Key Account Management: Build Stronger Relationships with Key Customers
"Talk to Your F***ing Customers".
No, that's not our new tagline.
But it is an ebook our founder, Steli, wrote a couple of years ago. The reason I love this title so much, is because it focuses on how companies can get customers to love them: just talk to them.
But what about those really important clients in your pipeline? Those key accounts who bring in a cloud-defying mountain of your monthly revenue… How do you nurture those relationships?
The reality is... there is no silver bullet to win over big spenders.
Retaining these key accounts requires a great communication strategy and a simple promise to be their partner in helping them grow. Key accounts want more than a chatbot to talk to if the sh*t hits the fan. They want a team who are dedicated to being there through the good, the bad, and the ugly.
Key accounts flow more revenue into your company. They have higher lifetime value, and add a ton of street cred to your brand.
In this guide, we’ll look at what key accounts are, and how to build a key account management strategy to make sure they stick with you for the long-haul.
What is Key Account Management?
Key account management (KAM) is a strategy to build a partnership between a company and key clients. Want sustainable revenue? Then, you need to invest your time in building a key account management program. Tracking and nurturing key accounts can pay off—big time.
At this point, we all know that retaining customers is more cost-effective than acquiring new ones. More than that, a good experience with your company can bring in new referrals and those gushy testimonials you love to display on your website and social profiles (and heck, why not on your fridge!).
Focusing on key accounts can drive more revenue into your business and create lifetime bonds with customers. If you help them achieve their goals, there's a good chance they will stick with you for the long haul.
Milind Katti—the co-founder and COO of DemandFarm—looks at key accounts through the lens of the Pareto principle: 20 percent of your top customers will bring 80 percent of your revenue. And with the increase in tech to enable your KAM program, this is only getting better. As Milind says: “No level of automation can replace the intuition an experienced key account manager brings to the job. It can only enhance it.”
Why is Key Account Management Important?
Key account management can be a game-changer for company revenue—especially for startups and SMBs trying to cement their spot in an industry.
Research by Rain Group found that sales teams who use KAM are three times more likely to grow 20 percent (or more) revenue from key accounts, and 4.5 times more likely to improve customer satisfaction YoY.
Source: Rain Group
A lot of those wins are because KAM can:
- Strengthen customer relationships. Key account planning is built on communication. Constantly talking to large accounts creates a feedback loop—learn what customers need, and build trust at the same time.
- Increase revenue and profitability. KAM taps into the most valuable customers in your pipeline. Once a pattern is developed, it's easier to spot opportunities in your industry to nurture valuable clients to turn into high-growth accounts. More key accounts = revenue growth.
In theory, your sales team can earn more in revenue without closing more deals. All it takes is closing the right deals.
Here’s the problem: around 87 percent of companies don't get strategic account management right. And that's because these initiatives also come with drawbacks. With so much time spent focusing on strategic relationships, it's easy to:
- Neglect "non-key" customers. KAM requires reps to get selfish about how they spend their time. Nurturing a key account takes a lot of energy, and it's only natural that other customers won't get the same treatment. But sleeping on non-key accounts can result in missed opportunities and potential loss of revenue.
- Way overspend on your budget. Key accounts are a calculated bet. It's why so many sales teams hand these accounts over to their rockstar reps in the hope that the bet will pay off. But all this extra attention comes at a cost—and sometimes that cost isn’t justified.
- Complicate your account workflow. Key accounts can be tricky with a lot of different stakeholders and needs. If your team doesn't understand the individual circumstances of each account, it's hard to communicate well and make them feel important. This can have the opposite effect of nurturing and retaining these accounts.
So, just how can a sales team balance nurturing key accounts while closing more deals? 🤔
The 4 Pillars of Key Account Management
Over 20 years ago, Dr. Michael Stankosky proposed what he thought were the four essential pillars of knowledge management: Leadership, Organization, Technology, and Learning.
Each pillar represents a core element of any successful KAM strategy:
- Leadership. Sales leaders provide clear direction for which accounts to target and how many the team should aim to close. This leadership also sets the tone for the overall KAM strategy, from how often the team should touch base with key accounts to how these accounts are targeted and measured.
- Organization. Who will research and find key accounts? What will the process look like to target and close them? Organization is the bread and butter of any KAM process. A sales team will have clearly defined roles and ideally carve out individual relationships with important customers to build trust.
- Technology. Your tech stack will become the command center of your KAM strategy. The CRM, analytics tools, and communication platforms you equip your team with will make a huge difference in how they nurture key accounts.
- Learning. This is arguably the most important pillar of Dr Stankosky's theory—is your team willing to learn and change up its strategy? Your key accounts won't be static. Customer needs and goals will change over time. This requires your team to listen, learn, and change up their approach to suit individual accounts.
