Managing Key Accounts Effectively: Strategy, Tactics and Planning

After we have determined the key customer groups and the relevant management persons in charge, how to effectively manage key customers requires certain strategies. This article summarizes how key customer sales can set resource investment strategies, management strategies and tactics for their own customers, as well as account planning methods for the most important key customers. I hope it will be helpful to you.

1. Strategy, Tactics and Planning

Once we determine who the key customers are and who will manage them, key customer sales will determine resource investment strategies, management strategies and tactics for the customers assigned to them, as well as make account plans for the most important key customers.

1. Resource investment strategy

Figure 1 Resource investment strategy

As shown in the above figure, the horizontal axis is potential, which is generally the maximum revenue that our company estimates that this customer can bring to our company. Generally, we only need to consider the absolute value; the vertical axis is the contribution to our company, which must be considered in absolute value. For example, more than 5 million per year is considered a medium contribution; more than 10 million per year is considered a high contribution. However, we must also consider the relative value of the customer itself. For example, the contribution that customer A brings to our company is 10 million, but the potential of this customer is 50 million, so the absolute contribution of this customer is high enough, but the relative contribution still has a lot of room for improvement, so it can be set to medium contribution, which means that there is still a lot of potential to tap.

• Type A customers: They have great potential and make great contributions (relatively speaking, their growth space is basically limited). These customers are often candidates for strategic customers.
• Category B customers: They have medium to low potential but make large contributions, which means they have basically overdrawn the company’s potential and do not have much room for growth.
• Category C customers: customers with high and medium potential and medium and low contribution, that is, customers with great potential who still have a lot of room for improvement.
• Category D customers: These are customers with low potential and medium to low contribution, that is, customers with little room for improvement no matter how much investment is made.

For customers of types A, B, C, and D, our resource investment strategy is as follows:

• The customers that we should focus on improving and investing resources in are Class C customers, that is, those with great potential but still much room for improvement in contribution. We need to upgrade them to Class AB.
• For Class AB customers in the mature stage, we maintain reasonable resource investment. Reasonable investment does not mean a small total amount, but that the ratio of the investment amount to the contribution brought by the customer does not need to be too high;
• We don't need to invest too many resources in Class D customers who have little potential and contribution.

2. Management strategies and tactics

For customers of types A, B, C, and D, our management strategies are as follows:

• The potential of Class A and Class B customers has been basically used up. When it comes to the stable and declining stages of the customer life cycle, the management strategies that need to be adopted are customer retention and remedial measures.
• Category C customers are customers with great room for improvement. They are still in the acquisition and improvement period of the customer life cycle. They are the customers we focus on, and the management strategies we need to adopt are customer acquisition and customer improvement.
• Class D customers are those with little potential and low contribution, that is, customers whose contribution will not be high even if they invest more. We need to evaluate whether they should still be classified as key customers, and the management strategy we need to adopt is to use static management to control dynamics.

Next, I will introduce the management strategies and tactics of key customers. Determine management strategies and select tactics: The following are 5 types of strategies and corresponding tactics:

（1）Customer acquisition strategy

It is a strategy to turn our company's important potential customers into formal customers. This strategy requires first identifying important potential customers and using corresponding tactics to make them buy our products.

Examples of customer acquisition tactics:

• Lead customers to visit cases and companies to make them believe in the strength of our company.
• Carry out technical exchanges to enable customers to understand our products.
• Establish high-level relationships with customers through various channels;
• Communicate more and conduct other product differentiation analysis to gain support from the grassroots;
• Provide favorable conditions, such as capital operation (whether we can provide payment period, whether we can introduce funds for the government), to increase the attractiveness of our company to customers;
• …

(2) Customer promotion strategy

It refers to the strategy of upgrading our customers with low contribution to high contribution customers. This strategy requires understanding the customer's business status and needs, early layout, guidance of customers, strengthening interaction, increasing pre-sales and solution investment in the early stage, participating in the bidding of projects within the year, and making every effort to win projects.

Examples of customer promotion tactics:

• Fully introduce various solutions of our company, communicate and interact more, guide customers' needs and short-term and long-term planning content;
• Understand customer needs and annual budget and plan ahead;
• Fully understand the internal needs of customers (individuals and organizations) and help customers obtain the greatest value;
• …

(3) Customer retention

It refers to the strategy of retaining our high-contribution customers and making them generate continuous income for our company. This strategy requires close contact with customers, the ability to provide customers with overall planning and suggestions, the ability to provide customers with cost-effective operation and maintenance services, and prevent competitors from entering. At the same time, it strengthens after-sales service and improves customer satisfaction.

Examples of customer retention tactics:

• Constantly have new solutions to maintain customers and continuously discover new customer needs;
• Improve service standards and provide personalized services to make customers dependent;
• Provide customers with some free or cost-effective products and services to please them;
• Build business and technology moats to prevent competitors from entering;
• Eliminate the enemies among the clients and unite as many supporters as possible;
• …

(4) Make up for the loss

It is a strategy to gradually win back high-value users who are gradually alienating us. This strategy requires understanding the real reasons why customers are alienating us, formulating a recovery plan, investing corresponding resources to make customers feel our sincerity, and providing more favorable prices and more personalized services.

Examples of post-mortem tactics:

• Dig into the underlying reasons why customers are alienating us and invest resources to solve them one by one;
• Find new supporters within the client and form an alliance;
• Find ways to defuse opposition and act accordingly;
• Introduce new products and solutions to our company and shift focus;
• …

(5) Using static braking

It is a wait-and-see strategy for our customers with little potential and low contribution. This strategy is not passive waiting, but maintaining a certain frequency of contact with customers, understanding the internal changes of customers, and waiting for the opportunity.

Strategy of using stillness to overcome motion:

• Keep in touch with customers and learn more about their future project plans;
• Analyze the reasons for low potential and contribution, and wait for opportunities;
• Provide customers with advice and services within our capabilities;
• …

3. Key customer account planning

After sales have formulated resource investment strategies, management strategies and tactics for the key accounts they are responsible for, the next step is to plan key account accounts for the most important accounts, such as Class A customers and important Class C customers. Key account plans are generally prepared at the beginning of each new fiscal year, and the execution and implementation status must be evaluated every three months to update and improve the plan.

Figure 2 Four main aspects of account planning

As shown in the figure above, key customer account planning can start from four aspects:

1. Industry and customer analysis: analysis of the customer’s industry and the customer’s own business characteristics.
2. Customer priority analysis: Analysis of customers’ short-term, mid-term and long-term priority issues.
3. Human resource analysis and goals: Through enterprise human resource management (ECM), all key people are identified, reporting relationships and influence relationships between superiors and subordinates are outlined, the closeness of relationships between key people, departments and customers, the approval of solutions, the acceptance of prices and the overall closeness are analyzed and calculated, and improvement goals are set. How to calculate the closeness of relationships between key people, departments and customers, the approval of solutions, the acceptance of prices and the overall closeness will be introduced in the chapter on effective management of enterprise human resources (ECM).
4. Opportunity analysis and goal setting: Plan and analyze the number and content of business opportunities that the client expects to incubate, the number and content of business opportunities captured, the contract value signed in the new fiscal year, and the amount of payments received, etc.

Author: Yang Jun, WeChat account: CRM30