A key account is one of your most important customers with whom it is crucial to develop and maintain an added value relationship to improve your business. Banks categorize or segment their customers into various groups for various reasons. I am sure you will agree that some customers, by their sheer size and complexity demand additional time to meet their desired expectations. Account holders who demand extra time and monitoring, mostly due to their type of business operations, are usually charged more and therefore, contribute more to a bank’s bottom-line. Savings and personal account holders are fairly easy to manage as compared to business account holders, groups of companies, conglomerates and multi-national companies. One key point is that despite the differences, all customers must be treated FAIRLY.
Key accounts are the consistent high revenue producers (remember 20 per cent of your customers probably produce 80 per cent of your revenue). They also offer opportunities to increase sales/revenue and are strategically important industry or market leaders. They also offer reduced sales costs because it is cheaper to grow your business with existing customers than to deploy a salesforce to find and secure new ones.
Why A Key Account is Different
Your key account customers differ from your other customers in many ways. Your competitors are constantly trying to win them from you. In the case of corporate accounts, you may find that there are multiple decision-makers and other staff who may influence the company’s business relationship with your bank. It is especially important to understand your key account’s business.
The Expectations of a Key account holder
Their expectations are high. Some of them are very financially sophisticated and expect “an arm and a leg” from you. After all, they know their worth to your bank. Your key account will expect you to be the main link into your bank for all issues, understand its business, market needs and competitive environment, help sell them products/services that achieve their business objectives, add value to the business relationship with your bank by, for example, acting as a consultant on issues not directly related to your main business. Last but not the least, they always expect you to act with integrity and in a professional manner.
The Expectations of Your Bank
From your bank’s perspective, every relationship manager, guided by the branch manager is expected to understand all aspects of the key account’s business, proactively develop more business with the customer, establish strong relationships with the decision makers in your customer’s organization, build a wide awareness of the Bank’s capabilities throughout the key account, handle the key account in a professional manner on a day-to-day basis, and develop a true business partnership with the key account. Once again, the integrity and professionalism aspects are critical to success.
The Dilemma of a Manager
As a manager, you are to be the customer’s “Friend”. Sometimes key customers demand outrageous exchange rates for their foreign currency during international trade transactions. During the negotiations, many managers find themselves being asked by the Bank’s management staff: “Are you for the customer or for the bank?”. Meanwhile your customer is also threatening to take the transaction to another bank! This dilemma is very common and can put branch managers and relationship officers under duress. Management of the bank would not be happy if you lose a key account holder to a competitor. Sometimes, you may face blame games, warnings, and sometimes poor appraisal from the supervisor. That is why managers need to know the customers’ business, the competition and its external environments and regularly send brief call reports to management for an appreciation of the customers’ stand and find solutions to withstand any shock from their decisions.
How to Increase Your Influence
The key to successful relationship management is to increase your influence with the decision maker in your key account. To do this, you must find out who is who in the decision-making process, understand the ‘internal politics’ in your customer’s organization, the network in the key account and so become familiar with the whole organization. One thing a manager or relationship officer should never do is to think that apart from the main customer, (the account holder), the CEO, Board Chairman, etc, nobody else matters in the company. Let me share a true story. A young relationship manager dealt only with the Managing Director of a company. She never bothered to know the General Manager, Finance Manager, Sales and Operations Managers. The other management staff were also key decision makers who exerted great influence in the company’s decisions. She had the rudest shock of her life when she realized that the company had started sending most of their sales proceeds to a competitor.
Apparently, they were not satisfied with the way the bank’s branch was handling their operational account. Returned cheques were not being advised, some SMS alerts messages did not pop up, causing inconsistencies in their balances on their internet banking platform. They felt the relationship manager did not respect them and had therefore managed to convince the CEO to try another bank! This means that the relationship manager did not even bother to know how the company’s account was faring, neither did she even attempt to know the other executives to cross-sell other products like Executive loans, salary loans, etc to them. For such products, you need to know the Finance Manager, Head of HR, Production Manager, not forgetting the Executive of their Local Union. The union leaders are very influential in mobilizing the general staff to meet the bankers for a sales presentation. They sometimes become the bank’s advocates, so do not under-estimate their influence.
Strategic Planning for Decision making
Find out who within your key account is the Decision-maker, who signs-off on all strategies and deals. This varies depending on who you talk to, so ask a few different people within the organization, “Who makes the final decision?” and then decide yourself. Develop a rapport with this person if you can. There are some “Influencers” in the company. They influence the decision maker and have expertise in a particular area – finance, strategy, operations, information technology, and therefore give valued input to the decision-maker. It is advisable to have this person is on your side. In your interaction with other management staff, some may feed you with non-confidential information on what is happening within the company, may suggest business development ideas to you. On the other hand, there are “Against” staff, so watch out! They prefer your competitor’s products to yours… there is one in every company. Try to develop at least a neutral relationship with this person.
TO BE CONTINUED
For more insights on this topic, please book a copy of my new book, “THE MODERN BRANCH MANAGER’S COMPANION” which involves the adoption of a multi-disciplinary approach in the practice of today’s branch management. It also shares invaluable insights on the mindset needed to navigate and make a difference in the changing dynamics of the banking industry. Call 0244333051 for your copy.
ABOUT THE AUTHOR
Alberta Quarcoopome is a Fellow of the Institute of Bankers, and CEO of ALKAN Business Consult Ltd. She is the Author of two books: “The 21st Century Bank Teller: A Strategic Partner” and “My Front Desk Experience: A Young Banker’s Story”. She uses her experience and practical case studies, training young bankers in operational risk management, sales, customer service, banking operations and fraud.