The difference between Key Account Management and Customer Success


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*This was originally published on Synap Software Labs’ blog.

Today’s increasingly complex and competitive business environment, coupled with a major shift in buyer power, has made the need to develop deep customer relationships more important than ever. Congruent with this, the development and maturation of key account management and – in the SaaS world – customer success, are easily two of the most important changes to have surfaced in selling and servicing customers over the last 25 years.

Both functions are unique and, in many ways, radical organizational functions. When thoughtfully implemented, both produce enormous benefits including increased trust, higher lifetime value, and greater profitability to name just a few.

As a business practice, account management takes a number of forms which I believe can be most easily clumped into three buckets: “traditional” account management, key (or strategic) account management, and customer success. Each share a number of similarities and a few important differences.

Account Management

Account Management is generally the “farming” team within a sales organization and is responsible for nurturing long-term relationships with a portfolio of existing customers. Account managers work to understand their customer’s business needs, create plans for how to meet them, and work to increase customer happiness, reduce churn, and generate new sales opportunities. Depending on the kind of business, an account manager is typically responsible for the care and feeding of anywhere from 10 to 25 (or more) customer accounts.

Key Account Management

Key Account Management looks and feels like traditional account management with a couple of very big differences. First and foremost, key account management is only for a small number of carefully selected customers who are of great strategic significance and financial value to the company. As such, key accounts tend to be the largest, most organizationally complex customers a company works with.

Key account managers leverage all of their company’s resources to plan for and create value-based solutions to meet both the customer’s and the company’s strategic goals and drive future growth potential. Key account managers typically only work with three to five accounts and spend a disproportionate amount of their time inside the customer organization working collaboratively on creating value. For companies with truly colossal key customers, KAMs will often only work with one or two accounts.

Customer Success

Customer Success is very similar to traditional account management but with a handful of critical differences. For starters, the foundation of Customer Success is a SaaS industry practice based on driving product adoption, increasing retention, and mitigating customer churn. Put differently, customer success is about fostering loyalty and making happy customers. In many organizations, while the customer success department is tasked with software subscription renewals, it is not responsible for generating new revenue. This is a key difference between traditional B2B account management and customer success teams. Additionally, Customer Success Managers generally have responsibility for a larger number of customer relationships than traditional B2B account managers, but it varies widely based on the type of SaaS products they provide.

For all their differences, account management, customer success, and key account management share the same fundamental goals: to retain, nurture, and grow customer relationships by helping the client get more value from the services a company offers. Similarly, each function is typically built around the same core tenets.

To be effective, Account Management and Customer Success should be:

-Championed from the highest levels of executive leadership
-A strategic, organization-wide priority, not a sales tactic
-Focused on judiciously identifying and segmenting customer accounts
-Support from the top down

Making account (and key) management a central focus of company strategy is such a big deal that it requires buy-in from the highest level, preferably the CEO. Customer-centric organizations rarely struggle to get the c-suite behind success initiatives but we’ve all seen or heard about cases where bottom up initiatives that are popular with the troops get squashed by senior management.

If your company is struggling in this regard, don’t despair! Continue investing time hunting for higher ups across every department who can champion the cause. Your persistence will pay off eventually and you’ll have champions across the company who can help to convince the powers that be of the value of the work.

Strategic, not salesy

Many organizations continue to make the mistake of assuming that account management is just an extension of the sales team. The companies I know that have the most successful account management teams realize there is a major difference between hunting (sales) and farming (account management). Organizations that view account management as an initiative within the sales department are doomed to fall short of their goals. The same thing holds true for companies that view customer success as an offshoot of customer service or technical support. It isn’t!

Every department in a company needs to be in alignment and understand the strategic vision behind account management and what role they play in managing expectations and supporting the customer throughout their journey. Success and account managers are, in turn, not only responsible for quarterbacking relationships, but coordinating efforts internally to ensure that every stakeholder understands what needs to be done to drive growth.

Think small to get big

Many companies allocate too many accounts to too few relationship managers when trying to implement an account management practice. Instead of judiciously segmenting and categorizing their customers and then balancing the assignment of account coverage based on the skill of the account rep and the complexity of the customer, they simply assign account managers a handful of big, medium, and small accounts. Splitting your customers into buckets and assigning a mix of major and minor accounts to different account managers works to a point but is far from ideal over the long-run.

Another area where many companies hamper their own success lies in the way they implement key account management. There is a big difference between your key accounts and everyone else. I consistently find that most companies are trying to service far too many key customer accounts.

Case in point, I was at a conference while writing this piece and listened to a senior executive from a large SaaS company with a 30 person customer success and strategic account management team stand up on stage and claim his company has “more than 100 key accounts.” That’s bonkers. It is simply not possible to have that many key accounts. Think pareto principle. Think small to get big.

So how many key accounts should your company have? Every business is different but I tend to believe that, for a mature company, the number should be somewhere between 15 and 30 accounts with upper and lower bounds of 5 and 50. We’ll circle back to this topic in much greater detail at a later point in the series.

In the end…

In order to be successful in the long run, every company needs to focus intently on the success and profitability of each of their customers. And although it requires significant effort, investing in account management or customer success can have a profound impact your company’s ability to compete and thrive in our ultra-competitive world.

Over the next couple months, my colleagues and I will publish a series of eleven articles on the ins and outs of account management. We’re opening up our playbook and sharing tips, tricks, and tools that have worked for us over the decades we have been building customer-centric sales and account management teams. In the series we will cover everything from how to categorize and select key accounts, to best practices for measuring customer profitability, understanding your customer relationships from the buyer’s perspective, and much more.

In our next piece, we’ll discuss the importance of understanding where your customers are in their journey in order for you to provide them with the right service and support, increase intimacy and profitably manage the relationship. I hope you’ll come along for the ride!

Molly Savage Breiner
Synap Software Labs
Digital Marketer with a bleeding heart. Focus on SaaS, software development and design.


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