Key account management focuses your business on customers who represent significant volume. Use sales forecast software, and input from your sales team or global or national sales group, to build your sales action plan.
Do you practice key account management strategies in your business? Do you know what key account strategies are; and why, when, who and how you should you manage them?
Sales forecast software can help build your strategy
Managing your sales team or national sales group to focus your business on those accounts that represent a large percentage of your overall sales volume will help you to grow your key accounts.
And that focus will help you deliver strong products and services focused on marketplace needs.
Effective account management can help your business succeed.
For example, if your business sells to a customer who buys 10% of your volume that account is likely key to your business. If that customer only buys 1% or less of your volume they are still important to your business but that customer is not a key account.
Managing your key accounts is a significant opportunity to improve your business results.
If your business has customers who individually represent a significant sales volume, then you have key accounts.
Key account management focuses on the overall value the customer or account brings: it is important to note that it is not only sales volume and profit that is important, but the long-term volume and relationship growth potential, the geographical closeness (if your customer is your next door neighbor it is easier to build a strong relationship), the simplicity, or complexity, of providing a service, and more.
Not all customers are equal ... in the volume that they buy from you and/or the profitability that they bring. Key accounts have a good deal of power in any relationship with their suppliers. It is up to you to manage that power, and build a relationship that is more of a partnership.
When you build your strategic plan checklist and your sales plan, you will need to include key account strategies.
Use sales forecast software, and input from your key account managers and sales representatives (and global or national sales group, if applicable), to build an effective sales strategy and an effective account management program.
Also consider modeling a sample sales plan through your sales forecast software - it will help you see the strengths and weaknesses of your sales and customer mix.
Build a sales plan and/or sales forecast that includes a worst case scenario: the loss of one or more of your key accounts. How will your business survive? Developing a scenario plan and a scenario analysis will help you address that outcome.
It is difficult to replace a key account on short notice (I know this from personal experience). But it is not impossible. However, it is better to focus your sales strategies and sales plan on building strong key account programs and on building strong exit barriers (customers will stay with you for a long time if you build the right program).
Let me state the obvious: it is better to keep your key accounts and grow them, then it is to lose them.
The value, other than the tangible price value, for your customer will be in receiving and benefiting from a very customized, service-oriented offering.
Bad customer service, or even average customer service, is simply unacceptable for any and all of your accounts.
The business to business selling environment is different from the business to consumer selling environment. It requires even more flexibility and agility; that requirement is magnified in a key account program.
Meeting your key customers' needs is a driving force for your business. Remember to build exit barriers so that your key accounts find it hard to leave.
Effective account management programs often are developed to improve efficiency; for example, improved sales efficiency (which might even encourage sales outsourcing for account managers), focused processes, improved communication, optimized order scheduling and inventory management, and a detailed sales plan (that might even include a global account management program or a national sales group focus - there are efficiencies to be gained in this type of relationship).
The challenge for business owners is not to 'give back' those efficiencies in price reductions. Is the goal of key account management only to keep the account or is it to earn a reasonable profit from the account?
Many businesses are afraid of the key account relationship; they fear the 'big stick' that the key account wields. But if you build a strong key account management program that benefits both your customer and your business, there will be nothing to fear; your key account will not want to leave (and take his/her business) because s/he will lose too much perceived, and real, value.
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Successful selling experiences require using more than one technique.
Yes, face-to-face selling (particularly through relationship building) is often one of the more successful tactics.
But other techniques and strategies include building touch points and sharing information.
In other words, educating your customer or prospect on your products and services and also providing information that will help your customer in their business; making sure that your products or services are highly differentiated from competitors' offerings and communicating that differentiation effectively; and clearly understanding what your customers need in terms of value and delivering it.
Communicate with your customers and prospects in person; over the phone; through the mail (yes, letters, cards, coupons and order forms have high response rates if well designed and well executed); over the Internet through blogs, emails, social media, webinars, and your website; through print materials such as catalogues, coupon books, brochures, business cards, flyers and more.
Build your sales approach as a campaign:
Plan to make contact on a regular and frequent basis (not too frequently to the point of irritating customers or too infrequently to the point of being forgotten) and align your campaign with a strong identity program that is consistent with your brand.
Customer loyalty is built by giving value first in all aspects of your business. As a small business owner or manager, you need to commit to offering the best products and/or services.
Ensure that you regularly ask your customers for input and feedback (and both listen to it and act on it) to continuously improve your processes.
Your customers will respond to the value that you add, not only to the solution you propose but also to the relationship you build together.
What do customers want? Market research says that customers have an expectation of good quality, good price and good service; that is the minimum requirement for doing business today.
What more do you need to provide?
Knowledge. Reliability. Consistency. Communication. Discover what your customers value, and provide it.
Note: customers have unique and individual needs; they do not all value the same things. Make sure you clearly understand what each individual customer or market segment wants or needs.
In a business to business selling environment, it used to be that it would take between seven or eight touches to make a sale (or not, since not all contact means that a prospect will buy).
In this Internet age, it takes more touches.
Why? Because we have become both 'ad blind' and somewhat 'insensitive' to touches.
What this means to the small business owner is that your communication (and touches) need to be different from others (not imitations or copies of what everyone else is doing), it needs to be believable and sincere, and it needs to be memorable.
In a business to business sales environment, the selling cycle takes longer to close (and is often more complex) than ever before.
To effectively grow your sales, you need build a plan that will help you to optimize your efforts.
Focus your planning efforts on a lean sales process that: will solve your customer's problem or challenge; has value (i.e. reduces time and/or cost); provides not only what the customer wants but more than has been identified (over-delivering); and that provides a solution that offers convenience, high quality, a price that is acceptable, competitive and covers the business' costs, and exceptional service.