What are Key Accounts?
Key accounts are a sales team’s most valuable customers: they generate a substantial amount of revenue, remain repeat customers, and often refer others to your company. It’s important for a sales team to maintain positive relationships with their key accounts to ensure future sales and overall support.
Why are Key Accounts Important?
Key accounts make up most of a business’s total revenue. It’s important to identify and manage them so they consistently contribute recurring revenue.
While they’re valuable in terms of dollars earned, key accounts have other strategic benefits. If they’re a legacy customer who’s used your product for years, they’re likely referring it to others and sending sales prospects your way. Connections made through key accounts shouldn’t be undermined: they can indirectly bring you more business.
Their brand awareness and reputation may also have an impact on your business. If they’re well-known within their field, there’s a potential that they mention your product at conferences or in webinars. If others trust their knowledge and experience, they’ll trust their referrals as well. It’s important to know who exactly your key accounts are, and ensure your work ethics are aligned.
Key accounts aren’t just any customers who make large purchases. They’re crucial to manage because they’re a consistent source of revenue, and help your company bolster new leads and network within your field.
How to Identify Key Accounts
It’s important to identify your key accounts and maintain relationships with them so they don’t leave you for your competition. However, you can’t say that “any customer spending more than X amount” automatically qualifies as a key account.
Build out a scoring system to help identify strategic key accounts within your business using the following measurements:
Revenue potential is important. How much, realistically, will a customer grow within a fiscal year? If they’re projected to grow and rely on your product, consistently, you can assume a high amount of revenue from them.
Remember, key accounts don’t make one-off large purchases; they make large recurring purchases.
Depending on your product and business model, where a key account is located may matter. Some products are designed to be used in specific areas, so if that’s the case, ensure your key account operates there.
Location also comes into play when managing a relationship with them. It can be difficult to respond in a timely manner if you’re multiple time zones away, or even find a good time to jump on a call.
It’s easier to form a more meaningful relationship with a customer you’ve already been working with. They’re familiar with who you are and how your product works, and depending on how long you’ve been working together, would be more excited about fostering a closer working relationship.
Try to find existing customers that meet your key account qualifications rather than prospecting for someone new. If you already have a strong foundation, build off it.
Since key accounts often bring referrals and are recognizable in their field, they should have a similar company culture and/or brand identity to you. If two companies are drastically different, they likely won’t work as well together.
Managing Key Accounts
Companies typically have a separate team (within their sales team) specifically for managing key accounts. Key account management is different from typical sales: you’re focused on long-term goals rather than making quick, one-off sales.
A key account management team should focus on the following:
- Relationship building. Trust, respect, and communication are important.
- Knowing the ins and outs of what the customer needs. Focusing long-term means adapting how you help them, as they will inevitably come across new roadblocks and create new goals for themselves.
- Effective communication. Always ensure you keep all the parts moving efficiently.
- Alignment of goals. How do your long-term objectives align with the customer’s needs?