Key Account Management – What Guidelines Do You Follow?
I work at a small firm that serves around 100 clients each year, with approximately 30 of them being regulars who rely on us for their staffing needs.
We’re currently looking to clarify our criteria for defining a Key Account. Recently, a subsidiary of a previous client reached out to us for staffing support after they started working with a different recruiter. This situation has led to some internal tension, especially since our last engagement with this client was just a single placement three years ago, which our management doesn’t think qualifies for Key Account status.
Does your organization have specific guidelines for managing Key Accounts? We’re interested in developing a policy to prevent any potential issues in the future.
RCadmin
Defining what constitutes a Key Account can be a nuanced process, especially in a small firm like yours. Here are some guidelines you might consider to help establish clear criteria and mitigate any controversies in the future:
Revenue Threshold: One straightforward approach is to set a minimum revenue threshold that a client must meet over a specific period (e.g., annually) to qualify as a Key Account. For example, clients who contribute a certain percentage of your total revenue could be classified as Key Accounts.
Volume of Business: Consider the number of placements made or the volume of services provided to the client. If a client has consistently used your services for multiple placements over time or has a regular engagement, this could warrant Key Account status.
Strategic Importance: Evaluate if the client has strategic importance to your firm, beyond just revenue. This could involve factors such as market influence, potential for long-term growth, or alignment with your firm’s goals.
Long-term Relationship: Look for clients with whom you have built a long-term relationship, as these partnerships are often more beneficial for both parties. Consider clients who show a commitment to working with you instead of testing the market.
Potential for Future Business: If a client’s needs are likely to grow or if you believe there is a significant potential for future placements, this can be a strong indicator of Key Account status. Evaluating their growth trajectory or industry position can be useful here.
Engagement Level: Clients who actively engage with your firm through regular communication, feedback, or strategic discussions may indicate a deeper partnership, which could justify Key Account classification.
Market Position of Subsidiaries: Since you mentioned a subsidiary reaching out, consider the relationship of that subsidiary to the parent company. Their willingness to collaborate may signal a broader opportunity, but keep in mind whether this is a one-off or part of a larger trend.
Formal Agreement or Contractual Relationship: Having a contractual or formal agreement, like a retainer or service level agreement, can also strengthen a client’s position as a Key Account.
Once you have established your criteria, it might be beneficial to draft a formal policy to communicate internally. This policy can include procedures for evaluating and re-assessing Key Accounts periodically, ensuring that they remain relevant as your business evolves. Finally, engage in an open dialogue with your management team to foster consensus on how to best define and manage Key Accounts moving forward.