Key account management is the development of mutually beneficial relationships between a company and its most valuable clients.
Key account management is a business strategy designed to develop close, valuable relationships with a company’s most valuable clients. A key account manager will be tasked with fully understanding a client’s needs and challenges and identifying where their business can help meet and solve them. In the recruitment and staffing space, this means finding suitable candidates to fill much-needed roles to meet the client’s ambitions.
History of key account management
Management theorist Paul Drucker helped develop the concept of key account management in the early 1970s by arguing that the aim of a business wasn’t just to create customers and clients, but to keep them. In the 1970s and 1980s, this concept was strongly embraced by sales teams within the fast-moving consumer goods sector. Driven by growing globalisation, competitiveness and centralisation, key account management emerged as a major business model in the 1990s in a broader range of sectors – including recruitment. During this time, the model also began to evolve from a transactional, sales-based strategy to one more rooted in nurturing and managing long-term relationships with clients.
Recent trends in key account management
During the Covid-19 pandemic, it became easier and more acceptable to conduct business relationships through digital channels such as Zoom or even Whatsapp. This trend has caused many companies to realise that both time and money can be saved by having fewer and shorter face-to-face meetings. Key account managers have had adapt to and mirror this behaviour. For both customers and clients, key account managers are now expected to be able to respond through digital channels and maintain and nurture personal relationships more remotely.
Data and analytics
Key account managers are using data analysis to help clients identify new business and growth opportunities, meet talent demand and future targets, track recruitment and retention performance, and assess risks such as economic or sector threats. As insights into the recruitment and talent landscape of a particular industry can be crucial in developing relationships and new business, data and analytics should not be overlooked.
The job market remains in-flux post-pandemic as remote, hybrid and flexible working continue to grow and employee churn rates remain high amid trends such as the Great Resignation and job ghosting – the latter referring to candidates skipping interviews or newly employed candidates not turning up on their first day of work. Key account managers that can respond quickly to such situations and find the talent required, either on a contract or permanent basis are vital.
In recent years, there has been growing need for key account managers in the recruitment sector to increase collaboration with more of the client’s internal teams. Instead of just developing and maintaining relationships with the human resource or personnel department, key account managers should reach out directly to, and understand the needs of, individual departments within one company such as operations, sales, customers service, manufacturing and more.
Advantages of key account management
- Key account management helps companies retain their most valuable clients and reduce churn.
- Key account management allows companies to better understand a client’s recruitment needs.
- By offering added value, insight and support, key account managers improve customer loyalty and satisfaction.
- Companies can use the learnings generated from key accounts dealings across the entirety of their client base.
- According to a survey by the ABM Leadership Alliance, companies using a key account management approach generate 208% more revenue from their key accounts compared to companies without a key account management programme.
Disadvantages of key account management
- An organisation can have too many key accounts, potentially leading to poor communication, engagement and missed opportunities.
- Key account management can lead to increased dependency on, and vulnerability to, key customer demands and performance.
- Key account management may lead to neglect of smaller accounts that might also have long-term value potential.