In your business currently how do you treat your key accounts? Do you know who they are? Do you understand the value that they bring to you? They are interesting questions. In today’s business world your key accounts are the most important people to work with, followed closely behind by your staff.
What is the definition of a key account? In most cases they will be the small segment of your clients that make up 80% of your cash flow. Although small in number they are the clients that will do maximum damage if they move away or stop purchasing through your company.
Generally they will give you:
- Repeat business
- Growth of market share
- Referral opportunities
- Volume business and sales
Without key accounts your business would quite likely self implode? I am sure you would agree. Whilst the fact about customers is well known, so many businesses have no plan for their most important customers. They simply assign a salesperson or a team to a segment of the customer base. From that point the plan falls right away from the process.
So what do you need to do here? You must create a Key Account Plan. Here are some simple steps to get started in doing that:
- Review your current business to know exactly where the sales are coming from. From that point your database should be split up into clients of different categories and product ranges.
- Determine the levels of business coming in and in what categories. How are sales expected to change in those categories in coming years?
- Exactly what could be considered your core business? What products and services sit squarely in those categories?
- Are there any seasonal pressures on sales and service activities? How are the trends going now in those categories?
- Consider the level of sales for a client that would be considered above the ordinary level.
- Divide your clients into groups and zones. What zones and groups are the easiest to service?
- Review the financial data for each client and their sales activity over the last 2 years. How has that activity changed? What is expected to happen with that activity in the future?
- What are your competitors doing now and what pressures will they place on your market share and client base?
- What threats exist in your market currently and how will that flow through to your business base?
When you answer these questions you have the raw data to move ahead towards your Key Account Plan.
When it comes to a professional sales career, it pays to understand the things that are truly important to your business and your sales progress in your market. I like to call it a constant focus on growth and service. The client is at the centre of the process and the assessment.
When you are really productive you tend to remove the ‘peaks and valleys’ from your sales year and your sales performance. Generally everything gets a lot easier from a results perspective, but you have to keep up the personal momentum.
So how do you get this productivity and systemisation into your business plan and sales focus for the year? Here are some tips that I have gathered from many years talking and working with sales teams in different industries:
- Use your time very well. Protect your time from the frustrations of servicing time wasting people. In professional selling you are totally accountable for the way you use your time and doing so with the right people. Some clients will take a lot of your time so you should understand the value of some clients over others. It might sound a bit selective but that is the way it must be.
- Know your priorities in the working day. Some things on a daily basis will have to be done over others. In normal sales markets and industries the prospecting process and client contact cycle should take priority over everything else. When you do this correctly you can keep the orders and sales coming in with little disruption. It also helps you see the changes to your clients needs before that has a major impact on your sales results and income.
- Make sure your key clients are treated differently than ordinary clients, and are contacted as part of a key account management program. You may choose to ‘coach’ them, ‘partner’ with them, or provide exceptional service to help with their bottom line. When the client knows the true value of your products and services, the ordering and sales process is quite easy.
- Note the ‘selling seasons’ that apply to your products and services. In most financial years you will have 2 or 3 ‘selling seasons’ where sales and orders are easier. You get to know these cycles by understanding your clients. How long does a selling season run for in your industry? When do they start, and why do they stop?
- Seek referral business leads from all of your good clients and prospects. It is easier to convert new business from a referral than it is in anything else you may choose to do in prospecting.
- Assess your clients for the repeat business opportunity they can give you. Also assess the size and frequency of the typical order that they place with you. Soon you will see some clients bring in most of your business annually. The Pareto Principle applies (80/20 rule) where about 80% of your business will come from 20% of your clients. You just need to know which clients are the best ones to work with.
Perhaps you can add to this list. The issue is that you really do need to understand your market and the sales and income you can build from it each year. Become a productive salesperson that works to a client contact system.
Once every 6 months you should analyse your customers and prospects. When you do this correctly you can stay on target when it comes to prospecting and converting new business. The analysis becomes part of your business plan.
This process is actually part of a Key Account business model, and will produce a list of Key Accounts that will require different response and interaction than ordinary customers. So let’s go back to the process, and here are a few stages that can be optimised for your industry and market.
- Identify all the customers in your market today. You will need to collect the customer information and review it for relevance and opportunity. Look at all the variables and types of customers that you can work with such as existing customers, competitor’s clients, new customers, and old customers. All of them will offer some benefits. Some of your customers today may be working with competitors at the same time, so they should be identified for the special treatment that the ongoing relationship with them will require.
- Review the information for accuracy, opportunity, relevance to your business, and timeliness of the next sale or purchase of goods and services. If your product or service is a seasonal based unit, then you will be mindful of that selling season and you should prepare for it.
- Analyse customer details so that you know of any opportunities to expand your offering
- Segment your customers and validate them into groups that you can act on. Prioritize the members of each group into levels of action and importance.
- Determine your Key Accounts from ordinary customers so that you can service them differently and specifically.
Key account management is not hard; it is just a distinct process that requires a system to take you through important decisions.