I had a customer tell me they wanted AT&T and Verizon to be their Key Accounts, yet the company was relatively small and had little to no current business with either. Does that make them key accounts?
We have talked about the idea that just because I say the customer is a key account doesn’t mean they are or even should be a key account.
Let’s breakdown Key Account Management into its simplest form: the management of a customer relationship that is most important to the business. Important in this case can be defined as profit, revenue, potential or even strategic. I think the word strategic gets abused sometimes; it’s the default answer when we can’t say the customer provides any of the first three.
I’ve heard the term key account over the past couple of weeks from clients and I asked, so why do you consider that customer a key account. The answer is always, “they’re a big customer of ours”, which is great, and you don’t want to lose a big customer. The next question was – do they know they’re a key account of yours? The answer is typically “no”.
The mistake most companies make is they don’t talk to the customer about the value provided if they “opt” in to a Key Account Program. A best practice by those leveraging world class Key Account Programs is a contract between the service provider and the customer defining what each party is responsible for doing within the partnership. The supplier would also be considered a Key Supplier of the company and be provided access as if employed by the company.
What is expected by the customer ranges from access to technical resources, early copies of latest software or hardware solutions, security of supply and even exclusive rights to specific tools/applications. The customer in return may gain access to a new product development lab, first right of refusal on channel sales opportunities, or even exclusive supplier arrangements.
Take away: Analyze your account portfolio, utilize the key account selection criteria, develop a list of value added services for your Key Accounts, draft an “Opt” in agreement and schedule a meeting to discuss it with your customer.