Establishing excellent client relationships is one of the cornerstones in building a thriving business, but achieving that can be a daunting task on account of how stiff competition can be and how difficult it often is to constantly keep clients satisfied.
Company leaders undoubtedly understand how vital their best clients are to the success of their business, and have likely brainstormed countless ways to retain them despite the constant efforts of their relentless competition. How can they manage such a task, you ask? It all boils down to one concept – a process known as account management.
Recent research by consulting company Gartner showed that only 8% of leaders considered their account management programs effective, so companies are almost always looking to improve in that aspect. In this article, we’ll help you better grasp the concept of account management, the different roles an account manager assumes, and some of the more popular account management strategies that many successful businesses integrate.
What is Account Management?
To put it simply, account management is the process of a company maintaining satisfactory client relationships by ensuring good communication and support while continuously looking for ways to improve the connection. Its intent is to improve customer loyalty, maximize retention, and boost the client’s usage of a company’s product or service.
It’s not a short-term endeavor, by any means, and requires a lot of time, effort, and foresight to achieve. A company will have to slowly and organically build trust between itself and its clients, which is usually garnered through rapport, exceptional customer service, and assistance in meeting goals.
If successfully attained, this will result in a satisfied client that’s a lot more likely to stand by a business and its products or services. In fact, according to a publication released by the consulting firm Deloitte, happy and satisfied customers are likely to remain loyal to your company for five years or more.
They are also more likely to spend over 140% more on your products and services compared to customers who have had a negative experience. This can give you a good idea about the importance of fostering good long-term relationships with your company’s leading patrons.
Phil Jesson, a global speaker, consultant, and coach in key account management, backs this up with some of his interesting insights. We’ll dive into the basics of key account management and its difference from account management later on. Nonetheless, here are a few of the things he teaches that have shaped the business industry throughout the years:
Clients aren’t as loyal these days and are a lot less likely to stick with a company that simply meets expectations. Customers now naturally expect businesses to go beyond the standards they set across all the processes involved and seek added value around every corner.
Clients are after more than just well-priced products that are efficient or effective. They seek companies that can help them minimize business costs, as well as boost overall sales, and improve their business in various other facets.
Companies nowadays have recognized that the best way to exceed customer expectations and retain key accounts is to develop account managers who act like business partners as opposed to just suppliers.
Account management and Customer Relationship Management (CRM) are often considered the same thing, though the term “CRM” sometimes refers to the type of software that helps facilitate account management. CRM software can prove indispensable in certain organizations, allowing their account managers to access all of their account data– like addresses, contact information, and various account metrics– within a single database.
What Is an Account Manager and What Are Their Roles
An account manager is a position in a company that’s in charge of managing the sales and relationships of a specific set of clients they’ve been entrusted with. They’re typically considered part of the sales team and liaise between the business and its clients as the main point of contact, carefully listening to the client’s needs and concerns.
They then work with other departments within the company to accomplish goals, alleviate customer apprehension, cross-sell and upsell, perform account planning, and answer inquiries. When implemented correctly, this sort of relationship cultivation can greatly aid in the retention of clients and usher them towards contract renewals, which is proven to be a far more profitable venture that’s a lot easier when it comes to forecasting compared to acquiring new customers.
According to global management consulting firm Bain & Company, “a 5% increase in customer retention produces more than a 25% increase in profit.” Although this research is old, it has become foundational in creating effective and successful account management programs as returning clients tend to purchase more products from your company in the long run. There’s also a higher chance that they’ll be willing to pay a premium to stay with your business instead of going with a rival and they’re more likely to refer your company to other customers.
Account Manager Skills
Since account managers play an instrumental role in leading companies, they must possess certain qualities to carry out their tasks effectively and successfully. Here are some of the key skills that account managers typically have:
Top-tier communication skills: Account managers will have to constantly communicate with clients and other departments in the business. That being said, they need to be adept at extracting and understanding information, as well as conveying thoughts properly to a wide variety of people.
Multitasking: While this skill is a requirement for most positions nowadays, it is especially important for account managers. After all, they’re the connection between multiple clients and the customer service and sales teams, meaning they’ll have to juggle several concerns and objectives for different customers at the same time.
Strategic thinking: Not only do account managers have to keep their clients’ budgets, goals, and concerns in mind, but they also need to be constantly on the lookout for new trends and competitor actions on the market that could affect the company’s current list of clientele in the future. They’ll need to come up with innovative ways to convince clients to stay with the company long-term.
Negotiation skills: A company won’t always be able to fulfill a client’s requests. It’s up to the account manager to give and take with the client until they reach a compromise that will benefit both the customer and the business while still beating out the competition. They’ll also need to occasionally upsell and cross-sell to clients, convincing them to avail of additional services or upgrade existing ones.
