The Most Important Factor for Key Account Success

Now we all know that key accounts are critical—it’s fairly common to see 70-80 percent of an organization’s business come from just 20-30 percent of their accounts.

But as the global economy has continued to sputter along, leaders and investors have continued to call for growth.

Conventional wisdom says that the quickest and easiest way to get growth is from existing customers.  And while that may be true, try telling that to your key account managers—sometimes growing our biggest accounts can often feel like trying to squeeze water from a stone.

The business of Key Accounts is incredibly complex, and there are many factors that combine to either enable or prevent success.  Things like account planning, coordination across teams and across business units, coordinating executive involvement, deciding how to structure the teams, how to build the necessary skills, how to manage compensation in a team selling environment, and on and on and on.

And all of these things are critical for companies to get right for key accounts to work.

But there’s one part of key accounts that is more important than anything we can do internally to try and grow an account: THE CUSTOMER. 

We can have the best key account teams, the best account planning process, the best executive sponsor program, the best EVERYTHING.  But if a customer isn’t willing or able to meet us halfway and live up to their end of the bargain, that relationship is dead on arrival.

If we’re going to partner with a customer at a deeper level than we do today, that requires a LOT of capital on your customer’s part:

Human capital—we’re going to ask customers for more of their time,
Political capital—we’re going to ask to grow partnerships into different parts of their business and at higher levels in the organization, and
Actual capital—we’re hoping to cross-sell and grow share of wallet

And that leads to a few questions:

What does the customer get in return for all of this effort?  What is the value to the customer for increased partnership?  It’s got to be more than a discount on what they buy today and a dedicated Key Accounts team.  How are we going to help them grow their business above and beyond what we are doing today?
Is the customer even able to live up to their end of the bargain?  Just because they happen to spend a lot of money with us today doesn’t mean they’re willing (and able) to take it to the next level.  Will their colleagues across BUs be willing to partner with us?   Will they open up and share information required for us to partner at a deeper level?  Can our two companies even pull this off?
What happens if the “partnership” we envisioned doesn’t pan out?  We suddenly have a very expensive Key Accounts team and other resources we’re providing an account that is not growing.  How do we pull back resources without damaging the relationship?

Companies that focus on the execution of Key Accounts over the strategy of Key Accounts often find themselves in a place where their key account programs feel like a leap of faith.  They elevate a customer into the program, and it takes years (and a lot of money) to figure out if this partnership is going to work.

Leading edge companies, however, have found ways to overcome this.  They:

Rigorously and objectively analyze not only revenue opportunity but also strategic fit between their company and a customer before nominating them to key accounts.
Set clear expectations of mutual growth and accountability and test for ability to partner BEFORE elevating a customer to a Key Accounts program.
Put in a series of checks and balances to continuously monitor partnership performance and re-calibrate with the customer when things fall off the rails.
Have a way to scale back resources in a way that does not damage the relationship with the customer.

Before we can even start to think about account planning, executive sponsorship, Key Account Manager skills, and all of the other really critical things to get right, we’ve got to ensure that we have a program that is flexible and destined to succeed out of the gates.

CEB Sales members, listen to our webinar replay that reviews these concepts in greater depth and walks through key account strategies from three different companies to help bring these principles to life.