What is a key account?

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Key account (KA) is the term used to represent strategically valuable accounts for a company. In recent times, identifying and managing KA has become essential for organizations, since retaining these customers can significantly impact a business's objectives.

Therefore, the role of Key Account Manager (KAM ) , or Strategic Account Manager, has been increasingly requested by several companies.

In this article, you will learn what key accounts are, the importance of having key accounts in your company and what a Key Account Manager does. In addition, in this content, you will find tips for managing your strategic accounts in the best way possible.

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A key account, or key account in English translation, represents an account (or rather, a company client) that plays an essential role in the business's strategies.

By strategically identifying key customers, the company aims to ensure that the account remains in its long-term customer base, establishing a lasting and mutually beneficial relationship. As a result, key accounts generally receive a higher level of attention and personalized service from the company.

These actions aim to maintain the business-client australia mobile phone number relationship and the long-term continuity of the account in the organization.

It is worth noting that a key account does not necessarily represent the account with the highest contract value or that generates the most revenue for the company.

The definition of key accounts in a business considers many other characteristics and variables, as the value attributed to the account is connected to what this customer can offer to the business in strategic terms.

How important is it to have key accounts?
The strategy of identifying and managing key accounts in your business is essential to generate engagement with important customers for the organization and retain them in the company. Therefore, creating a KA management program offers many benefits to an organization. Check out some of them:

Increase in business revenue
An account management program can help to significantly increase a business’s revenue. This is possible mainly because the Key Account Manager will be able to offer the company’s products or services using upsell and cross-sell strategies to these customers.

Since engaged and loyal customers are more likely to buy products , the possibilities of increasing the company's revenue with these customers are greater.

More chances of retention
Retaining customers is much more cost-effective than acquiring new ones. A Harvard Business School study found that increasing customer retention rates by 5% can increase a business’s profits by 25% to 95% over time.

Therefore, offering personalized services to your organization's key accounts increases the chances of retaining that account and, consequently, the customer's life cycle within the company.

Increased authority and expanded market opportunities
A key account can also represent possibilities for expanding your company in a certain market and increasing the business's authority.

As we mentioned, a key account is not always the one with the greatest economic value to the company. Sometimes, the account is not the one that generates the most revenue, but it represents another type of value, such as the expansion of your business into other markets.

Therefore, prioritizing this customer can open up strategic business opportunities in other sectors.

Therefore, it is important to define what value you expect KAs to bring to the company , even before creating a key account management program .

What does a Key Account Manager do?
A Key Account Manager (KAM) is a crucial part of a company's key account program.

This professional is responsible for managing the company's key accounts, in terms of business, relationships with the organization and customer satisfaction.

According to Gallup data , 40% of B2B customers who are very satisfied with their account management are also fully engaged with the business. The same study found that when customers are not satisfied, this number drops by 13%.

This data reveals that the role of this professional is fundamental to a customer engagement and retention strategy .

Some of the main functions of a Key Account Manager are:

Identify the company's key accounts : this person must evaluate several criteria to define the KAs, such as revenue generated by the account or how this customer can strategically help the business;
Create customized business plans: to promote the company's products or services, aiming at the growth of the business's KA. Upsell and cross-sell strategies can be used , for example, to increase the account's revenue;
Managing relationships with key accounts : maintaining relationships with the company's key accounts is also done by the KAM. In this process, it is possible to identify opportunities, expectations and needs of the KAs, and ensure that they are met;
Coordinate communication with internal business teams to ensure that KA demands are being met;
Evaluate the performance of key accounts : it is not enough to carry out all the processes above, a KAM also needs to monitor the performance metrics of each key customer of the company, to understand whether the customer is engaged and satisfied, whether the revenue generated by this account is satisfactory and whether improvements need to be made in the management of KAs.
6 tips for good key account management
Thinking about managing your company's key accounts is an essential step to achieving success in the KA program.

Check out some tips for optimized management of key accounts in your business:

Hire a Key Account Manager
You probably already know that a KAM is a key professional in a KAM management program. Therefore, the first step to managing your company’s key customers is to hire a good professional to take on the role.

This person will be responsible for all management and communication with your most important customers for the business, and will help with sales processes and business objectives with the KA program.