Account managers are not to be confused with account executives, whose role is to make the initial contact with prospective customers and work them into becoming full-fledged clients. Account executives are primarily in charge of prospecting and bringing in new business to the company and spend much of their time honing their sales strategy.
Account Manager Roles
There are various roles account managers have to play in order for the account management program to reach its maximum potential. Keep in mind that these roles don’t necessarily have to be fulfilled by separate individuals, as many account managers are capable of embodying more than one role.
One of the account managers needs to have the innate ability to see new and innovative ways to add value to a client’s account in a way that other people usually can’t. They should also be able to communicate these ideas clearly and positively to clients and work with them to implement plans or come up with new strategies altogether.
Push for Results
Another role is to constantly push the account they’re handling towards maximum growth. These are the kinds of people who are never content with how the account is currently performing and continuously seek ways to improve the client’s business.
This is the person– or group of people– that is responsible for establishing and improving the various relationships within a client’s organization. They are often the sole point of contact between the company and its clients and are one of the major lines of defense against competitor advances. They’re an integral factor in what keeps a client from straying to another company.
Being an account manager isn’t just about building the right client relationships. You’ll also need to create the right connections within the company as well. Collaboration is key when it comes to maximizing the potential of a client’s account and there always has to be someone who can create a trusting connection with the different departments and people involved.
Be Technically Well-Versed
Companies will undoubtedly be faced with clients who have a high level of technical know-how, so it’s important that there’s an account manager who can meet the same level of expertise. That way, clients are less likely to be reluctant towards new ideas and they’ll be more inclined to collaborate on fresh concepts.
Manage the Account from a Macro Perspective
While the other roles are focused on their individual goals, there should be a role that oversees the account from a wider point of view. They’re the ones who need to monitor the different processes and results, as well as craft a thorough action plan for the account and allocate the necessary resources to it.
How Smart Account Management Boosts Sales Growth
Customer service is certainly a crucial part of successful client account management. However, once a client reaches a certain level of satisfaction from a support standpoint, further channeling your efforts on that aspect usually doesn’t result in growth. Sure, it keeps the client content and loyal and boosts the chances of contract renewals, but it does little to further the business between the company and the customer.
The problem is, most companies foster that kind of mindset in their account managers, urging them to fixate more on the customer service aspect of their position. Meanwhile, their objective of improving the account performance becomes an afterthought. Though this ends up being great for account retention, the account growth can eventually become stagnant.
To succeed in boosting sales growth through proper account management, account managers need to focus less on what the company has been providing the client so far, and more on how they can help the client’s account moving forward, whether it’s a small business or a large one.
They’ll need to bring fresh ideas to the table and should be willing to take the risk of pointing out the various areas of opportunity that the client can improve upon. That way, they can work on growing both the client’s and company’s business together.
Aside from improving sales growth, an account management team can be used to strengthen several other aspects of a business. Here are some of the benefits:
Benefits of Account Management
Improve Overall Customer Satisfaction
Whether it’s customer support, delivery times, dispute resolution, concerns about budgets, or any other aspect of a client’s account, an account manager can use the data they’ve amassed to meet and often exceed the customer’s expectations and promptly respond to any inquiries. As a result, you can keep the client satisfied at all times.
Distribute Resources More Effectively
By spending lots of time with a client and meticulously understanding their needs, expectations, and budgets, an account manager can determine which clients have a bigger potential of growth and revenue for the business. That way, the company can allocate more resources to those kinds of customers.
Bolster Loyalty with Clients
Account managers are trained to nurture long-lasting client relationships through open communication and a whole lot of time and effort. They learn the ins and outs of a customer’s account and figure out the goals that they are working towards. These kinds of relationships greatly increase the likelihood of clients staying loyal to your brand, even with the looming threat of fierce competition.
While it isn’t all that expected for an account manager to bring in business from new customers, properly satisfying existing ones could lead to just that. If you leave existing customers with exceptional lasting impressions, they’ll be a lot more inclined to recommend your company if they come across someone who requires the same kind of products or services that you offer.
Account Management vs Key Account Management vs Sales: What’s the Difference?
Account Management vs Sales Account Management
Account management is often considered a post-sales role that entails an account manager being assigned to a specific group of clients for the duration of their partnerships with the company. They’ll be in charge of liaising with these clients, providing them support, helping them achieve their goals, and engaging in upsell opportunities to client accounts to achieve growth. They’re not usually expected to bring in new clients, just work on the ones they have on their plate.
