Once you’re in the fortunate position of having enough customers that you’ve hired another member for your sales team, you need to start thinking about prioritisation. It’s absolutely useless to have your top sales person maintaining contact with the very first account you signed – you know the one, they’re lovely people but they pay you approximately 43 pence per month and don’t really need review points every other week.
Key Account Matrices (KAMs) are a way of visualising data that you have on accounts in order to prioritise your sales team’s efforts. Effectively, it’s a graph divided into four parts, measuring X (Customer satisfaction) against Y (Account attractiveness). This allows you, at a quick glance, to understand which customers you’re at risk of losing (low satisfaction) and which ones you really want to retain (high account attractiveness).
The more information you have, the more useful it becomes. Returning to the first example, if you track which accounts are handled by which member of the sales team, a distressing fact tends to become apparent at start-ups: a significant number of low potential accounts are being handled by your original sales hire. These were the accounts that were, essentially, trial runs; those first attempts where you fast-launched and tried to work the bugs out. They’re paying you a smaller amount per year but still have that direct phone line to one of the top members of your sales team. This takes up time that could be more productively spent on those new highly attractive accounts that they are trying to win.
This is just one aspect though.
The temptation is to think of key accounts in relation to two factors only – earning potential vs. customer satisfaction. This then gives you a nice matrix with the accounts that you want to focus on in the top left and top right corners. Doing this limits the usefulness of KAMs. It’s far better to think in terms of satisfaction vs. attractiveness – and attractiveness will be made up of a number of factors.
Is cash-flow a serious problem at your start-up? You need to be prioritising the accounts that would be willing to pay out as soon as possible. That half-a-million pound contract is no good if it would take place three years from now when your company’s gone in to liquidation.
Want to break into new markets? Prioritising accounts by industry segment or location may be necessary so that you can get that trophy client up, running, and willing to have a case study published about them.
This can all be done by a weighting formula – you’ll have all the information drawn together in a beautifully attractive excel spreadsheet. Want more emphasis on speed of contract? Increase the weighting on this factor to 50% and decrease the other factors accordingly.
Next post: some more details and a few wildly attractive looking examples. If you have any questions in the meantime, feel free to drop me a note <a href=”mailto:email@example.com?Subject=KAM%20Post” target=”_top”>here</a>.