We all know the truism that it’s harder to find a customer than to keep one. What is much less understood is the difference between active customer account management and simply ‘looking after’ your customers. In a recent project where we were asked to help develop sales people into account managers we discovered they were leaving between 15% and 25% of potential business behind for either the customer to simply not place with anybody or for the competition to hoover up. These sales people were doing a good job in looking after customers and bringing business in, but not all the business that was available.
One of the first myths to refute when talking about Key Account Management is the old Hunter/Farmer paradigm – the idea that new business getting revolves around new customers and all that’s required with existing ones is to ‘farm’ them effectively. A tool we use that completely exposes this approach is based on Wallet Share Analysis. How do we establish the difference between what the customer is actually spending with us compared to what they are actually spending else where? Getting sales people to think in this way soon converts the need from farming to hunting within the account.
There is strong evidence that shows during difficult times buyers become more risk averse, preferring to stay with what they know. This makes winning new business from new customers harder. However, if the salesperson has a key account approach to their customers with the most potential for increased share of wallet, the potential for more sales to be achieved is significant.
The word potential is important. Key accounts are not just the biggest accounts; they should be the ones with the most potential. A large, low potential account requires very different management from a large, high potential account. As do the other two combinations. Consciously managing accounts by using effective planning tools and a good customer engagement process will yield many more business opportunities.
Now is the time to really understand your most important, high potential customers. These customers are looking to optimise their own performance and they are looking for supplier organisations who can really help them achieve their objectives.
If you feel your sales teams’ Key Account Management skills could be improved Structured Training’s Key Account Management course could be the answer. It might be the wisest thing you do today.