What is a key account?

What does key account mean

Key account means a customer singled out for special treatment because losing or growing it would noticeably change your business. The term applies to customers you already have; prospects you are pursuing are target accounts.

Strategic accounts is often used interchangeably. Where a company uses both, strategic accounts are typically the smaller set at the very top, run with senior executive involvement.

What makes an account a key account

An account becomes key when it scores high on criteria your company has agreed in advance. Writing them down stops the list from becoming whoever shouts loudest.

• Revenue today, and how much of your total depends on it.
• Room to grow: other teams, regions or products the customer could adopt.
• Strategic value, such as a reference brand or a foothold in a new industry.
• Relationship depth: access to senior people and several active contacts.
• Cost to serve, so that a demanding but unprofitable customer is not mistaken for a key one.

How does key account management work

Key account management works through an owner, a plan and a rhythm of reviews. The owner, often a key account manager, is responsible for the whole relationship, not only renewals.

The account plan follows from the criteria: it records the customer's goals, the people involved and what each cares about, risks to the relationship, where you could add value next and the actions for the coming quarter. Regular reviews with the customer check the plan against what is happening.

How many key accounts should one person manage

One person should manage only as many key accounts as they can know in depth, which means a handful rather than dozens. If every account is key, none of them is getting extra attention.

Revisit the list once or twice a year. Accounts move up and down as customers grow, change direction or stop fitting your plans.