10 Steps to Key Account Selection (and Deselection)

10 Steps to Key Account Selection (and Deselection):from The Sales Challenger™ by Rick Karlton
Think to your key account program at your company (a.k.a. major accounts or national accounts program), and see if you can answer these questions:

1. Do you know the value a customer receives by being in your key account program?
2. Further, does your customer know the value of being in that very same program?
3. Does your organization understand the value proposition of your program?

If your answers to the above are murky, there’s a good chance that you may be over-serving customer accounts that have gone stale, and under-serving accounts that have turned red hot.
We profiled TNT’s efforts to solve this challenge by creating a 10-step process that requires certain customer accounts to demonstrate performance requirements to achieve and maintain “key account” status. Here are those 10 steps:

1. Each quarter, valuable customer accounts will get nominated for the key account program
2. Of the nominated accounts, some get vetoed, while others pass the first filter (for more information about how to build a filter, see how see how Square D does it).

This is where it gets interesting.  The accounts that pass don’t go straight into the key account program.  In fact, the process is just beginning…

1. If a customer account gets through that first filter, they get nominated for “incubator” status (a trial term prior to being put fully into the program)
2. This incubator status is a year-long cycle with limited resources provided, all designed to test for partnership potential

A key point to be made here—this isn’t just, “this account looks promising; let’s commit all our resources to this account right away.”  Instead, it more closely resembles, “this account looks promising; let’s allocate some of our resources to this customer and monitor the key metrics to ensure they start tipping in the direction we’d expect.”
The incubation period then results in a second filter which is a review of account performance by a senior executive panel—which leads to one of three possible outcomes:

1. The customer account doesn’t make the cut,
2. More proof is needed, so the customer account goes back for a second incubation period, or,
3. The customer account qualifies for key account status

Then, accounts already in the key account program don’t just get the benefit-of-the-doubt; they’re also reviewed annually by the same executive panel using the same filter.  These accounts are then either:

1. Maintained in the program,
2. Sent back to the incubation period, or,
3. Down-tiered altogether

It’s helpful to look at this relative to common practice.  A lot of members that we work with feel that they do a decent job of nominating the right customers to their program, but are less sure of how they should move customers in and out of that very same program on an ongoing basis. Once they’ve run that initial nomination screen, they’re done, and go after that account full-tilt for better or for worse.
The incubation period described above is what sets a practice like this apart. It provides a mechanism to regularly assess customer accounts based on performance, and provides an avenue to transparently communicate expectations to the customer.
SEC Members, to learn more about TNT’s approach, review the best practice and listen to the webinar replay. Also, visit the Key Account Management topic center to better manage your key accounts.