Key Account Manager: Are You Armed With a Strong Pricing Strategy? 🔩
Key account manager jobs: Are your key account managers and customer-focused sales teams armed with a logical pricing strategy?
Sometimes even the most experienced key account manager or sales leader has to develop a sense of gallows humour and see themselves as fulfilling a very demanding and often thankless task (see Glengarry Glen Ross).
They are often the person stuck between a customer (and increasingly often a skilled procurement executive) and a demanding business of their own. Thus, these two entities have quite diverging criteria of success usually – the procurement officer is to drive down prices / and or extract more value from the supplier – and the business itself seeks to do the opposite (or deliver more value and maintain or increase profitability).
Of course, the procurement professional can be often self-defeating by just focusing purely on price (we will cover that in our future blog). In this blog, we will discuss whether the key account manager is supported in your business and whether they are supported in pricing tactics when they go into a big negotiation.
The responsibilities of the Key Account Managers and sales representatives include building leads, building relationships, completing and submitting tender proposals, negotiating with customers, seeking resigns and also defending value and pricing pressure without any guidance or education on strategies of pricing.
In this article, we will provide you with the best practices of a key account manager and the key account management techniques. Also, we will share with you several unique skills crucial to a successful account. Additionally, we will explain why pricing tactics should be a part of key account manager’s job. Furthermore, we will talk about the major sources of stress for key account managers.
Definition of key account manager
KAM is the process of creating long-term ties with the company’s most valuable accounts. Hence, these accounts make up the majority of the business’ income. To bring buyers into business partners, a key account manager (KAM) typically provides dedicated resources, unique offers, and periodic meetings.
Not only do KAMs find creative ways to meet the client’s challenges and opportunities, but they also present reports about the client’s progress to key stakeholders.
The core role of a key account manager (KAM) is to handle the most valuable clients. In addition, they manage the account, build strong relationships with the client, identify challenges or opportunities, and find ways to assist with these challenges and opportunities.
If you use the right key account strategy, you’ll reap greater sales volume and long-lasting strategic relationships.
What are the key account management best practices:
- A winning strategy hinges on being selective. Be sure to choose the right key accounts — and apply the same criteria to each one. Especially for global key account management.
- Regularly review your key accounts to make sure they still require the additional time, energy, and resources.
- Keep track of non-key accounts. If a customer is about to have a windfall, they may qualify as a strategic account. Convincing them now will earn you their loyalty before any other company does.
- Periodically assess your selection criteria. Are your current key accounts generating as much ROI as you anticipated? If not, something might be wrong.
- Assign dedicated strategic account managers (or KAMs). These employees cut off from sales, if possible.
- Build diversified teams around each account manager. To serve your clients well, you’ll need a menagerie of skills, disciplines, and expertise.
- If possible, name an executive sponsor to each account. They can be a major role in getting the necessary resources, connecting with the C-suite at the target account, and providing high-level guidance.
Key account management articles of process
- Set up a step-by-step guide for internal account reviews. Depending on the size of the team, the value of the account, and the dynamic of the relationship. These might be weekly, monthly, or quarterly.
- Regularly check-up the account’s engagement and loyalty. Both should trend upward.
- Schedule recurring check-ins with the account to get their feedback, address any issues, and find areas for improvement.
Tools of key account management techniques
- Use a CRM to keep a log of your interactions with the account stakeholders and give everyone on the account team updated into what’s happening.
- Implement an email tracking and notifications tool to give notice when your recipients open your emails and click any links.
- Use LinkedIn (either the free version or LinkedIn Navigator) to get updates in your account’s market and industry, strategic shifts, hiring and firing decisions, and more.
- Set up calls and appointments with a meetings tool to make the process seamless for the attendees.
- Invest in a video platform so you can create personalized videos for prospecting and relationship-building.
A well-planned, comprehensive key account management strategy won’t just keep your best customers satisfied — it will also provide opportunities to improve the relationship. Your retention rates and bottom line will both benefit.
Several unique skills crucial to a successful account:
1. Understand the Company
A key account manager must have a great understanding of her account’s strategy, market position, finances, products, and organisational structure. They’ll use this knowledge to make business cases showing how price changes, customisation, and add-ons will add value.
Key accounts don’t usually buy off-the-shelf: They want a tailored blend of products and services suited to their needs. With that in mind, it’s crucial a KAM can work across the organisation to develop these offerings.
A KAM has to have great leadership to guide her team members (which might include a salesperson, marketer, technical support, implementation and/or onboarding specialist).
4. Orchestrate and Execute
Key account programs demand movements. To be successful, KAMs should be capable of planning short-term and long-term plays, carrying them out, analyzing the outcomes, and applying those takeaways to their future strategies.
5. Dynamic Business Acumen
What’s business acumen? It’s the understanding of how a company makes money. A KAM should develop dynamic business acumen. According to BTS, this is the “knowledge of how the drivers of customer growth, profitability, and cash flow are changing, of how the customer’s markets are changing, and of how the interrelationships within the customer’s business are changing.”
With this knowledge, they’ll be able to solidify their position as a trusted resource and advisor for their clients.
6. Analytic Skills
In addition to having business acumen, key account managers should have an analytical mindset. Their analytic skills will help them create and present business cases. They need to be able to think quickly and apply their knowledge to a variety of different clients and markets and be confident when presenting the information.
Key account manager jobs – why pricing tactics should be part of the equation
I previously worked for a large B2B industrial corporate where roughly 25% of the revenue came from approximately 40 key account clients – with a tail of about 50,000 smaller clients.
The Key Account Managers’ and sales representatives’ responsibilities include building leads, building relationships, completing and submitting tender proposals, negotiating with customers, seeking resigns and also defending value and pricing pressure without any guidance or education on strategies of pricing. Thus, even when stated like that, it is a tough remit.
When you have to work with internal teams, customer service, finance, etc. and be the chief point of contact for the customer – i.e. you are the national account manager – but you are seen as the face of the company. You have to be responsible for everything the company does – and that, of course, includes pricing, financial performance and value.
Major sources of stress
One of the major sources of stress is that the account managers are not armed with any pricing policy when going into a negotiation. For example, they are not armed with an ability to move on rates, a playbook on how to negotiate or even been trained in discussing value.
If that was not enough – they would be given a hard time for reducing prices. But there’s no incentive at all to increase rates! The amazing thing is that most of the key account managers still did their best. That is, to defend the company and help the customer.
When you look at it from an outside perspective – and having knowledge of pricing, the remedy is pretty straight forward. The big question is how can you build stakeholder engagement in a company and gain C-level support to actually help the sales teams do their jobs? One of the biggest frustrations for pricing professionals is knowing that you can really help the sales effort, but not getting that buy-in or remit.
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