Sales account managers, on the other hand, are expected to perform pretty much everything that account managers do; with the additional task of creating new business. They are supposed to do this with the existing client networks they have on hand and potential ones they come up with through constant research. Additionally, they’re also responsible for monitoring the sales targets of client accounts more thoroughly.
Account Management vs Key Account Management (Strategic Account Management)
Key account management or strategic account management is almost identical to regular account management as they both maintain their existing client portfolio. However, the main difference between the two is those key account managers (KAM) strictly handle the company’s top clients. These clients often require more care and effort, so KAMs generally have fewer names on their list so they can focus on them better.
Lastly, it’s worth mentioning that a key account doesn’t necessarily have to be one of the bigger clients in partnership with the company. A small business is just as likely– sometimes even more so– of being a key account since it’s often easier to establish meaningful and longer-lasting connections with these types of clients and keep them as they grow.
Account Management vs Customer Success
Account managers play a more supporting role towards clients in the sense that they’re the main contact point when assistance is needed and they do all it takes to ensure that the customers end up renewing the service or continue purchasing the product. It’s a more reactive role that focuses on maintaining the existing relationship with the client, with the occasional upsell opportunities to push for account revenue growth.
Customer success managers (CSM) put their focus elsewhere. They fixate on the client’s goals, whether it’s to boost sales, become more efficient, minimize costs, etc. It’s a far more proactive role that’s geared primarily towards ensuring that the clients meet the objective they set.
Account managers will generally be there on standby till you need them and their role as part of the sales team comes into play when the client has already been using the product for a while or is nearing the end of their subscription. Whereas CSMs will actively stick with them every step of the way, making sure they maximize the product. The philosophy here is that if the CSM does their job right, the retention comes along naturally.
Three Effective Account Management Strategies
There are various account strategies that companies can implement in order to improve their business and each of those strategies will produce different results. Here are some of the most effective account management strategies around, some of which have been used by many big names across the globe:
Implement a Key Account Management Strategy
Many large-scale companies have no trouble bringing in a lot of clients, but they find difficulty in maximizing the business they can potentially receive from those clients. Woodard & Curran, for example, is a company that deals in integrated engineering, science, and operation services.
They found value in maximizing their current list of clients but lacked the tools necessary for a focused effort on expanding existing client accounts. To help with this, they tapped a sales training company to help inimplementing a key account management strategy.
Together, they implemented key account management training programs to train their managers in effectively crafting executive relationships and maximizing the value in each of the accounts they handled. They were also able to break down the strengths and weaknesses of the company through a thorough assessment.
By sticking with the process, the key accounts Woodard & Curran focused on saw an incredible 110% increase in compound annual growth rate through a four-year period.
Consider a Customer Success Strategy
While having a strong product or service is certainly important to drawing in customers and so is good after-sales partnerships with clients. But many companies are starting to realize that staying with a customer every step of the way and putting significant effort towards helping them realize their goals can lead to just as much success.
With that in mind, many businesses are adopting a customer success strategy which is accomplished by building experience that has you next to them throughout the entire process.
HubSpot is a renowned software company that leverages this type of strategy exceptionally. They offer an extensive resources section where potential customers can learn more about how the product can meet their needs and provide all the support a client requires once they’re finally on board with the service. They’re also adept at tailor-fitting their product to fit the goals that their clients are trying to achieve.
Here are some of the steps that are taken to implement this sort of strategy:
Draw attention to your company’s brand by creating blogs and ads on social media showing just what you can offer them.
Craft a thorough onboarding process that’s completely transparent to your clients and shows them how your business can help them reach their goals.
Continue to develop your product or service to further meet the evolving needs of your clients.
Make sure to constantly create opportunities to expand the client’s relationship with your company. Feedback is vital for this to happen, so it’s best to continuously ask for input from customers on how you can better your service.
Ensure Seamless Collaboration Between Departments
Bigger companies often integrate different types of customer account management teams within the same organization. It’s crucial that the various managers are properly aligned in service of the clients, along with any other departments that are a part of the customer experience.
Key account managers, account managers, customer success managers, and sales managers should all be on the same page and should each do their part in maximizing acquisition, revenue growth, retention, and loyalty. To do this, a company should create an environment that fosters communication and schedule regular training sessions that develop cohesiveness.
Account Management Case Studies
Case Study 1: Sanofi Shifting Towards a Key Account Management Strategy
Sanofi is a renowned multinational healthcare company that was founded back in 1973. It has gone through several mergers throughout the years and its headquarters are currently situated in Paris, France.
