The essence of creating a business plan for key accounts lies in knowing what is happening to the companies you do business with. Without knowing your market, you could be wasting your resources on businesses that don’t give you the returns your business needs to survive.
It’s easy to think that the big spending companies you supply don’t need management, or that smaller businesses can’t be helped. But with a carefully designed business plan for your key accounts you can increase orders and organise your own business far more effectively.
This key account management is essential in business. It helps you define who your customer is – crucial when developing your marketing and sales plan. Without a tight definition you could be spending vast sums on chasing business that wont deliver the results your company needs to survive.
Your key accounts aren’t necessarily your biggest accounts. There could be a gateway account that has consistently led to business with other companies. They could also be accounts that are in a growth period (and need a large volume of goods from you). There could be opportunities to create strategic partnerships with them.
By identifying these points you can create a better business relationship with your customers. One that is profitable to you, or increases your standing among the companies you want to conduct business with in the future.
There are 5 basic steps when setting up a key account business plan:
Step 1 – The long hard look
Identifying which of your accounts is key, rather than just big, is your first step. You will hopefully already have customer management software in place. This makes it easier for you to track the most profitable and strategic relationships. If you don’t have it, it’s time to find some.
Remember don’t just look for the ones that are big customers now – this could have been a blip, where one company needed your product/service for a short term project that may be coming to an end. Identify those companies that are growing, or shrinking and how their current situation may affect your business.
Step 2 – Objectives
Once identified, you need to draw up a set of realistic objectives. Base these on what you know is happening in that company. Are you going to sell x number of units to this company in the next 5 years? Or is the objective to create a stronger relationship with them? What are the problems they’re facing at the moment and how can you help them? You’ll find there are a wide range of objectives for each key account.
Step 3 – Make a key account business plan
You should only write the business plan when step 1 and 2 are fully fleshed out. Poor preplanning will lead to a bad business plan. Highlight your main objectives in the plan, as well as clearly stating why they are a key account.
Step 4 – Realise the plan
Without action the plan is nothing more than an exercise. You have to fully commit to your plan and see it through. If there are changes in the key account’s business, take a step back, re-assess your original plan to build in the new information.
Step 5 – How did it go?
Everyone in your sales team needs to be involved at every stage. The end stage is the one where you all gather together to review how successful implementing the plan has been, and to learn lessons from any mistakes.
As with any successful enterprise, creating a key account business plan takes time. But with proper planning it has a big potential to boost your sales.
Key account management (KAM) is concerned with planning and managing the relationship with the customer but this is a means to an end if you have little business development to show for it. Key account managers are not just salesmen with good negotiation skills but apply clear strategy to select, develop and maintain their most important customers in order to profit from them. They need to constantly update their own skills and have a clear idea of company strategy, operations and marketing functions in order to build lasting relationships with their key accounts. Customers now have power over their suppliers and are looking for greater partnership, anticipation of their needs and customised solutions/resources to give them competitive advantage.
Even for a large company the number of key accounts should not become unmanageable (optimum 15 to 35) and the right accounts should be selected for inclusion. With high numbers of key accounts it is doubtful that you can successfully attend to them and failing to deliver can lead to them exercising their customer power and going elsewhere.
When selecting these key accounts bear in mind the following:-
If you have answered yes to most of these questions then clearly you are not spending vast amounts of time managing accounts that really are not profiting your company and don’t belong in the key account category.
ISM training will be running a Key Account Management course this month please contact Michelle for details.