Any KAM strategy worth its salt will use these pillars as a solid foundation. But you should also use your secret sauce—customer data—to create a competitive advantage. Let's take a look at what that means 👇
5 Steps to a Successful Key Account Management Process
Throwing money and effort at a high-paying customer might work in the short term, but it’s not the same as developing a successful sales strategy around key accounts. Let’s dive into the ways you can build better customer retention and loyalty with your most valuable customers.
1. Identify Key Accounts and Potential for Growth
A huge mistake salespeople make is to assume key accounts = highest revenue.
A report by Gartner found sales organizations that pick key accounts based on current spending and size don't improve the chances of the account spending more in the future. In fact, they found that prioritizing current customer spend as a key account selection criterion actually reduced the likelihood of increased spend.
On the flip side, if key accounts are chosen based on their predicted future spending along with their openness to working together, we see an average spending increase of around 8 percent.
To avoid this trap, look for accounts with the greatest growth potential. These accounts might be small, medium, or large-sized with an expanding need for your products or services in the future—and a bigger spend.
Alicia Kerr is an Account Manager at Bubble—a full-stack, no-code platform. She explains a key account isn't just one that has a high MRR. Instead, it has account growth potential across different use cases, parts of the business, or by growing rapidly and requiring a more substantial agreement.
"Key accounts are the ones we want to maintain close relationships with," she says.
"We do this by holding quarterly business reviews and making sure they add value for the client as well as for our team. This could mean inviting a member of the technical or product team, or offering unique insights from our other key account interactions that might hold value."
Bubble's accounts team also keeps a close eye on its key accounts using Crunchbase, LinkedIn, and Google Alerts. If anything exciting happens in their business, they’re the first to know.
📋Task for this step: Figure out how much growth potential individual accounts in your sales pipeline have. Look at funding, hiring patterns, and product needs to decide if the company is a key account contender. If they fit the bill, add them to a key accounts target list.
2. Gather Data About Your Key Accounts
Next, dig deep into each account on your target list.
The goal in this step is to learn everything there is to know about a key account, from their goals and needs to pain points, decision-making process, and main stakeholders. Start with public information on LinkedIn and Crunchbase, and then go straight to the source.
John Xie is the Co-Founder & CEO of the AI-productivity tool Taskade. He says the key to gathering solid data from an account is to maintain strong relationships and get them talking.
"We like to reach out at least once a week to maintain a consistent flow of communication, send surveys/feedback forms once a month, and do our own research on them in our spare time," he says.
"The one important thing to remember is that everyone wants to be someone's "key account," and you can use this to your advantage to attract and keep key accounts in your portfolio. Make sure you always have something special to offer, something unavailable to your average client."
📋Task for this step: Gather key account data that is not publicly available. Reach out to them 1:1, send surveys, and tap into what the account really needs to increase its monthly/annual spend. This will also help uncover how much growth potential a key account has.
3. Analyze Account Data
Once you have enough data, analyze it to understand any strengths, weaknesses, and opportunities with the key account.
The secret here is to look for any opportunities to increase the key account spend on products through cross-selling, upselling, or personalized solutions. Jas Banwait Gill, Growth Manager of SwagMagic, admits finding key accounts is like a treasure hunt, but her team's superpower is using its customer relationship management (CRM) platform to analyze data.
"Our CRM helps us keep tabs on all our interactions, including emails, calls, meetings, and sales transactions. Should a client complete a hefty $3,000 order without engaging with our sales team, our trusty CRM raises the flag, alerting us to step in and say hello."
The SwagMagic team also uses data to personalize outreach with key accounts by digging into feedback, preferences, and pain points stored inside its CRM.
"For instance, if someone's consistently placing $500 orders, we'll reach out to discuss bundling them into a more efficient, money-saving option. Putting their budget above our bottom line ensures a win-win situation.
"It's all about fostering trust and making sure they know we're here to support their success, not just our own."
📋Task for this step: Start using a CRM to store key account data and optimize outreach. A CRM like Close can store important data and keep tabs on key accounts, so your team always knows which client relationships they should focus on.
4. Develop and Implement a Strategic Account Plan
Now, it's time to use your analyzed data to develop a comprehensive key account game plan.
Consider each key account on your list and determine its growth potential and long-term goals. Use this opportunity to carve out areas where you can add value to the client's business and whether there is room to grow alongside them.
Your strategic account plan should include:
- Timelines. How long should it take to research, target, and onboard a potential key account?
- Parameters. What thresholds does a potential key account need to cross (i.e., growth, potential spend, funding rounds) for it to be placed on the target list?
- Implementation. Who will take charge of onboarding new accounts? What will post-purchase nurturing look like, and will individual sales reps be in charge of their own key accounts?
You should also start relationship-building with key account stakeholders and decision-makers. If you can communicate with these people early and develop a roadmap for success together, it will lay the foundation for long-term relationships with these clients.
