Although the term Account-Based Marketing (ABM) has been around for many years and it has now become the focus for many companies, there is still some confusion about exactly what it is. At the pinnacle of ABM models is Key Account Management (KAM) known as Strategic Account Management (SAM) in the USA, which is one-to-one customer management. Below this are major accounts that are not quite big enough to be incorporated in KAM, this is ABM and involves one-to-few customer management. ABM is becoming increasingly popular and in 2018, this trend towards ABM has accelerated.
Major customers are becoming increasingly important to the profitability of organisations, which is why each one is frequently treated as a market in its own right, and given one-to-one customer management.
If you and your organisation are looking to develop SAM, or ABM, then you can dramatically increase your chance of success by following these six steps:
1. Understand SAM is not sales
SAM is not the same as selling or sales force management you should build long-lasting rapport with your customers.
2. Determine your Sales Accounts — but not too many
Sales Accounts (SAs) will consume significant amount of your overall marketing resources, and so it is important not to assign yourself too many.
3. Prioritise SAs according to needs and potential growth
Consider the needs of every SA and the potential growth of each SA. It’s important to consider the longer-term picture; you don’t want to find yourself struggling to cope with the extra growth and workload in 24 months’ time.
4. Make sure you set realistic SAM goals and expectations
Set goals and expectations that are realistic from both the marketing and the customers’ perspectives. Don’t promise your SAs the world, only for them to be disappointed 12 months down the line.
5. Don’t assign SAM roles to sales people
SAM requires account management people with a deeper understanding of how big businesses — and their SAs in particular — like to operate, as well as effectively control costs and make sure that the goals and expectations are being met within the promised timeframe.
6. Measure the profitability of you SAM portfolio
Our research at Cranfield over twenty years shows that dealing with big, powerful customers often results in a loss-making situation and the supplier is frequently unaware of this fact. Measure customer profitability as well as only product.
The Future of SAM
With the large majority of business regularly coming from a small minority of customers, the role of SAM within wider marketing operations is more crucial than ever before.
By following the tips above, marketers can avoid creating self-destroying SAM policies that are unknowingly doomed from the start, and instead can maximise the potential of each SA by developing important long-term relationships that ensure growth in sales and profits while keeping a focus on profitability, resulting in increasing shareholder value added.