How can you adjust your key account growth strategy as your business evolves?

Many businesses close themselves off from growth outside of key account segments. In my experience, that is a mistake. Certainly identify targets....but keep the door open. If the environment changes (and it is always changing), re-evaluate your strategy to ensure you can adapt quickly to the new reality.

Customer segmentation is critical for any company, regardless of seeking growth or securing its position in the market. You need diverse types of accounts to leverage according to market conditions, namely the supply/demand factor. Every company should have 1) a bucket of strategic accounts, typically the key accounts, to guarantee substantial product/service volume off-take but typically lower margins. 2) a good bucket of regular partners which off-take volume but without contract less regular every month. 3) a bucket of spot/opportunistic accounts to use either when you need to move product/services or to optimize when the market is short and you can get high margins: that wouldn’t be possible with the contracts or the regular customers

The first and most important thing here is to identify a customer as a key account. There are several factors involved when we nominate a customer as one of our key account. Our capability in terms of technology, products, commercial and approach enables us to define it. Once we qualify these parameters in accordance to customer needs, we can move forward and start working to convert it in key accounts.

In my experience building a relationship going beyond what the set deliverables mentioned in contract help you build a stronger relationship with the key accounts. This will automatically build trust and empathy of your client along with you. Which is very important factor for you in today’s competitive environment. Building on data can something be done at campaign level. But building relationships and trust with the person can take the things to new level.

Yes, a periodical monitoring is required. Not only in terms of commercial and size of business but we need to have a close feedback about product performance, competitors activities, technology upgrades and new projects in pipeline. A key account manager needs to have 360° approach as he is the key points of contact for the topmost position of hierarchy to the lowest employees at shopfloor.

Two things to consider here. 1) what is your BATNA (Best alternative). Compare performance of Key Accounts to the rest of your portfolio and prospects/ pipeline. What were good conditions last year may not be the best now. Secondly, track the performance of your contracts or key accounts. An agreement must be executed according to the conditions (from both parties) regardless of market conditions change. But I have seen time and time again customers securing conditions either by contract or formal agreements but, down the road, not respecting the terms - off taking fewer products/services because they could find better price conditions in the market. That′s not a strategic partner, and you should sit down and discuss it. A deal is a deal.

Key Accounts should be true partners, not just good customers. And you can’t have key accounts without them knowing: it demands mutual understanding, agreement, and commitment to be treated as one. There are several implications for both sides with the need to allocate resources. They should know your growth plans and interest in expanding to other regions, growing your product or services portfolio, developing new solutions, or testing new models. From a customer perspective, they need to be informed, consulted, involved, and participate in that growth strategy. Although obviously, you shouldn’t become a hostage of them, all the prior up to a certain extent. Giving too much power to a single or couple of customers may be dangerous.

Your position as a key supplier is to present and provide “problem-free” solutions so your customers can focus on the end of their business and not upstream. But one key element to secure and attract key accounts is that you should be a reference, the “expert.” Most of my Key customers praised hugely regular interactions/exchanges about the market, legislation changes or risks, potential disruptive solutions, global economy, and industry sector status, trends, and watch-outs. These are crucial information elements they need to forecast, do internal reporting, and anticipate their market positioning. You become their confident, their trusted source of information. That alone can differentiate you from your competitors.

Here, there′s a flawed premise. You wouldn’t have arrived at the Key Account supplier/customer position without having built trust and rapport. Even if you haven’t done that purposely, at least on their hand, they found reasons to trust and engage with you. So the typical step is the other way around, “build trust and rapport” to attract or engage in a relationship of Key Account level unless there have been changes in people handling the account (you replace a colleague or the customer side they have a new purchaser), then absolutely build up trust and rapport to “protect” the account and explore potential growth.

Don′t forget that, with Key Accounts you’re typically locked on contractual conditions – formal or less informal – that you can’t change along the way to follow market developments. So if you have a low performance Key Account, and the market has grown and overall you can get higher margins from your products and services, you wouldn’t be able to change those locked on agreements that typically are for one or several years. So monitor your Key Accounts performance portfolio and anticipate your next moves or conditions for new key accounts and also for the upcoming negotiations with existent contracts, to match your growth strategy.