David Godlewski, CEO of Intelliverse, says it's important to customize communication based on each key account's preference. The best way to do it is to build out detailed profiles for each account in a CRM to store information, past interactions, and challenges they've faced.
"This data helps you anticipate their needs, personalize your messages, and offer solutions proactively," he says.
"You can also set up alerts for contract renewals or milestones and ensure you're always on top of things, which shows you are a dependable and efficient partner."
📋Task for this step: Scope out the key account's main stakeholders and get the communication ball rolling. Learn about their goals and pain points, and use these conversations to build out a detailed profile of the key account.
5. Monitor and Measure Key Account Performance
Finally, monitor how your team targets, closes, and nurtures key accounts—and adjust it when needed.
A key account this year may not classify as a key account in three years' time. If they don't meet growth targets, slow their spending, or their satisfaction with the product drops—find out why. It's super important not to "set and forget" who your key accounts are, especially since your team spends a hell of a lot of time talking to them.
The review process is also a perfect time to reach out and have a conversation with an account's main stakeholders and seek out any upsell opportunities.
- Let's say you know a product feature they couldn't afford 12 months ago would really help boost growth for them in Q4. Make a note to reach out in Q2 to see if there is a way to work together and get the feature up and running for the last months of the year.
- Ask questions about what the key account needs from you. This could be more communication, better training, or product update ideas.
- Take an interest in the moves the key account is making. If they have had a recent funding round or product release, celebrate their win with them.
But there is also another reason why you should regularly run the numbers on key accounts.
If a key account isn't delivering, don't be afraid to move another promising account into your pipeline. This doesn't mean you ignore the previous key account—just reevaluate how much time you spend with them. After all, the ultimate metric to measure any key account is its ROI, and a big part of that is how much time you sink into nurturing it.
📋Task for this step: Review current key accounts and look at the numbers. Move any promising growth targets into your key account basket, and stop prioritizing stagnant accounts in your pipeline.
How We Nurture (and Keep) Key Accounts Happy at Close
Meghann O'Brien is a Senior Customer Success Manager at Close. One of her main goals is to find key accounts—and keep them happy.
Here is how her team does it 👇
Identify and Tag Key Accounts
To start the process, she identifies key accounts based on their monthly spend. The team looks at a bunch of different metrics, from MRR, the number of seats (including seats added/dropped), support tickets, and NPS to determine what accounts to focus on.
If an account looks promising, it gets tagged:
Split Key Accounts into Tiers
Next, possible key accounts are flagged and split into three different "tiers."
These tiers determine how much time the success team spends with an account—those in the top two tiers are assigned 1:1 Success Managers, while bottom-tier accounts have access to email support. However, each account is handled on a case-by-case basis.
"For the most part, we strategize differently from account to account, but of course, try and share best practices. If something works really well, be sure to use it in other areas that make sense," Meghann says.
"Most of our Customers are in the SMB market, so we have many close relationships with our partners. We really value the transparency and candor we can have with them, and tend to look at our role as more consultative and collaborative than just a straight business relationship."
Run a Health Check
Next, the team looks at how much the account uses the Close platform. If there have been any internal movements that could impact future growth, like acquisitions or funding rounds, the team makes a note of it in their file.
Meet with Key Accounts Every Quarter
Once key accounts are in our pipeline, we constantly nurture them.
At Close, one of the main KPIs we measure key accounts against is hosting account reviews. Meghann says her team pushes to meet with a percentage of our accounts every quarter and ensure they touch base with different customers each time.
"Our conversations are geared toward and around what is most important to the Customer. We also have multiple channels for our Customers to interact with us, so it’s not mandatory if they prefer not to have 1:1 Zoom meetings."
On top of this, there is an active Slack Community where customers can crowd-source best practices or ask questions, and the team also hosts product releases and roadmap webinars.
If there is one message to take away from how Close's customer success team handles key accounts, it is this: We never want our customers to feel like our interactions are simply self-serving. Every interaction is to deepen the working relationship so we can grow—together.
Key Account Management Can Drive Growth—When You Do it Right
Most companies hear the word key account and automatically think about sales.
But key accounts are so much more than just revenue drivers. These accounts can become partners. It's these businesses who help grow your business—while you help grow theirs.
The trick is to do what your competitors don't. Talk to your customers. Get to know their pain points. Listen to them when they tell you that you need to change something. And use tools like CRMs to track every single thing they do.
If you show up for your key accounts, they will show up for you. If you effectively implement KAM, you can build lifelong relationships with customers—and prove to similar accounts that your products are worth investing in.
Want to get a head start on creating your key account management program? Use the right tools—including a high-powered, customer-focused CRM.
Try Close today, or watch our on-demand demo, to see how this powerhouse tool can get you closer than ever to your key customers.