The company specializes in seven major healthcare fields: cardiovascular, thrombosis, internal medicine, diabetes, oncology, central nervous system, and vaccines. In fact, it is the largest manufacturer of vaccines in the world and an ongoing member of the Pharmaceutical Research and Manufacturers of America, Biotechnology Industry Organization, and European Federation of Pharmaceutical Industries and Associations.
With a resume like that, it’s hard to imagine that Sanofi faced challenges in maximizing some of their bigger accounts, which is the reason they reached out to organizational change consultancy Rubica. Together, they utilized a key account management strategy to shift their company focus and behavior towards optimizing their most important accounts. Rubica came in with the following things in mind:
Perform a complete investigation of Sanofi’s current state of affairs in order to find out what needed to be amended to achieve a successful key account management strategy.
Find out the parts of the company where it already excelled and then reproduce that kind of excellence in other aspects of the business.
Engage managers and their team members to figure out how to better support the management teams and the client relationships they form.
Make sure the company leaders are completely aware of the changes that need to be implemented to make the new strategy work.
In just four short months, Sanofi saw vast improvements in its organizational structure, and glimpses of its key account management goal were coming into view. The company as a whole showed a better understanding of what key accounts were and the importance they held towards the success of the business.
There was also a clearer view of how Sanofi would be able to assist their clients in achieving their goals. Furthermore, leaders were better equipped to identify key accounts that were partnered with their organization and key account managers were far more effective at fostering long-term relationships with those key clients.
Here are some of the quantitative results that came after the implementation of a successful key account management strategy:
From the year 2017 to 2018, the business, as a whole, saw a whopping £6 million boost in business operating income.
Over the span of six months, Sanofi’s diabetes medication saw volume growth numbers of 18.6%, 23.1%, and 25.4% across some of its most critical geographical regions, and 2018 year-end research showed that 62% of clients agreed that the company provided a more positive interaction compared to the previous year.
As for its cholesterol drug, it showed a six-month volume growth of 47.4% and 130.1% in certain key regions, with half of the customers noticing a positive change in the way Sanofi interacted with them as opposed to the prior year.
Numbers aside, this switch in approaching key accounts has also resulted in massive qualitative change across the organization, with the various teams now adopting a more holistic mindset. Sales executives were among the most impacted, as they shifted their focus away from the sale itself and towards the customer instead.
Case Study 2: A Recruiting Technology Platform & Its Customer Success Management Efforts
The next case study is by the Customer Success Association, a community that aims to connect and provide you with the most relevant information about customer success. In this research, details regarding the strategies and insights of a fledgling recruitment tech company that developed platforms intended for recruiters to bring in new talent were discussed. No names were disclosed due to privacy concerns.
According to the study, the objective of the company was to create a more personal interaction between the recruiters and their applicants, as well as increase the overall effectiveness of the recruiters themselves. To achieve this goal, they employed a customer success strategy. The customer experience started with a heavy push towards inbound marketing. Like many other companies that utilize this sort of strategy, the company published tons of quality free resources like articles, blogs, and social media posts, driving potential customers to their sales team.
They also got rid of free sign-ups and self-service trial versions. Instead, they required any interested parties to reach out to company employees for a demo request. This allows the company team member to size up the user, only providing a demo if they are deemed qualified as a potential client.
Here’s where customer success management kicks into high gear. The company sometimes opted to give out free trials to promising prospects and even schedule 2-hour long in-person onboarding training meetings if the customer is located in the same area as the company. Otherwise, they push for online training sessions and webinars instead.
From there, they schedule 30-day and 90-day meetings to discuss feedback, reports, and other important information. The company’s philosophy is that the first 90 days make or break a customer relationship, so they put heavy emphasis on their onboarding program and strive to thoroughly understand a client’s objectives within that timeframe.
Once the prospect turns into an actual client, the company provides them with two contact points. First is the sales team for any inquiries related to that area. Second, are the customer success managers who handle pretty much everything aside from that. These are the guys who take care of training, onboarding, discussing new features, business reviews, and just overall support.
Furthermore, CS professionals are tasked with uncovering a client’s needs through the scheduling of regular meetings with the product development division, utilizing a management tool to monitor bug reports and feature requests, and more. By figuring out how a customer success management strategy can best fit their nature of business and target clientele, this company managed to become one of the leaders in the recruitment tech scene.
A stellar product or service and exceptional customer service just don’t cut it nowadays, as an increasing number of clients expect companies to go above and beyond the given standard and demand meaningful, long-lasting relationships in exchange for their continued loyalty.
Most current business leaders agree that focusing a company’s resources on nurturing existing client relationships is better for ensuring long-term revenue as opposed to fixating on driving sales. So it might be the time for you and your business to hop on the bandwagon and start implementing the right account management strategies with the best customer success software.