You are a Solutions Engineer of an aspiring software company. You have a mature product and stabilize your position in the market. Your customers get bigger; you start selling to enterprises. Things are running smoothly.
Imagine that, at some point in your journey, your iPhone vibrates. It’s your manager.
“We decided to launch our first key account. You did a brilliant job over the last year. We want you to be the lead SE for that account. What you say?”
You nod. You don’t know what that means. But it sounds great. Positive. “Yes! That’s amazing. When do I start?”
👉 This blog is about what happens after you say yes.
First things first: What is Key Account Management (KAM)?
Let’s start with what KAM is not. KAM is not just managing a larger account. KAM is its own microcosmos in sales. With own rules, own particularities, and own challenges for SEs.
BCG defines KAM as “an enterprise-wide initiative to develop strategic relationships with a limited number of customers in order to achieve long-term, sustained, significant, and measurable business value for both customers and the provider”.
What does that mean?
KAs are enterprise-wide: key accounts are served by an inner circle of named professionals (the core team) that usually comprise sales, presales, and customer success. Often, the core team is dedicated to this single key account exclusively.
An extended team supports the core team. The colleagues work on more than just this account. For example, specialized SEs or AEs that focus on specific products. The extended team can also comprise functions like professional services, marketing, and partner management.
KAs are strategic: there is the vision to develop a fruitful long-term relationship with this particular customer. In other words, the key account team shall grow revenue on this account in breadth and depth, leveraging a multi-year plan. Members of a key account core team usually stay on the account for several years.
KAs are special: there are only a few Key Accounts in a company. They are connected to a great revenue upside, an existing executive relationship, a first installed-based – and a significant quota.
Why Key Accounts?
The impact of key accounts on a company’s top-line is significant: McKinsey found that KAs contribute “30 to 50 percent of revenue and margin” for many companies. How so? Obviously, it’s less costly to sell to existing customers than acquire new ones. That is especially true in our as-a-service world, where we focus on customer lifetime value (LTV), and the lion’s share of revenue is generated after a first contract a closed.
KAs are special because they provide even more revenue upside. Maybe because you just cover a small portion of their addressable business or are set for further growth, you could both help them realize and benefit from yourself.
Retaining large accounts and keeping them engaged is another goal of KAM. Just maintaining such accounts is an opportunity missed. Instead, such relationships are to be strengthened and intensified. Equally important is addressing the negative risk of such large customers taking their business elsewhere.
In fact, a Gallup study found the following benefits of an engaged KA customer:
Sales experience matters. As every SE knows: knowing your customer impacts sales success. Knowing their industry, their business, their language. Especially knowing their people, the pains of their daily work, and your product’s potential value, which might lift that burden. McKinsey argues that sales experience is of even greater importance to your customers than they admit: sales CX drives 31% of a buying decision.
Key account management is the way to professionalize a company’s enterprise business. Done right, it can be a massive driver for growth.
What does KAM mean for you?
Back to our scenario at the beginning. You accepted the role of Key Account SE. You now have an idea about what KAM is and why it’s essential.
How is your work going to differ from your previous SE role?
- Higher expectations. Since the nature of KAs is to generate significantly more revenue than regular accounts, the sales team carries a respectively higher quota. Higher expectations apply to any type of work to be delivered.
- More stakeholders to satisfy. You will have more colleagues being interested in your account: specialized AEs that would like to sell their specific product to your customer; your senior management that would like to meet customer executives and need to see the needle moving; partners that seek insights from your and would like to team up; many customer stakeholders from various IT and business domains to which you need to connect.
- More orchestration, less doing. You will face many opportunities running in parallel on your KA. You will not be able to support all of them yourself. Like the specialized SEs, you enable your colleagues to drive their specific opportunities on your account as well as they can. That means you need to onboard them to the account by explaining the structure, context, strategy, and customer key players. You coach them on what jargon to use, what customer references to avoid, how to deal with specific contacts.
- More strategic, less transactional. It has been your job to help close deals. Transactions. Now it’s different. Your job is to deeply understand your client’s strategy and your KA Manager’s account vision and sales strategy on a KA. Your job is also to craft a technology and innovation strategy that substantiates the sales strategy aligned with your customer’s strategy. Think of yourself as the account CTO. Such an integrated strategy will lead to a prioritization scheme. All initiatives, opportunities, and activities are matched against that scheme. Everything you do has to support the account vision as prioritized in your system.
- More cross-functional activities. There is no “it’s not my job” on a key account. You will find yourself digging for a lead, presenting a pure sales pitch, researching a support fix for customer success, and supporting marketing activities. Think of a KA as a start-up.
