New customers are the lifeblood of every business, which is why lead generation should be one of the focal points of your business strategy.
However, by no means this underestimates the importance of nurturing your existing customers and making sure that they’re happy and satisfied with your product or service, as well as with the overall experience of doing business with your brand.
According to the Pareto principle in sales, 80% of your revenue comes from 20% of your customers. Therefore, you need to identify your key accounts and dedicate a substantial amount of your time to them.
In other words, your job isn’t done once you close a sale – at least if you want loyal customers who won’t churn and singlehandedly lower your revenue and profit.
Retaining your most valuable customers calls for an effective strategic account management approach, so let’s discuss some of the best practices that you can implement and drive growth.
What Is Key Account Management?
Before we tackle this topic, it’s a good idea to establish what key account management is as well as how to avoid failure.
First of all, key account management is a long-term process and not a single action. It requires account managers to identify account growth opportunities and engage in a wide array of customer support and service activities that keep their customers happy and build loyalty.
Due to the scope of their role, it’s not uncommon for account managers to focus mainly on the customer service part of their job and neglect account growth efforts. Besides the very fact that growth activities are challenging and tricky, another factor contributed to such a mindset – companies encourage them to follow the anti-shrinkage system whose primary focus is not scaring customers away by offering them to upgrade their plan or purchase premium features.
It’s not immediately obvious that this approach can be detrimental, but if we understand that it’s oriented not towards encouraging growth but towards preventing the loss of existing business, it’s easy to conclude why this defensive strategy doesn’t work in the long run.
In the following paragraphs, we’ll talk about how strategic account management can stimulate growth and help your business thrive.
1. Understand What Qualifies as a Key Account
Knowing when to promote a client to a key account is the most important step of this strategy.
You can identify these clients by asking yourself a simple question: What would happen if we lost them and how difficult would it be to fill the revenue gap? If the answer is “it would be a big issue, and we’d find it very difficult,” then you know it’s time to designate that particular client as a strategic account.
Besides that, take into consideration companies that are known for experimenting with new solutions and being early adopters, as you can greatly benefit from focusing on them.
However, don’t be seduced by some big names and popular startups, even though having them on your portfolio will definitely boost your visibility in the industry. Such organizations can be notoriously difficult working with and will make you earn every single penny laboriously, not to mention that some of them can be parsimonious.
2. Choose Your Account Managers Carefully
Finding the right person to handle your most valuable account can be challenging.
What you’re looking for is a perfect marriage of persistence and a capability to nurture and cultivate.
On the one hand, you don’t want them to be too aggressive towards clients, while on the other, you don’t need yet another customer support rep.
That’s why you should look for a problem-solver who’s aware of their clients’ needs and connect them with what your company can do to help. This person needs to have a deep understanding of your product or service because knowing different functionalities and use cases is essential for educating clients, and helping them identify their own pain points is crucial.
Given that in larger organizations, a number of different stakeholders are decision-makers, a good strategic account manager should be someone capable of relating and catering to a variety of needs of individuals who are in the same account and bringing them to a consensus.
3. Facilitate the Handoff From Sales
A smooth transition from sales to account management is a crucial and yet frequently neglected step. If you want to build meaningful relationships and trust with your customers, you need to take this step very seriously.
It’s best to use a standardized, scripted handoff and make sure that every customer, regardless of whether they will become a key account, is properly organized and tracked within your system.
Informing your key accounts about what they can expect, for example, how frequently the account manager will touch base, as well as what their points of contact are, is essential for setting their expectations and delivering on your promises. Let them know whether you’ll reach out via email or phone, what they can do in case they encounter a problem, as well as whom they can contact in case they have some concerns, will make them feel well looked after.
4. Build a Detailed Customer Profile
Comprehensive customer portfolios will help your account managers get to know their customers and understand their pain points, needs, and preferences, which is of paramount importance for effective communication.
Start by conducting research on your key account companies and identifying details such as
- Industries and markets
- Roles and responsibilities of stakeholders and decision-makers
- Analyst reports
- Main competitors.
After this, you can assess their needs and pain points. The purpose of this step is not only to offer them the right solution but also to anticipate potential issues that still haven’t surfaced and prepare to address them once they do. Such a proactive approach will allow you to stay ahead of the curve and offer your key accounts what they need at the right moment.
This step will allow you to unearth partnership and collaboration opportunities and create a strategic plan for the next 1-3 years instead of focusing on a 3-12 month sales cycle.
Strategic sales account management is a complex and demanding endeavor. The very fact that it’s a puzzle consisting of so many moving parts that have to be tweaked in real-time, there’s a risk that some critical data and insight might slip through the cracks. And since these are key accounts that you can’t afford to lose, follow these steps to ensure that you follow these best practices.