9 Habits of Highly Successful Key Account Managers

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Habit 1: Select

Selecting high potential accounts is the first habit of the Highly Successful Key Account Managers. It is a decision as to where to focus the manager’s limited time and resources for maximum success?

Some customers are more important than others. Identifying those key accounts that offer the greatest potential for growth development requires a blend of customer analysis, market analysis and strategy planning.

For those companies that are strategically important to the company it makes sense to invest in developing the relationship. The payback is increased sales and profitability. However, not all accounts offer such a payback.

Key account management (if it is to be done right) is expensive and time consuming. The resources allocated to Key Account Management need to be spent wisely. They need to be invested in those accounts that are strategically important to the business, not just because of their size, but also their ability to deliver profitable and sustained growth.
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Let’s Run Some Numbers…

If an account manager manages 10 accounts and costs the company $200,000 (incl. salary, expenses and overhead allocation), then the cost per key account is $20,000.

At a net profit margin of 10% that would require additional sales within each account of $200,000 sales simply to pay from the account manager’s input.

For accounts generating $2 million in sales the requirement would be for growth in excess of 10% (if the additional Key Account Manager related costs are to be covered). It is important to remember that there are other costs associated with Key Account Management, including:

The costs associated with implementing the key account plan – ranging from client visits to product samples.
Other staff resources working with an account and their associated travel and subsistence expenses
The Key Account Management structure, including its leadership and support staff.

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On a day to day level Key Account Managers need to be selective in terms of the account-related opportunities to be pursued. BANT (budget, authority, need and timing) prequalification is as important as ever.

In selecting those accounts to target, Key Account Managers are increasingly conscious of focusing on those products and markets that are most amenable and indeed most attractive.

Many global organizations are increasingly focusing their KAM activity on ASIA-Pacific region, with particular focus on the growth of the Chinese, Indian and other markets.

In the words of one Key Account Manager ‘You have to cherry pick the products that you sell, or at least those that you lead with. It means focusing on the products that ‘can help our customers to compete’, as well as where the margin is’.

Next, let’s examine the 2nd habit: Identify.