Account Management & Account Strategy
Account Management and Strategy Best Practices
Building relationships with existing clients to transform them into key strategic accounts is a crucial component of any sales strategy because selling to an existing account is much more profitable and predictable than trying to win new business.
Here we look at six account management best practices that form the foundation of an effective account growth strategy.
6 Strategic Account Management Best Practices
SAM Best Practice #1: Know When to Designate a Client as a Strategic Account
Identify clients who contribute a significant amount of revenue to your company, and ask yourself, “If we lost this account, how much would we worry about filling the revenue gap?” If the answer is “a lot,” that client is likely to qualify as a key account. Other candidates that might be designated as strategic accounts include those you consider early adopters or organisations that like to experiment and test new solutions.
Don’t solely focus your account management strategy on “big logos,” such as Fortune 500 companies or a sexy new startup. You may believe that working with these companies will bolster your credibility and create some buzz, but keep in mind that many of these organisations can be difficult to work with and highly cost-conscious. Although they may help raise your profile and improve your marketing, it may be too difficult to make these accounts profitable enough to merit the resources you need to grow a true strategic account.
Tip: When thinking about which customers to name as strategic accounts, take your CEO’s opinion into consideration. Which clients would he or she hate to lose? Which clients does he or she brag about often?
SAM Best Practice #2: Select Your Strategic Account Managers Carefully
Some people are cut out for new business development, and others aren’t. But the opposite also holds true.
You probably don’t want an account manager whose strategy is so aggressive that he or she pesters the client or proposes new ideas that are not in the client’s best interest. The ideal SAM should be a problem solver who will be sensitive to the client’s needs. He or she must be willing and able to become an expert in the strategic account’s business and make the connection between the client’s needs and your company’s ability to help. Educating the customer about insights relevant to their business is a major focus for SAMs.
The strategic account manager also needs to have credibility and the ability to marshal internal resources when necessary. Extensive technical expertise isn’t necessary, but an aptitude to call in the right people at the right time is critical to an account manager's success in seizing opportunities that can further the relationship with the strategic account.
The most successful strategic account managers are also skilled at relating to the needs of a wide range of individuals in the account and building consensus among them.
Tip: Study your best strategic account managers to better understand what makes them successful in their jobs. It is very helpful to use valid, reliable psychographic assessments, along with time and activity studies. Finally, accompany them on some calls to better understand the style and substance of their conversations with their clients.
SAM Best Practice #3: Know the Players inside the Strategic Account
Nothing will put a strategic account at greater risk than having only a single point of contact own all of the relationships in the account. Building an account plan will help you identify all of the key players who influence the need or preference for your solution.
LinkedIn is an amazing tool to help support this activity. If you are linked to your SAM and your SAM is linked to contacts in the account, you will have visibility into these contacts and the ability to connect with them. When people change jobs, they often update their LinkedIn profiles quickly. If you’re in their network, you and your SAM can manage the situation proactively.
Tip: It’s important to identify potential buyers and strong influencers early. One way to accomplish this is to establish executive sponsorship programs in which your senior executives build peer-to-peer relationships with executives in your strategic accounts. This muscle helps fortify the relationship, expedite decision-making, and protects you from changes in executive leadership or company strategy.
SAM Best Practice #4: Build Dependency
Ideally, you want to become part of the fabric of your strategic account’s organisation — in other words, you want them to be dependent on you.
This dependence can be built in many ways including operational dependence through channel partnerships; technological dependence through systems integration, business dependence through special terms and financing, and contractual dependence through multi-year contracts or automatic renewals.
Tip: Sometimes, clients won’t be 100% satisfied, or they’ll hire new key account personnel who’ll introduce new biases and preferences. If they’re dependent on you for their business, however, it will be difficult for them to sever ties without giving you a chance to make things right.
SAM Best Practice #5: Provide Insight to Create Value for the Client’s Business
Here’s where you need to look beyond the obvious and seek new win-win opportunities in your client’s business. Developing strategic accounts works best when the strategic account manager takes on a consultative selling role and searches for opportunities to add value for clients by helping them save money, make money or manage risk. Speaking in very simple terms SAM’s can accomplish this in three ways:
- Respond to an Opportunity: In this scenario, the opportunity comes directly from the client, usually in the form of a proposal request. In order to act quickly on this kind of opportunity, the strategic accounts management team must already be set up to respond quickly.
- Shape an Opportunity: This opportunity manifests when a solution is either on the client’s radar or is close to being on the client’s radar, but executive leadership has not had time to develop an initiative around the opportunity. For example, a client company learns it’s breaking into a new market and must hire 100 salespeople in ten different countries. This could be an opportunity to partner with the client and offer them various solutions to assist with this effort.
- Create an Opportunity: When the account is too busy or overwhelmed by challenges to give innovation and strategic planning proper attention, the client company values a partner that can bring them ideas, help them understand their challenges, and shape solutions that will help them achieve their goals.
Tip: Strategic account managers must possess strong business acumen. These skills can be developed, but many require specialised training and coaching to become truly authentic, confident, and effective in the role.
SAM Best Practice #6: Validate the Plan
Strategic account management is an important job that requires rigor and discipline. Think of it as running a business within your business. Account planning is important to help identify the resources that you need to achieve your growth objectives. And, it is a collaborative process that requires involvement from the client to be valid. Too often, account plans are more fantasy than reality — many organisations go through an annual account planning exercise and then forget to execute the plan.
As a sales leader, you need the revenue from your strategic accounts to achieve your goals. This means your SAMs need valid account plans, and you need to hold people accountable for executing their account strategies. Identify the objectives, goals, and key performance indicators to track progress, just as you would manage your sales pipeline. Make sure your SAMs have what they need to meet their goals and help coach their strategic account teams to success.
Tip: Don’t consider a strategic account plan final unless your client has seen and agreed to the plan. You should involve the client in the process to ensure that the plan is valid and actionable.
It is easy to get distracted from the fundamentals necessary for account management strategy execution. While there are an unlimited number of initiatives around people, processes, and technology that can help you reach your goals, few will be as impactful as establishing key clients as strategic accounts and managing them well. Before you embark on your next strategic initiative or brainstorming session, ask yourself how much potential exists within your strategic accounts and what you need to do to protect and grow these assets. In the end, strategic account programs will provide consistent, stable revenue that will help you sustain long-term growth and success for your company.
Click here to download our complimentary account management training program brochure to learn how the Richardson team can help build the skills and strategy your team needs to more effectively manage and grow key and strategic accounts.
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