Key account managers are not traditional sales people, so their compensations need to be different, closely tied to their goals and key account management task. In this video, learn how to determine other ways to reward key account managers for their successes.
- Key account managers are not traditional salespeople, so their compensation and reward systems need to be different, otherwise you'll find yourself rewarding the wrong behaviors. Now, here's what I mean by that. Traditional salespeople typically earn a base salary plus a commission on sales generated by the account. Well, this approach works well because you want your salespeople focusing on the right activities to drive sales. But the long-term goal of a key account manager is customer retention, not sales.
You want the key account manager focusing on all the activities needed to keep the account forever. So, instead of paying them a commission on sales, it might make more sense to pay them a base salary, plus a year end bonus if the account continues to do business with your company. This approach will make sure the key account manager is focused on the right things as described in the key account management task. Let's dig a little deeper on that.
Recall that the key account management task addresses four questions. Who are we targeting within the account? What are we trying to achieve? How are going to achieve success? And finally, where will the manager get support for the initiatives? Therefore, you want to build your compensation and bonus program around achieving these critical activities. Now, keep in mind that the most successful key account leaders use a combination of extrinsic rewards like money as well as intrinsic rewards to motivate their managers.
Intrinsic rewards include giving managers autonomy and freedom to do their jobs, reminding them that they're providing critical support to their customers, as well as giving them a sense that the company is loyal to them. Key account managers do a lot of their work behind the scenes, out of the limelight, so it's important to find ways to recognize their achievements. Sometimes, the best motivation of all comes from customer feedback. It's very powerful, because it reminds the manager of the direct impact of his or her efforts.
So, here's a tip, the next time you have a meeting of your key account managers, invite a key customer to the event to say a few words about their manager and to personally thank them for the contributions they make. Hey, when a key customer advocates for their key account manager, that's a huge indication that things are going well. And that's what key account management is all about.
- 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