of profitable growth? Are there new markets your company is trying to penetrate? Perhaps a new geography like Asia, or perhaps a new industry like health care? You see from that, you can tell which accounts are most likely to deliver on those goals in terms of growth and profit margin.
Quantitative criteria are important, but there are also qualitative factors you need to consider. For example, what accounts are the best fit for the range of products you offer? Where do you have the best relationships today, or perhaps where do you want to have the best relationships in the future? Which accounts best fit the culture of who you are? For example, if you're a company that values environmental issues, it might be inconsistent to focus on companies that are not environmentally conscious.
Perhaps the best and easiest criteria to consider is this, which account, if we were to lose it, would spell the biggest trouble for us? Which account could cause such a drop in revenue that we'd have to layoff employees, or perhaps even shut our doors? Which account, if we lost it, would signal to the marketplace that we've lost our mojo? Now, chances are, your gut instinct tells you who those accounts are, but it's still important to apply agreed upon criteria in a systematic way nonetheless.
Otherwise, you end up focusing too many resources where you don't need to focus them on, and that wastes great opportunities to nurture new and valuable key accounts for the future.
- Understanding key account management
- Understanding the key account management process
- Developing criteria for key account status
- Selecting key accounts
- Defining a vision, mission, and strategic focus
- Identifying the key account management task
- Communicating your strategy
- Hiring, training, and rewarding key account managers
- Developing a call plan for key accounts
- Measuring key account results