Account Management & Account Strategy

Strategic Account Management Best Practices

A crucial component of any sales strategy is building and transforming relationships with existing clients. Selling to an existing account is much more profitable and predictable than trying to win new business.

Here are six key account management best practices that form the foundation of an effective account growth strategy.

6 Strategic Account Management Best Practices

Know When to Designate a Client as a Strategic Account

First, identify clients who contribute a significant amount of revenue to your company. 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 early adopters or organizations that like to experiment and test new solutions.

Don't just focus your account management strategy on "big logos," like Fortune 500 companies or trendy new startups. While working with these companies may bolster your credibility and create some buzz, keep in mind their growth potential.

Many of these organizations can be difficult to work with and highly cost-conscious. While these accounts can boost your profile and marketing, reaching their revenue potential might be too difficult. You may struggle to get the resources needed to grow a true strategic account and increase revenue.

Tip: When thinking about which customers to name as strategic accounts, consider your CEO's opinion. Which clients would they hate to lose? Which clients do they brag about often?

Select Your Strategic Account Managers Carefully

Some sales professionals excel in new business development while others don't. But the opposite also holds true.

You probably don’t want an account manager whose strategy is too aggressive. In this scenario, they may even pester the client or attempt to cross-sell ideas that are not in the client’s best interest.

The ideal strategic account manager should be a problem solver who will be sensitive to the client’s pain points and needs. They must be willing and able to become an expert in the strategic account’s business. This also means connecting the client’s needs to your company’s ability to help. Educating the customer about insights relevant to their business is a major focus for strategic account managers.

The strategic account manager also needs to have credibility and the ability to marshal internal resources when necessary. The manager does not need excessive technical skills. However, they should know when to bring in the right people at the right time. This is critical to an account manager successfully seizing opportunities that can further the relationship with the strategic account.

Click here to learn how to organize internal subject matter experts to add value in client meetings.

The best strategic account managers understand the needs of all key decision makers. This helps to build 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.

Know the Players inside the Strategic Account

Having only one person manage all the relationships in a strategic account can create substantial risk in the account. Building an account plan helps to identify the key stakeholders 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 strategic account manager and they are 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 strategic account manager 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 these programs, senior executives build peer-to-peer relationships with executives in your strategic accounts. This helps fortify the relationship, expedite decision-making, and protects you from changes in executive leadership or company strategy.

Build Dependency

Ideally, you want to become part of the fabric of your strategic account’s organization. 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
• Contractual dependence through multi-year contracts or automatic renewals.

Tip: Sometimes, clients won’t be 100% satisfied. Other times, they’ll hire new key account personnel who introduce new biases and preferences. However, their dependency on your organization allows for breathing room. Dependency makes it difficult for them to sever ties without giving you a chance to make things right.

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.

This action plan involves searching for opportunities to add value for clients, also known as identifying white space. This means helping them save money, make money, or manage risk. Strategic account managers 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. To act quickly on this opportunity, the strategic accounts management team must be ready to respond fast.
• 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 finds out it is entering a new market. They need to hire 100 salespeople in ten different countries. This could be an opportunity to partner with the client and offer them 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 strategic partner. This partner can bring them ideas, help them understand their challenges, and shape solutions that will help them achieve their goals.

Sellers who strategically manage key accounts shape and create opportunities within their accounts. They benefit by mitigating competition, reducing price sensitivity, and building broader, deepen relationships in the account.

Tip: Strategic account managers must possess strong business acumen. Managers can develop these skills, but many require specialized training and coaching. This allows them to become authentic, confident, and effective in the role.

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 planning processes are more fantasy than reality. Many organizations 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 strategic account managers need valid account plans. Additionally, 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 strategic account managers 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.

When executing a strategic account management process, the necessary fundamentals often slip away. There are an unlimited number of initiatives around people, processes, and technology that can help you reach your goals. However, few will be as impactful as establishing key customers as strategic accounts and managing them well.

Before you embark on your next strategic initiative or brainstorming session, ask yourself two questions.

• How much potential exists within my strategic accounts?
• What I need to do to protect and grow these assets?

In the end, strategic account programs will provide consistent, stable revenue to help sustain long-term growth and success for your company.

Key Behaviors Needed for Strategic Account Growth

These skills set the foundation for a great strategic account management planning with established accounts. However, market changes and increased customer demand require more from your sales team and managers. To stay agile, they need effective sales capabilities.

To give sellers a guideline, we've created our Sales Capability Framework, a collection of sales capabilities and sales behaviors that sellers must master to enhance their commercial selling competitiveness. Three key areas make up the framework: Sales Methods, Sales Motions, and Sales Meetings.

Sales Motions refers to the capabilities needed to execute the sales process in creating, capturing, and growing new business. The Strategic Account Growth capability falls within the "Grow" step in Sales Motions.

At its core, Strategic Account Growth means driving account alignment and growth through analysis, strategic planning, and cross-selling efforts. To master this capability, account managers need to develop four behaviors:

• Assess Customer Relationship - Considering the current level of the relationship and the customer's business strategy to identify ways to strengthen and grow the relationship
• Identify White Space - Finding and prioritizing potential opportunities at an existing customer
• Develop Strategic Account Plans - Creating a strategy and the ensuing actions to acquire, grow, or keep a customer
• Cross Sell and Upsell - Establishing and meeting customer needs for additional or higher spec products

By mastering these behaviors, sellers develop a clear understanding of the actions that impact sucess within accounts.

Learn how the Richardson team can help build the skills and strategy your team needs to more effectively manage and grow key strategic accounts. Click here to download our account management training program brochure.