Last updated on February 19th, 2024 at 11:48 am
What is KAM?
So what is KAM? Key Account Management refers to a Strategic Account Management approach in B2B sales. Companies identify and prioritise their most important key clients and valuable customers. These accounts known as key customers play an important role in generating substantial revenue. They are typically valuable customers who have a significant impact on a company’s overall success. So lets discuss what is KAM (Key Account Management)?
Key Account Management (KAM) is a framework to build meaningful engagements and business relationships with your key clients to help you drive consistent profitable growth. It helps you maximise customer lifetime value, also referred to as LTV and increased customer satisfaction. So let’s now delve into the details at What is KAM, exploring its definition and the advantages it offers.
Importance of Key Account Management in Sales
Consistent growth in sales revenue is imperative for a business to succeed and function smoothly. This requires an effective sales strategy with a key account management strategy at the core.
The main objective of Strategic Account Management is to ensure customer satisfaction and have a win-win relationship. By understanding the unique needs of key customers, you can provide tailored products and services and create personalised action plans. This approach creates a long term relationship with your valuable customers. Key Account team members are responsible for maintaining these long term relationships. They closely examine the growth potential of the key accounts they are handling and offer products and services at a competitive pricing as part of their Strategic Account Management initiative.
Why do you need a CRM for Key Account Management?
Adopting the right CRM software for Key Account Management is an important decision to manage your KAM process efficiently. The CRM will empower your teams with necessary information required to build meaningful customer relationships, maximize customer retention, and meet your business goals.
So now after learning, what is KAM, let us discuss some of these key benefits in detail below.
Business Benefits of Using a CRM for Key Account Management
Maximize Repeat Sales
Strategic Account management involves having a complete 360-degree view of your clients. A CRM helps you get easy visibility into the client’s past purchases, all client interactions, key stakeholders and decision makers, their business priorities etc. with ease. This will help your sales team members to identify the Key Accounts. Thus by incorporating account planning they can in turn create unique actionable plans by identifying new cross-sell and up-sell opportunities. This enables in increasing the growth potential and to generate revenue from Key Customers. This sales motion is referred to as account farming or mining.
A CRM helps you in tracking all customer issues and taking proactive measures to improve customer service. This will have a huge impact on customer loyalty and customer retention for building long term relationships. Having all customer interactions in one place will help all your team members to be on the same page and deliver consistent customer experience.
Increase revenue per customer
Strategic key account management framework will help your team members to identify new upsell and cross-sell opportunities. This is also referred to as a land and expand strategy. While you may land in to a key customer with a small opportunity, identifying new opportunities to expand customer wallet-share will significantly increase revenue generated per customer.
Acquire New Clients
The robust sales methodology built into the KAM framework will help your sales team to acquire new clients. This is also referred to as hunting. Following the right sales process will help them improve their deal conversion rates and meet their sales targets.
A CRM software will help you significantly lower your marketing and customer acquisition costs (CAC). It will also help you reduce the cost of sales operations through streamlined operations and better collaboration between departments. These factors will directly contribute to improving your profitability and margins.
Higher Team Productivity
CRM plays an important role in helping teams to get their jobs done faster. It can help automate some of the time-taking repetitive and mundane tasks. It enables them to achieve more in less time through effective collaboration.
Better Decision Making
CRM software will give you visibility into all your sales operations, customer information, client interactions, sales activities, etc. This 360-degree view will help you make informed decisions for your business. This could be a combination of both tactical as well as strategic decisions for long term business relationships.
Healthy Sales Pipeline
CRM is an effective tool for your sales team to identify the list of opportunities. It also gives a broader view of your weighted sales pipeline (based on weighted average) using which you can decide if you will meet your sales targets consistently. This enables you to create effective actionable plans for your key customers. And by adopting the right Key Account Management Strategy, you will effectively nurture your deals and improve deal conversions
Accurate Sales Forecasting
Running a predictable business is fundamental to any business. The right CRM will help you improve your sales forecasts to meet this objective. Sales forecast can be either a system generated forecast or it could be a manual sales forecast provided by your sales team members. An accurate sales forecast will help you assess market demand better. It can then feed into your overall operational planning.
For any business operation, one must be able to evaluate past performance to plan strategically for the future. CRM generates automated sales reports that can help you make critical decisions to optimise business performance. It significantly reduces manual efforts, time, and operational costs incurred to meet this objective. At the same time, it eliminates human errors that could creep in while preparing these reports.
Summary of What is KAM & How KAM Relates To CRM?
CRM for Key Account management provides B2B companies with a comprehensive and scientific methodology to successfully manage their key accounts. It is a strategic tool that is required to build a competitive advantage to build customer loyalty and build consistent growth. It is a must-have tool in your arsenal to run a sustainable and predictable business.