There’s an interesting concept in business and economics called the Pareto Principle, have you heard of it?
The Pareto Principle states that 80% of a business’s output (sales) come from 20% of its input (customers). More frequently, this has become known as the 80/20 rule. This article explains how key account manager skills use this principle to improve company profits.
Why is the Pareto Principle important in this situation? Successful businesses find profitable strategies and concentrate on what works. This means that if 20% of a customer base drives 80% of results, the spotlight should focus on them.
This is where key account managers come into the picture. Key account managers differ from normal account managers in a couple of areas. These areas mainly focus around the size, potential, and strategic importance of the accounts that they manage.
A key account manager works with a business’s most important clients to nurture the relationship and make sure all parties are happy.
Because of this, a key account manager is a highly important for achieving company goals and objectives. They leverage cross departmental communication with marketing, sales, business development, and finance, amongst others.
This all whilst keeping the client’s best interests and goals at the top of the priority list. Read on below to find out more about key account manager skills.
What does a key account manager do?
This section will answer the question: what is a key account manager?
A key account manager focuses on the company’s most valued clients. A traditional account management plan would consider every customer relationship roughly equal. However, with key account management, the focus shifts to clients that are:
- The biggest
- Have high strategic importance
- Have large income potential
For example, a small company could land a deal, where a department of a multinational signs up to their service. There is then a strategic and potential income opportunity for the key account manager that works with the small company. There is the chance to bring in more departments of that multinational.
With this in mind, a key account manager will develop long-term relationships with their accounts. Two of the biggest reasons are:
- Retention: The first is that this one client account makes up a large amount of a business's profits. By losing a key account, the business could enter into a bad financial position. This means that the bottom line could drop and, potentially, the long-term viability of the company could come into question.
- New products or services: The second consideration is the other side of the coin to the previous point. There is potential to get more revenue from these clients. Opportunities for upselling and expanding services should always be in the mind of a key account manager.
The role of a key account manager is to keep the biggest clients happy and develop those relationships over the long term. In a perfect situation, the key account manager would position their business as a strategic partner. This means that the advice they give could lead to more business for both parties.
Account Manager Goals: Think Long Term
When managing key accounts, the strategy is long-term. Other colleagues can focus on short-term gains. The importance of a key account requires a considered, future-proof, approach. If properly executed, this plan can draw in more business than a direct sales department. This is because:
- Customers who already have a business relationship usually spend more and buy more than new customers.
- The insights gained can inform sales teams to streamline processes.
- A satisfied customer is more likely to recommend a business, resulting in more qualified leads.
But what are some day-to-day activities a key account manager will take on? Below, 5 of the most important key account manager responsibilities are outlined. These should all be present in a key manager job description.
Business performance should be the base of a relationship with a client. It’s important to report clearly and effectively how work progresses, what works, what doesn’t, and what the plan is to move forwards. This is all done through regular reporting.
Reporting includes good documentation practices, planning in meetings on a regular basis where needed, and following up on information if required.
A key account manager is the touch point for an entire business. This means that entire teams’ activities go through the key account manager to the client. However, this also works in reverse. The needs of the client pass via the account manager to the correct departments to implement the work.
Managing and prioritizing this workload is essential for account managers.
In business, sometimes things work, and sometimes they don't. A great key account manager is able to analyze the information and data at hand to work out and learn from wins and losses.
This follows on from the previous point. Understanding the successes and failures is the start. The learnings must then apply to plans for the future, to create a strategy that succeeds.
The key account manager is the central point between the two businesses. This means a key account manager has to constantly communicate with the client, their colleagues, and their seniors.
Account Manager Skills
The skills of an account manager can be divided into two categories: technical skills and interpersonal skills. With this in mind, key account manager job descriptions should define each of these.
6 Technical Skills every account manager should have
Technical skills refer to specific knowledge of a subject. This could be knowledge of a tool, a program, or a strategy.
1. Strategic Thinking
A big difference between normal account managers and key account managers is the amount of strategy that needs deploying. A key account manager has to create a long-term strategy that looks past the immediate position.
This involves balancing multiple stakeholders and ensuring the relationship remains beneficial to everyone.
2. Selling Based On Value
Value-based selling presents a product to highlight the benefits a client will get. At every step, an account manager will highlight the value their service offers clients. This is because success over the long term requires a client to understand the value given to them.
Milind Katti, co-founder and COO of DemandFarm, writes on Forbes, ‘The representatives for key customers are looking for a partner who can empathize and help them succeed in their business roles, not a cog who provides what is necessary for the supply chain. When organizations treat their key accounts as strategic partners, the real value of relationships can be seen.’
Here, Katti explains that the more value provided to a client, the higher the chance of getting value in return. This is a win-win situation for both companies in the partnership.
3. Balancing and Coordinating Complex Operations
Successfully run accounts have a huge amount of input from a number of areas. An expert account manager has to stay on top of all the different elements.
This is very similar to how a project manager has to stay on top of multiple tasks. They must balance short and long-term demands, the ability of their team, and a client's needs.
4. A Mind For Business
Key accounts are vital to a business. A key account manager should understand how businesses create profit.
This is for two reasons. Firstly, to identify opportunities to develop their own business’s interests. Secondly, to provide real value and insightful advice to clients.
5. Think Analytically
Alongside an understanding of business operations, an analytical mind is vital to success for a key account manager.
