Why would companies increase their costs and decrease their margins? Sounds counter-intuitive, right? But companies do it every day in the interest of serving their best customers. They establish “key account” programs that provide additional dedicated resources to top customers (which increases their costs) while at the same time offering those same customers their biggest discounts (which decreases their margins). They do all of this, of course, in the name of increasing volume.
Key account programs are absolutely worth having, but the questions many sales leaders are asking are, “How can we do this better?” and “What do the best key account management programs look like?” Done right, better key account programs can obtain more customer volume at lower discounts while not adding to costs. It all comes down to the behavior of the key account managers.