7 Different Key Account Management Definitions. Which One Is Yours?

7 Different Key Account Management Definitions Which One Is Yours

Written by Sean McPheat


So what exactly is a Key Account?

Think about your own organization and what you class as a key account.

There are many key account management definitions out there but here are the 7 most common types of classification:

Are they just the big ones?

Are they the ones you mustn’t lose?

Are they the ones that offer future profit?

Are they the ones you want your team to focus on – to look after the very best?

Are they the ones where the extra effort will bring extra returns?

Are they the ones that demand more of you?

Are they the ones that will take your business where you want it to go?

A ‘key account’ might be the result of any one or more of the above, or agreed within your organization as a result of completely different factors.

It is for your organization to choose its own definition based upon the dynamics of your industry, your customers, and your own business.

So how has your organization gone about choosing its definition?

It’s not just a case of semantics – there should be some very serious thought behind the definition because each can generate its own potential challenges.


The Definition The Potential Challenges
The BIG ones What about tomorrow’s oak trees? Do you always let the sales statistics make the decisions for you?
The ones you MUSTN’T LOSE You’ll do anything to keep them happy, even if it kills you …

What if it’s unprofitable to please this particular whim of theirs?

The ones that offer FUTURE profit Where does today’s profit come from?

What happens if they’ve been over-valued before they pay off?

The ones your staff FOCUS on So what happens with the rest, do they just ignore them?

Why are your staff focussing on them anyway?

The ones where EXTRA EFFORT brings EXTRA RETURN What does return mean?

How many accounts can you do this for – and at what cost to your business and your other customers?

The ones DEMANDING more Every industry has its loudmouths – does that make them more important?

Just how profitable do their demands make them?

The ones that will take YOUR business where it wants to go Could these be the best? Are you certain? The future is never clear.

Organisational plans change, yours included


Key Account Management is based firmly upon the 80/20 rule.

80% of any effort or expenditure gives 20% of the results

20% of any effort or expenditure gives 80% of the results

Key Accounts versus Sales

Applied to Key Accounts the 80/20 theory hits home – if we apply 20% of our organizational effort to just 20% of our customers (our Key Accounts) we will receive 80% of the organizational rewards.

However, we are not just talking of our 20% Key Account Customers in terms of their size, but in terms of their profitability and sustainability.

Therefore, a Key Account is also an investment in the future, and as we know all too well from recent stock market performance, past performance is no indicator of future performance.

This is where the biggest difference lies between selling and key account management.

A salesperson needs to live in the past, present, and future.

They base their sales on the past requirements of their customers and present discussions with potential and new customers on their present and future needs.

The majority of salespeople are reactive to the needs of their customer, only being proactive when they need to cold call potential new customers.

The Key Account Manager lives in the present and the future but in a completely different way.

They are constantly looking for emerging trends, whether they are emerging in the present or seem likely to emerge in the future.

They apply these emerging trends to the industry that they are in and to the industries that their customers are in, proactively.

And thus, position themselves as advisors to their customers and portfolio managers to their own organizations, managing a portfolio of customers who will provide a solid and sustainable return on investment.

What’s your definition of a key account?

Please write a comment below and let me know.

Go to website:   www.ncmalliance.com

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