Are key accounts those customers belonging to our top sales contributors? How do we develop them without necessarily spending more than they are already demanding? Do they really impact our bottom line?  Ralph, Dasmariñas, Cavite
 
Developing key accounts is one of the major strategies most forward thinking companies pursue to generate a competitive advantage in these challenging times.  As customer-centric companies, they realize that in order to sustain growth and increase customer retention, they need to compete effectively for customer preference as they generate deeper customer insight.  They exhibit high customer commitment from the top down and place customer delight ahead of company interests.  They invest in higher standards of customer service and judge their performance against clear customer satisfaction metrics. Well, I overused the word customer here to emphasize the point.
 
Albeit evidences of success, however, many companies today still adopt a traditional transactional approach in dealing with their customers. They tend to focus most of their selling efforts on product or product features and price.  The business transaction is largely on salesman and buyer level.  These traditional companies do not endeavor enough to have adequate knowledge about who their customers are, what they need and how they can be served effectively. This myopic business outlook of the company is mute testimony to their lack of commitment to enduring customer satisfaction. 
 
What is a key account?They say customer is king and all customers are important. But realistically, a company cannot prudently spread its scarce resources too thinly and still achieve customer intimacy required by those few key customers who contribute a significant share to the business and its long term goals. A key account is where you allocate most of your resources in the belief that they will contribute significant value (i.e. Return On Customer Investment) to the company over a longer timeframe.
 
How do we select a key account? Critical to selecting your key accounts is in how you design your selection criteria.  The criteria must clearly articulate the business drivers needed to execute customer development strategies.  For instance, high sales revenue contribution of a customer may not always be an automatic qualifier if that criterion has little to do with your strategy. In some companies, customer contribution, lifetime value, image, growth potential and willingness to cooperate are more important variables of an ideal key account partner.
 
Know your key accounts by heart. Your company must possess a good level of understanding of who your key customers are. Knowing who they are will help you design a more relevant product and service offering tailor-fitted to their individual needs. Many times, salespeople have very superficial information about their customers because they limit their engagement with the purchasers or buyers alone. Develop good relationships with other key buying influencers in the customer.  Who are they? What is the extent of their decision and influence in dealing with suppliers? Once you gain access to the key people, youneed to develop a comprehensive profileof each account detailing its past, current and future trends and action plans. This is called the customer profile – a detailed document about the customer’s business, which contains basic factual data necessary to fully understand the structure, policies, and motivations of the customer, their business needs, medium to long-term priorities, and the things we need to address with the customer.  Customers wish that you know them by heart so you can serve them better and add value to their business.
 
Developing your key accounts is not a selling activity or program to generate more sales.  It is a strategy your company can employ to forge a long-term alliance with key customers who are your best channels to attaining your long-term business ambitions.  
 
Emilio “Bong” Macasaet III is Partner and Chief Distribution Strategist of Mansmith and Fielders, Inc. (www.mansmith.net), the leading marketing and sales training company in the Philippines.  For inquiries, please email info@mansmith.net, call (+63-2) 584-5858 /412-0034 or text (63) 918-81-168-88.
 
Please also send your marketing, sales and strategy questions to mentors@mansmith.net.