By: Kyle Johansen
We began this three-part series by discussing the importance of using account management to scale your business. To expand on that point, this article will talk about the importance of having a strong account management strategy.
One of the main differences between extraordinarily successful companies and everyone else is effectively leveraging account management frameworks and best practices to ensure sustain customer satisfaction of retention.
Your key accounts are the customers that you cannot afford to lose. Account management strategy is how you keep those customers happy and find new avenues of mutual growth. This article will discuss how to form your own account management strategies, and walk you through a framework for success.
What is account management strategy?
Strategic account management is essential to virtually any business. Its sole purpose is to take your most valuable customers and make them even more impactful on your bottom line. Without an effective account management strategy, the growth of your business will most likely stagnate.
The role of a Key Account Manager is to have the pulse of every one of your clients. The KAM must be able to identify which customers are essential while keeping an eye on accounts nearing the cusp of “key” status. Once the strategic accounts have been established, the KAM must put into place an action plan for growing those relationships, as well as each other’s bottom lines.
The goal of account management strategy, or key account management, is to identify growth areas, weigh threats from competition, and identify obstacles to overcome. For a Key Account Manager to be successful, they not only require the correct tools, but they also must inherently possess excellent account management skills.
The account management framework
There are four key pillars of any account management strategy. These are:
- As the basis of any strategic business partnership, growing your relationship with the client should take center stage.
- The client’s business plan. Your client’s business objectives and strategies for growth should be at the heart of your account management plan.
- Your goals for the account. A client is identified as “key” because you have lofty goals for what can be achieved. Here is where you attempt to determine the future value of the account.
- Your strategy. Now you get down to business and describe what it will take to achieve those lofty goals.
Let’s dig into each pillar now.
Just as building relationships is the backbone of account management, strategically mapping them out is the basis of account management strategy.
To begin, outline each customer stakeholder. These are the people that will make or break your plans for the customer. If you build and maintain relationships with them, your business should proceed smoothly. However, if they are neglected, these are the same people that may derail your future plans due to a lack of trust.
Take note of at least four critical characteristics for each stakeholder:
- The person’s title
- Their role in decision making
- The amount of contact you’ve had
- How receptive they are to your business relationship
Don’t be afraid to try various outreach and relationship building techniques on your key account contacts. Becoming a close contact, and even an extended part of your client’s team, means communicating and interacting with them in the manner that best suits their workflows.
2. The client’s business plan
One of the essential components of strategic account management is unearthing mutually beneficial business opportunities. And to know what is best for your client, you must know their business inside and out.
A simple way to begin this process is by creating a SWOT analysis, which outlines a company’s strengths, weaknesses, opportunities, and threats. But while a SWOT analysis is a fine start, a deeper level of research is required for your key accounts.
While you don’t necessarily need to see their complete business plan, it’s helpful to interview your clients about the inner-workings of their company. Who are their most important clients? How do they make money? What is their messaging and marketing strategy? What are their long term goals?
All of this information will help you tailor your account management strategy to your clients’ needs, which helps to embed your service or product as a must-have solution.
3. Goals for the account
Begin with how much the business is currently worth to you and how much you believe it could be worth. Account for everything related to potential won or lost revenue, including missed opportunities and promising prospects.
Once you have established your goals for an account, outline a plan to achieve your objectives. The outline should focus on short, medium, and long-term goals, establishing a clear owner for each.
When this is completed, you will have established a roadmap for achieving long-term goals with a strategic customer. From here, you can periodically check in with those responsible for each part of the roadmap, and pivot your approach as needed.
4. Your account management strategy
While each of the first three fundamentals are essential to your account management plan, the final aspect, your strategy, is the most vital.
Now that you have established your account management framework, it is time to break down how your team can execute the plan. This is the most critical point of the account management process.
Break your account management strategy into SMART goals with short, medium, and long-term action plans.
To ensure that people stay accountable, be specific about what needs to be done and who has ownership. No matter how good your plan sounds in a meeting room or on a Zoom call, your efforts can be wasted entirely without clear direction and a system of accountability.
