top of page

Why Key Account Management Trumps CRM

As we travel the country, we hear time and time again the challenges executives and sales leaders have getting the sales people to effectively use CRM. It really doesn’t matter which system—Salesforce, MS Dynamics, etc. Sales reps resist to some degree and management adds “band aids” and other quick fixes to only exacerbate the problem.

After hearing management vent about utilization of CRM, we ask a simple question, “From a CRM perspective, how are you handling Key Account Management and Client Risk?”

As the picture shows, it is that “deer in the headlights” look!

The bewildered look is usually followed by something like, “I am not sure I understand the question. What do you mean by client risk?”

  • Me: “Are your clients at risk?”

  • C-level executive: “Well… yes. Some are. Some aren’t. Well…I guess all clients are at risk to some degree, right?

  • Me: “Who is at risk? How much are they at risk? Are they close to defection? What actions should you be taking?

  • C-level executive: “Mike, we have dozens of key accounts, that are over $500,000 in annualized revenue. At my level, how could we possibly know outside of sales teams’ general input, the true level of risk with each client?

  • Me: “Do you want to fix your CRM problem, have much improved client retention, improve cross-selling and client share?

  • C-level executive: “Of course, I would. Who wouldn’t?”

If you clicked through and are still with us, you get the picture. The most difficult thing to do in sales is to acquire a new customer. Just consider the following:

It has been said, client retention is the new acquisition. So, if the most difficult thing in business to do is to acquire a new customer, doesn’t it make sense to start your focused efforts on client retention and expansion? We believe it does. Unfortunately, our research shows that nearly 80% of companies do not have a formal key account management program and 97% do not effectively measure client risk.

The reason key account management trumps CRM in a word is: alignment. From a salesperson’s or client services team perspective. Here are just a few examples:

Sales people view CRM as “big brother” creating duplicate work and creating little value for the salesperson. We view that concern as a training and change management problem—but we'll save that challenge for another blog.

Please understand, we are not suggesting you abandon your CRM efforts. We also understand that some organizations have pure “hunters” and have a separate client services team to handle existing customers. What we are suggesting is that you provide your organization with the tools, playbook and processes designed to ensure your people are Advancing the Relationship® and continuing to create value for your customers. Even with a long-term contract, no customer is insulated from your competition. Most contracts are merely a string of 90-day escape clauses tied together.

Below is a sample Monday Morning Report that shows client risk on a weekly basis for your key accounts. Red is near defection, yellow is vulnerable and green is a strong cooperative relationship.

If an organization cannot effectively implement key account management and a client risk analysis in an effort to retain its customers, it is highly unlikely they will effectively implement CRM. Key account management and client risk analysis trumps CRM in terms of return on investment. It is our recommendation you start your CRM efforts with key account management and client risk.

At Butler Street, the “R” and the “E” in our proprietary ClientFirst A.R.E.® methodology focuses directly on client retention and expansion through key account management and effectively measuring client risk. As executives leading our companies, we knew which accounts were at risk and what to do about it. We can have you up and running in as little as eight weeks. Want to learn more? Click ClientFit™ or CONTACT. We’d love to talk with you!

bottom of page