In the kitchen and bath industry, most of us depend on repeat referral business from customers. So, how do you maintain and retain your key accounts, and ensure that you maximize your referral potential from these clients?
Just servicing a key account is not going to realize your maximum potential return on your investment. It’s going to take management.
Key accounts could be other allied professionals like architects, interior designers, builders, contractors or other suppliers. But regardless of where the repeat referral business comes from, it’s important to remember that your key accounts are your competitors’ main prospects. Protecting the referral business from your competitors will ensure you are maximizing your profit potential.
Managing your key accounts effectively ensures continued business prosperity. Equally important is the need to find new key accounts to nurture, grow and retain.
IDENTIFY KEY ACCOUNTS
Identify which of your client base is (or has the potential to become) one of your key accounts. By simply applying the Pareto Principle of 80% of one’s sales are going to come from 20% of one’s customers, we can generally identify key accounts. The top 20% of your customer base is also generally going to generate the most return on your time and financial investments.
MAINTAIN & RETAIN
If you maintain an ongoing relationship with your key accounts, adapting to circumstances as needed, you’re more likely to retain these accounts. A few notes on how to position yourself within your key accounts’ relationships:
- Understand your customers’ internal organization. You may have one main contact at your key accounts’ business. It may be an individual architect in a firm or one certain construction building supervisor for one of your contracting companies. Regardless, it’s important to understand what other people you need to develop a relationship with there. If it’s an architectural firm, perhaps there are other staff architects or partners you could ask your contact to introduce you to. Or, if there are other construction building supers working for the construction company, trying to get to work with them on a project just expands your opportunities. Remember, your key contact could leave to pursue other ventures, get fired or retire. Predicting (or protecting yourself from) organizational change is paramount in keeping the account vital. Additionally, expanding your relationships across the departments in your key accounts’ business will ensure longevity.
- Establish a strategic business partner status. If you can outline how you and your company can maximize your customer benefits, you’re on your way to working toward a strategic business partnership. These benefits must significantly outweigh what benefits your competition is providing. By utilizing the correct products and providing superior services, you can build the foundation needed for this partnership, which will benefit both parties involved. Your customers will reap the benefits from what you provide and you reap the benefits of ongoing sales revenue and profit potential. In certain industries, by developing this partnership and your business as the “go to company,” you can reduce or possibly eliminate the bidding process, maximizing your time and return on investment.
- Expand your communication. Be present, accountable and available to your key accounts. Be sure to ask for open lines of communication between your companies to streamline and simplify how the client interacts throughout your process. Try to shorten the sales cycle and/or delivery times. Ask for feedback on what you can do better to maximize your customer benefits. Apply what you learn to finding new ways to maximize the benefits. Find out what’s working and what isn’t, and work to reduce mistakes and increase accuracy and productivity
- Roll with it. Confidently present your product and service offerings and demonstrate how each contributes to your key accounts’ corporate strategy. But be ready for change. With the ever-changing economy and global outlook, change is inevitable. Be mindful of what your clients’ needs are in the moment, and how your current products and services fit these needs. But be poised to make a switch to an alternative product or service if necessary, i.e. you may have a key account that is accustomed to working at one price point but, given the status of economy, may need a more price-conscious product or service. If you don’t have a product or service that fits this price point, you’d better find one. If your key account has to look elsewhere for an option to fill this need, you are putting yourself at risk of losing that key account as a whole.
- Keep your competitors out. Understanding your competition and their products and services will help you maintain your competitive edge with your key accounts. How does your service outweigh your competition? If you have similar products, you have to shine in your service, period. Having alternatives in your product offerings covers all your bases.
DEVELOP KEY ACCOUNTS
It’s always important to have other accounts in development for becoming key accounts. As much as we work to maintain these key account relationships, we all know they can change quickly.
For that reason, you should be spending as much time developing new key accounts as you are maintaining your existing key accounts. So, take a step back and see yourself through the eyes of your key accounts, analyzing your competitive strengths as compared to your competition. Work to develop and implement a key account management strategy and follow that. If you put forth the efforts in maintaining your existing key accounts and strive to develop new ones, you’re bound to have a successful business model that will maximize sales and profit potential.
Bryan Reiss, CMKBD, is an award-winning designer who is President of the Mount Pleasant, SC-based Distinctive Design. Reiss, a 15-year veteran of the kitchen and bath industry, is an active member of the Carolina Chapter of the NKBA who specializes in sales innovations and business stabilization.