Customer Service Glossary
What Is Key Account Management?
Key account management (KAM) is a management process that focuses on planning and maintaining a positive relationship with a brand’s important customers. Key account management requires a significant amount of time, effort, and planning. However, the process is vital to overall growth and plays a key role in boosting sales, revenue, and client satisfaction in the business-to-business (B2B) marketing niche.
Each company identifies key accounts differently. That said, some defining characteristics may include:
- Accounts that bring in ongoing revenue
- Highly profitable accounts
- Accounts with a high customer lifetime value (CLV)
- Highly influential or authoritative accounts
- High organizational alignment
Key account management revolves around customer service, marketing, and sales departments. To succeed at key account management, companies must partner with their important clients to ensure organizational growth, increase brand awareness, and improve profits. Further, brands should develop detailed key account criteria in order to identify and optimize relationships with key clients.
Common Questions About Key Account Management for Businesses
How do you identify a key account?
To identify a key account, consider factors such as historical cost to revenue ratio, market potential, and overall alignment. Your company may prefer to identify key accounts based on their chance of becoming a channel partner. You may also prefer geographically-central accounts or those with higher revenue potential.
After choosing your criteria, rank each account on a scale of 1 to 10, then narrow down your selections to the accounts with the highest scores.
Why is key account management important?
Key account management plays a significant role in resource planning. Often, companies designate the majority of their resources to key accounts due to the higher profitability of the accounts. As a result, the management approach enables teams to learn more about their clients’ unique needs, ultimately improving the account’s performance.
What’s the difference between a standard account and a key account?
Key accounts and standard accounts differ in one significant way: the length and value of the relationship. Key account managers focus on long-term relationships when planning product or service launches, advertising campaigns, and other strategies. Standard account managers often focus on short-term accomplishments and highly profitable transactions instead.