Are your Key Accounts under threat?

What are ‘key accounts’? These are the clients, that if lost, you would mourn. Their loss will have a catastrophic impact on your business.

This aligns with the 80/20 rule*, now leaning more towards 90/10,  signifying that 90% of revenue comes from 10% of your clients.

A frightening statistic.

As such, the assumption would be that you have an ongoing focus on how to ‘protect’ and ‘develop’ these key accounts.

‘Protect’ implies the need to maintain the business and prevent it from moving to a competitor.

‘Develop’ suggests you are proactively, and opportunistically,  helping service all their needs. The old terms would be upsell and cross-sell.  I prefer to say, ‘You have an obligation to be of service and help them with everything’.

Acquiring a new customer tends to be more expensive than retaining an existing one. Studies have shown that acquiring a new customer costs five to 25 times more than retaining an existing one; gaining new customers involves additional expenses on marketing, advertising, sales team efforts, and other resources to attract and convert leads.

A study emphasizing the long-term value of retaining customers by Frederick Reichheld of Bain & Company, and outlined in his book “The Loyalty Effect,” suggests that 5% increased customer retention can increase profits by 25% to 95%.

Another study by Harvard Business Review further supports this notion.

Despite these statistics, key accounts still manage to ‘slip through the cracks’.
Let’s look at what may be the reasons.

Why we are just not getting to the Key Accounts

Just this week, I’ve heard a few excuses why key accounts have been overlooked.

I am too busy with a massive to-do list, putting out client fires,  including several new enquiries
The key account CRM notes are a bit overwhelming, I feel a bit lost about where to start, what to say, and what to do

I talk to them regularly about their orders, so all is OK

I get on well with ‘Sam’, they love us and would never leave us

Poor time management prevents key accounts from being prioritised.
Regular communication gives a false sense of security.
Assuming clients like us and will stay based on perceived loyalty is delusional.
 

Trip-ups to look out for

The One Point of Failure
When was the last time you reviewed and connected with all the decision-makers within your top clients? People leave and move. The security of your top account may be resting with less than a handful of people. If they were to leave, it would be belly up.

You like being busy
People addicted to ‘busyness’ find proactive Account Development a hard slog.
You may like the feeling of getting things ‘done’, answering calls and working through the email inbox; racing around being reactive gives you an adrenalin surge. You feel a heightened sense of achievement and worth by ticking off lists and people thanking you. You are busy doing things, but are you doing the ‘right things’? 

You like to please people
This means anyone needing your attention diverts you from the crucial clients. Despite all intentions of helping that AAA client, you’ve assisted nice guy ‘William from Woop-Woop’, and now it’s 6pm, time to go home. Another day gone to work on the top accounts.

Transactional vs Strategic Relationship
As much as your client contact may be frequent by addressing incidental queries, it shifts into a transactional connection instead of strategically adding value.
When was the last time you undertook a full ‘due diligence’ on your key client’s business, assessing their situation and examining how you bring value towards them achieving their goals.  

We are like-minded and get on like a house on fire
Assuming that shared interests with your client contact equates loyalty can be fatally flawed. Common cultural or sporting interests, do not translate into business allegiance.

You are good at relationships
Overemphasizing the importance of relationships without a strategic approach or commercial underpinning is risky.  Sales bosses used to drum the old philosophy of “form relationships” – encouraging you to dish out business cards, invite clients to lunches and pub drinks.  Never was it said, “add value, be of use, be ahead of them, constantly plan how you can be so useful they see you as as part of their community and an indispensable extension of their business. Protect that account’. 

Salespeople presumed that ‘sales’ was all about rapport, ignoring that selling relied on being commercially minded with a full set of sophisticated communication skills.
 

The top questions to ask yourself?

1. Have you identified your top clients, the decision making individuals and your recent interactions with them?
2. 1.Have you identified your top clients, the decision making individuals and your recent interactions with them?
3. Do your your key clients see you as an integral extension of their business, a respected supplier whom they trust as the Authority in your field, subject matter expert, and solution provider?
4. Have you analysed their current and potential spend?
5. What are the opportunities to secure that potential increase of spend and market share from your competitors?
6. How clear are your CRM notes with clear plans and action steps?
7. What is your short and long term plan to protect and develop each key account?

  
Strategies to  ‘protect and develop’ Key Accounts 

Consider things like

1. Conduct a weekly focus on a specific client
2. Study your client’s playing field: study their website and online presence; understand their competitors and industry trends
3. Utilize LinkedIn for insights and connections.  Who are your key contacts following? What are the individuals or company posting? What mutual connections do you share?
4. Are they going to any conferences that you can also attend? Can you leverage off this to connect and add timely value?
5. Map out a calendar of touch points. Start easy, birthdays, special holidays, conferences, etc. Dialing it up to how you and your business can add value. Maybe create a downloadable pdf of some of relevant areas your client may appreciate insights on?  Can you hold a masterclass?
6. Customise your communication and email engagement. You could adapt your signature with a topical and relevant trusted evidence review.
7. Balance personal and professional engagement with key contacts. When you converse is it all about the weekend, or do you balance it to talk business with a clear agenda of goals and next steps? 

If you are prioritising new Business Development over nurturing the balance of worth of your current accounts, then consider this: you risk losing your top accounts to your competitor’s acquisition plan!

 * Vilfredo Pareto, an Italian economist, “discovered” this principle in 1897 when he observed that 80 percent of the land in England (and every country he subsequently studied) was owned by 20 percent of the population. Pareto’s theory of predictable imbalance has since been applied to almost every aspect of modern life.