Data is essential in creating a strong strategy that succeeds. Without an analytical mind, the learnings from projects are potentially wasted.
Evaluating data offers an understanding of businesses across a range of industries. This is is important when nurturing relationships.
6. Remote Work Tools and Tech Toolstack
Every business uses a software tool stack to manage clients. These can be remote work tools such as salesforce and Hubspot for CRM, Microsoft office or Google Drive for documentation, and Rock for communication. Already outlining this can help define what practical know-how a job needs.
3 interpersonal skills that every key accounts manager should leverage
To have a well-rounded set of account management skills, interpersonal elements are essential. These are the techniques and ability of a person to interact effectively with other people.
Mastering interpersonal skills is crucial if you're looking into how to improve work performance as a key account manager.
Communication is the most important skill that a key account manager can have.
Understanding what every stakeholder requires and balancing these against other interests is vital. So is explaining situations clearly and respectfully. This communication is in multiple forms, including in-person, phone, video presentation, email, and chat or documents.
An account manager must tailor their communication strategies to the people they interact with. From top-level directors, managers, sales reps, and everything in between. A key account manager must get the correct message across, at the right time and learn to effectively interact with different types of communication styles.
Sometimes teams can work in different patterns. One colleague could have an asynchronous work schedule, another synchronous. An account manager must balance these work schedules, so everyone gets the correct message at the right time.
The final point in this section about communication is very important. Communication is a two-way street. It is about listening to the other side and working towards a solution. This is crucial to keep all parties happy and develop long-term relationships.
2. Understanding of Company and Customer
To properly work with a client over a long-term period, a key account manager has to understand their client’s business in detail. This means having knowledge of how the client operates.
For example, their target customer, current and past strategy, budget, goals, and position within the market. With this level of understanding, it is so much easier to find business opportunities. Both the client and the account manager's company can benefit from this.
This is particularly important because key accounts have to receive a tailored service. A key account manager cannot offer their client a set of pre-built services, they customize the product. To properly create a tailored solution, the key account manager must have an in-depth knowledge of their client.
This could have gone underneath the communication header. However, it deserves a dedicated section because it’s so important.
Negotiation skills are crucial to make sure all the people and businesses involved with the project are happy. Sometimes, a client can have unrealistic expectations. It is important to understand a client's needs and effectively negotiate a more reasonable solution.
To do this properly requires confidence in oneself, timing, and presentation skills.
The Best Platforms For Key Account Managers To Use
So the saying goes: you need the right tools for the right job. This particularly applies to the work of a key account manager. The platforms that they use are vital to delivering an exceptional job.
Below are some of the platforms that a key account manager should use every day.
1. Social media: LinkedIn
LinkedIn is very important to communicate with work colleagues, clients, and potential leads. Furthermore, people with established followings on LinkedIn command a lot of respect. Clients look at thought leadership and understand the value the writer can provide to their business.
LinkedIn also has a Sales Navigator that provides sales intelligence. This is useful for key account managers because it develops new relationships with prospects and clients. With the sales navigator, it is possible to keep up to date with organizations and connect to stakeholders.
2. CRM Tools
CRM stands for Customer Relationship Management. A CRM platform manages, tracks, and improves interactions with clients, potential clients, and qualified leads.
A CRM tool will brings together different elements in the customer experience for analysis. These include:
- Sales Data
- Customer Feedback
This is all compiled to give a detailed understanding of how a business operates and generates leads. You can use tools such as Rock, Hubspot, Airtable or Salesforce to manage client information from a single place.
3. Communications Tools: Rock
As already established earlier in this article, communication is at the heart of success. There are a number of tools to use to improve responsiveness and make communicating with clients and team members much easier.
A key account manager must balance different communication channels such as email, messaging, notes, tasks and files while interacting with stakeholders. Alongside these foundations, apps like Rock, Google Docs and Sheets will help to communicate on specific tasks - both internally and externally.
White glove key accounts management with Rock
There are so many elements involved in delivering a successful project, it is essential to stay on top of them and staying organized at work. This is particularly the case with asynchronous work. Rock is a great way to manage activity on a project.
Break tasks down into clear lists and group them together within related projects. This gives an account manager a clear overview of progress and feedback.Sales teams and key account managers are able to engage with each other directly, with all vital information stored in one place.
Tasks also make it easy to share KPI’s and urgent activities. Rock can bring all stakeholders together in one area to work effectively as a team.
How to Change Client Communication With Rock
Rock doesn’t only cater to internal operations. A key account manager can create spaces on Rock and communicate with clients. This means that internal work and client management are all in one place. Rocks lets you share information, follow-up activities, and performance metrics.
This helps minimize ignored emails and missed calls.
Use Rock To Keep Key Accounts Growing
To return to the Pareto Principle, if 80% of work is completed in 20% of work time, then how can focus shift to make that 20% of effective work time even better?
Every day is different for an account manager. There can be a huge amount going on, including meetings, reports, analysis, planning, and execution.
The variety of account manager skills needed is huge but vital to delivering outstanding work. Both technical and interpersonal skills must be finely tuned. This is to deal with in-depth planning, strategy, and to overcome communication problems.
Rock streamlines collaborating with colleagues and clients by bringing everybody to one place. Client communication can reach the next level by sharing spaces and project overview is a revolution for task management.
To find out more about how Rock can improve the day-to-day of account managers, sign up for free today and focus on that 20%.