To execute your account management strategy, a variety of objectives will have to be managed. The KAM in charge must be a leader with exceptional account management skills, and an ability to keep team members and stakeholders aligned at all times.
Now that we’ve talked about a standard account management framework, let’s look at some best practices.
What are some account management best practices?
Four must-know account management best practices include:
- Knowing your accounts
- Selecting key accounts wisely
- Investing in your team
- Knowing your competition
Let’s dive into each account management best practice now.
1. Know your accounts
The only way to effectively prioritize key accounts is to know every one of your customers inside and out. Knowing your accounts goes beyond knowing their numbers and understanding their strengths and weaknesses. It also includes knowing each of the important stakeholders of your strategic accounts.
Your strategic account manager cannot be the only point of contact between your company and a key customer. Because what happens if your point person leaves the company? Start establishing connections with stakeholders in your strategic accounts to strengthen the current relationship and guard against any future instability.
LinkedIn is a great place to start connecting with these stakeholders. However, if you are serious about knowing your strategic accounts inside and out, you will need to invest in essential account management tools to streamline the process.
Keep track of each meeting between the account team and client stakeholders. This is known as the strategic account communication matrix. Having visibility into each session will make you aware of whether you need to increase your communication with a client.
2. Select key accounts wisely
It is crucial that you selectively choose your key accounts. You will be spending considerable assets planning and executing your account management strategy. Just as you cannot afford to waste that time on a non-key client, you also cannot afford to ignore an account that deserves your attention.
You must develop stringent criteria for determining what constitutes a key account. Establishing the correct standards will be an essential aspect of your account management strategy. It should be checked and double-checked at the highest levels.
Once you have established the criteria for selecting key accounts, you should continue to periodically review each metric to ensure its validity. Whether it is quarterly or annually, schedule a recurring meeting to go over how you determine key accounts.
Keep track of the accounts that nearly make the cut but do not qualify as key. Your team may want to begin allocating additional resources towards your most promising prospects in anticipation of future growth.
3. Invest in your team
Investing in your team means not only building a group that you can work with and trust, but it also means providing them with the proper tools.
We have covered how important it is that you use the correct criteria to select your key accounts. The only way to determine those criteria is to take advantage of account management tools. With the right tools, a key account manager can be exponentially more effective.
Managing and executing an account management strategy takes collaboration and constant communication from team members. Investing in a robust CRM is a starting point, but you should also continually reach out to key account managers to ensure that they have the tools necessary to execute your plans.
4. Know your competition
One final area where strategic account management tools can benefit you is when analyzing your competition. Knowing where your strengths and weaknesses are in comparison to your competition is one of the many aspects that will determine which customers to invest in and how to go about it.
With the right tools, you can compare your customer spend against market share and determine whether it is time to pivot or double down.
Use repeatable account management processes
Strategic account management takes place only after hiring the right people and putting the proper systems in place. Here are a few ways to help instill best practices into your account management process.
1. Deeply research your accounts
The more you know about your clients, the better you can appeal to their needs and grow your business together. Someone on your team should be combing over every detail related to your client’s business, industry, and primary needs. This research should look like a SWOT report on steroids, and it should be uploaded to software that is visible to the entire team.
2. Discover needs-based deliverables
Using the deeply researched reports, you will uncover the primary needs of each customer. This is where your team discovers how those needs will be fulfilled.
3. Turn your deliverables into a proposal
After assigning ownership of those deliverables, your team can create a proposal with which to surprise your client. This kind of attention to detail goes above and beyond your client’s expectations and can be a building block of a growing relationship.
4. Have internal systems in place for reporting
Executing an account management strategy is only possible when every team member is being held accountable. The easiest way to do this is to have a repeatable schedule for meetings and reporting.
5. Never neglect a relationship
Systems must also be in place to ensure that you are stoking the flames of each relationship you have with key accounts.
As you can see, a strong account management strategies comes down to using the right frameworks, best practices, and processes to create and maintain strong relationships with your clients. Understand their needs, and implement a strategic approach to account management, and you’ll reap longterm growth from your key accounts.