Customer relationships have moved far beyond the typical sales cycle, specifically within the B2B space. Instead of ushering clients into the traditional sales funnel, brands must now focus on bringing top-notch service to their customers at every stage of the journey. But for those companies looking to juggle growing demand and heightened expectations simultaneously, it’s essential to segment their customer bases in order to establish which accounts are most vital to their continued success.
Beyond all else, companies must first acknowledge that it’s impossible to treat all clients equally. Not only would such an approach be taxing on sales and service associates, but it would also put undue strain on the brand’s finances. Segmentation, however, enables leaders to assess and categorize customer relationships so they may provide each client with the attention they deserve.
Segmentation also offers companies an opportunity to improve upon client experience, as associates will be able to deliver superior service to those who need it most at critical points throughout the customer journey. No matter the scope of the company, resources can become strained if associates are forced to devote equal amounts of time to clients that don’t ultimately yield the same level of profit.
Below is a basic account segmentation example:
Tier I: Significant annual revenue and/or strategic value
Tier II: Potential significant annual growth and/or customer
Tier III: Remaining customer accounts
When developing your company’s segmentation strategy, however, leaders must ask the core questions that’ll determine which accounts are essential for future growth:
- What are the customer and the company hoping to accomplish, both separately and together?
- What changes must the company make throughout the organization to achieve this desired level of segmentation?
- What are the benefits behind segmentation and how will the company measure those benefits to ensure everything remains on track?
Forming deeper, more targeted relationships affords brands increased loyalty, sales, and profits, while customers enjoy an enhanced experience that adds value to their bottom line. Exceptional service must be the baseline for all, but leaders need to build upon this solid foundation to preserve and expand their relationships with key accounts. In recent years, Big Data has forced companies to sift through the “white noise” that threatens to cloud their understanding of those they serve. Segmentation, while not an exact science, allows leaders to break customers into manageable groups that promise to add clarity to an increasingly perplexing, saturated market.
Once your company has developed its own solid segmentation strategy, it’ll be easier to determine which customers require key account management (KAM). KAM, as HubSpot defines it, is “the process of building long-term relationships with your company’s most valuable accounts.” While salespeople traditionally focus on the short-term outcomes of customer interactions, KAM values the potential driving current and prospective clients.
Identifying key accounts, however, isn’t necessarily straightforward. Beyond sales, those responsible for key accounts must look toward the future. Thus, KAM must focus solely on those customers that deserve additional time, energy, and resources. Do you foresee your company collaborating with the client on mutually advantageous projects? Are you prepared to offer the client support that goes beyond the call of duty? Are you willing to help the customer overcome challenges and achieve their objectives?
No matter how appealing it might seem, leaders should not choose key accounts solely based on revenue. Worth should be based upon the potential for strategic partnerships as well. Leaders must also limit the number of assigned key accounts to start because overcommitting the company puts their reputation and the reputations of their customers at risk. By starting small, brands can ultimately position themselves as leaders within the given market as they strategically fine-tune their ability to help key accounts excel.
Key account managers are also an integral part of your company’s success. Though it might seem logical to promote your best salespeople to key account managers, leaders must recognize that this role requires special training and skill. These employees aren’t merely trying to sell or upsell to these clients. Instead, they’re responsible for expanding these strategic relationships. They will need to develop an intimate understanding of the client they are working with so that they may collaborate effectively and proactively.
KAM, after all, must become interwoven with the fabric of your brand. It’s not some lone offshoot—it’s an enterprisewide policy. Key account managers must be evaluated using metrics that prioritize the lifetime value of the customer, as these associates are tasked with establishing and maintaining rapport with clients that’ll prove most beneficial to the bottom line of both parties.
Ideally, those heading these key accounts will become so intimately evolved that clients will no longer see them as vendors, but instead as partners who have nothing but their best interests at heart. At this point your brand has moved beyond selling. Therefore, the buyer-vendor relationship has transitioned to the client-partner phase. If clients perceive you as their vendor after you’ve deemed them one of your key accounts, then it’s likely both the company and the account manager have failed to convey the client’s worth.
In general, vendors are seen as companies that aim to sell products and solutions even when they don’t satisfy the needs of the customer in question. They push their services despite the fact that their offerings fail to address the customer’s specific situation. They neglect to tailor their sales approach to accommodate those with which they seek to do business. Partners, however, are proactive. They foresee challenges and offer solutions before problems arise. They’re reliable and honest. They treat the client with dignity and respect.
Partners, first and foremost, are in relationships for the long haul. They understand that the customer’s success begets their success. Partners know that, to prosper, they must communicate clearly and hold themselves accountable in their effort to lift the client up and never let them down. Ultimately, key account management depends upon services rendered after the sales team has worked its magic. Service has become an undeniable differentiator throughout today’s market, but when it comes to key account management, it’s not just ideal—it’s critical.
About the Authors
Bill Moore is VP of CRMI. He designs and delivers CEM best practices workshops, as well as CEMPRO employee loyalty, training and retention programs, that result in the increasing customer satisfaction, employee retention, and profitability for CRMI clients.
Tony Santilli is VP, Client Services, for Marketii U.S. Inc., where he oversees the activities of the Customer Experience Operations Team and Professional Consulting Group. His in-depth experience as a service team leader and expertise as a sales leader has led to consistent double-digit growth.