When most startups think about key account management tactics, they are usually thinking about how goods are going to be supplied. However, the logic involved in supply strategies for startups also applies to startup service providers.
For those who are not familiar, it might be a good idea to explain what key account management is and some of the advantages it can bring to a small startup.
Understanding key account management
At it’s most simplistic level, key account management is the practice of critiquing and studying your client portfolio and choosing the key accounts that represent the best value for your business.
Once you have determined those key accounts, you are in a position to start investing in and strengthening, those relationships with a view to creating more business a better return on investment and increased profit margins.
One of the core and most significant functions of this process is in developing a solid understanding of what it is that a client or customers value most. Once you’ve figured that out, you are then in a position to discuss how you can satisfy their value needs.
The strategies involved in meeting those value needs may include supply chain management, better customer service, technological Innovation, internal processes, systems, and marketing.
Key account management is a specialist area and not to be confused with just another marketing strategy. The heart of good account management for a startup. If it is to succeed, is in the building of long-term relationships.
Why Key Account Management
Why invest in Key Account Management? Because it is simply more valuable. Says, Kapta, a leading Key Account Management Software company,
“Investing in Key Account Management Is More Profitable Than Investing in New Sales”.1
Sales tactics tend to focus on immediate to short-term financial rewards. Key account management is a long-term and strategic approach, and while it does seek to create value for its startup clients and customers, it is looking for mutually beneficial Rewards.
Key account management seeks to improve Consumer and client relationships.
Many people think of key account management as simply the Pareto 80-20 rule in practice. The rule suggests that 80% of a startup or businesses revenue is likely to come from just 20% of its total client or customer base.
While the ratio is helpful, it is not a matter of one-size-fits-all. Wallaroo land ratio has some value; key account management looks to future potential grounded in relationships not just as it may be expressed in fiscal terms.
But this in mind, for a startup looking to improve it’s key account management processes, the first question to ask is what it is that represents a high value to your client or customer.
Here then are some of the key areas that a startup should consider when selecting or targeting its key accounts.
Growth
Size is not always an indicator of value, especially when it comes to your key account choices. What you’re looking for is growth. Growth is a far more strategic indicator of client or customer future value.
A client may be small but it may be in a position to grow rapidly and as a consequence could represent a far greater opportunity to your startup than a large but stagnant account.
Behaviour
It is helpful to know something of the history of your key accounts.
In particular, their own characteristics and behavioral trends. What is the client or customer like to do business with? What are their processes and communication like? Is the client or customer open to Innovation and change?
For some startups, these might seem like bonuses if you can get accounts with his characteristics. However, these characteristics are essential for healthy long-term relationships, which are the kinds of relationships that key account management is fostering.
Innovation
I mentioned Innovation above because innovation is critical to startup success. The question here is, does the client or customer that you are targeting with your new startup has an innovative culture?
From experience, I know that those who are asking questions and open to change are likely to give you a far better long-term result – not only financially, but also regarding business culture and job satisfaction.
Collaboration
Your key accounts are going to be working closely with you and your organization. For this to be effective, they’re going to need to have a spirit of collaboration
That culture would include a willingness to invest their own resources, as well as their time into developing innovative approaches with your startup.
Values
Another question that might be worth asking is, does your startup share the same values as the key account?
Again, this depends in large part on the personality of the individuals involved. Regardless of the individual skills and the core mission of the business, personality and temperament are significant factors in driving the business venture forward.
What is it that your startup values, and what is it that your potential key account values, are you able to work within their value structure and are you going to enjoy working with him their value structure?
You are going to have to accept the fact that not every key account will share your values and your perception of value.
This is something that is difficult for you to assess until you have actually presented them with your value proposition
Selecting your key accounts is only the first step in an ongoing and constantly changing process within your startup.
From there, your startup will be faced with the challenge of bringing those key accounts on board and establishing the criteria for a long term relationship.
Where you take it from there, will be completely up to you.
Sources
1https://www.kapta.com/key-account-management/investing-key-account-management-profitable-investing-new-sales/
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