- Longer sales cycles. On KAs, the average sales cycle takes three times as long as on regular accounts, according to Gartner. Often, this is by design. Because you want to identify, discover, and address the unconsidered needs of your customer. Work with multiple stakeholders, educate them, generate demand that might end in a direct sale. This way of selling takes time.
- Fewer guardrails. As you discover strategic initiatives and unconsidered needs of your customer, you will meet many people along the way. The way you work is not facilitated by procurement anymore. You build relationships, deliver insights, earn trust. You put pieces of information together, get an idea where you could add value, work with sales to generate an opportunity. There is no script, no blueprint. Start exploring!
- More buyer roles involved in the decision process. There is no single decision-maker to convince, no single meeting you have to rock to get the order form signed. You will iteratively work with more and more senior executives from multiple domains (usual suspects: IT and line of business). Each set of new faces will require discovery, due diligence, preparation.
If you take the role of a Key Account SE, your job will be much different. Let’s look at what you can do to take this opportunity to pivot to the next level of your SE-self.
How to become a great Key Account SE?
Get yourself into a position to be valuable to your customer. Get an expert. Soak in knowledge about their industry: competitive landscape, trends, economics. Are there industry certifications and learning paths you can take?
Analyze their quarterly reports to understand precisely where they earn money and where they spend it. What are strategic initiatives they announce to their shareholders?
Further reading on becoming an industry expert: 10 Steps to Become an Industry Expert in the Next 12 Months
(2) Build your Communication Cadence.
Build a strong network in all directions. As a core team member, you will work closely with your AEs. Set up a series of regular calls with your colleagues in the core team and the extended team.
(3) Set your Standards.
You will have to achieve goals through the work of others. Specialized SEs, partners, and further functional colleagues might support you going forward. Feel accountable for the quality of work they deliver.
Define the quality standards of presales customer interactions. Any demo, presentation, and prototype should be of consistently high quality. Others might be responsible for the delivery. You determine, govern and execute the preparation lifecycle: from planning, over dry-runs, to presentation and debriefing.
That usually means: take the standards from your broader organization and settle more quality on top.
Further reading on Leading by Example: MindTools – How to Lead a Team Honestly and Authentically
(4) Grow your own customer network.
Your role as a Key Account SE includes complementing your AE colleagues. Develop your relationships with customer contacts to build trust and exchange insights with the customer.
Identify and select with sales those contacts that you are going to cover. Build a stakeholder matrix. Whom are you going to build a rapport with, why, and how will you do that?
Further reading on Account Mapping: Lucidchart – How to build an account map
(5) Contribute your Strategy.
The account plan is your living document that:
- specifies your KAM’s multi-year vision for the account,
- includes strategies to realize the vision,
- and lists prioritized tactics to operationalize those strategies.
Develop yourself into a strong sparring partner for your sales counterparts. Help them identify opportunities from your technological point of view: where are they to today, how do they compare against industry benchmarks, and what can you help your customer grow?
Craft and contribute your technology strategy to the account plan. You might want to work with capability maps: what do they have today, what do they need short-/ mid-/ long-term, what can you bring them?
Further reading on Strategic Planning: Harvard Business Review – 6 Steps to Make Your Strategic Plan Really Strategic
(6) Evolve your Intrapreneurial Mindset.
It takes a village to serve a key account. Think of your company as a pool of skills, knowledge, and experience you can leverage to succeed in your key account.
Introduce the people to the account you need to get a job done in quality. Scout for internal talent, build a relationship with them. Seize the opportunity if it presents itself: get those talents in, coach them to be successful, and celebrate them.
Think of your account as your own company; operate it so that everyone loves working for it.
Further reading on Intrapreneuring: Blog of Gifford Pinchot III
Closing notes: is it worth it?
After everything you have read so far, you might wonder whether the job as Key Account SE is worth the effort. Can I really make a difference on this big ship account?
Yes, you can.
Gartner found that the likelihood to grow a Key Account is the highest when the KAM team embraces a strong focus on discovering, visualizing, and demonstrating value to the customer. That is your sweet spot.
Your AEs need you.
- To build trusted relationships only you can build with your consulting attitude.
- To identify opportunities only you can see with your technical expertise.
- To discover customer pain only you can dig out to with your presales methodologies.
- To make innovation tangible in a way only you can deliver with your demo skills.
Consider this your opportunity to take the next step in your #SEvolution.
About the author: Steffen Mueller is the Founder of Pathfinder Consulting. He supports software companies with strategy consulting and coaching to elevate their presales to world-class. Steffen is a Presales Professional with over 15 years of experience in B2B Software Sales, Go-To-Market Strategy, and Customer Advisory. His expertise lies in strategic presales for global accounts where he is a Principal Solutions Consultant at Salesforce.