This is a list of actionable account management tips.
In fact, these market-proven best practices can help increase sales up to 30%, lower customer churn and predict account risk early on.
So if you want to generate competitive advantage by identifying and keeping your best customers over time, you’ll love this list of tips and best practices.
Let’s get started.
- Identify key accounts
- Set small, smart goals
- Identify measurable KPIs
- Use tools for deep customer knowledge
- Create an account roadmap
- Focus on customer improvement
What is account management?
Account management is something of a master key to business growth. Specifically, it is a post-sales system for nurturing long term and happy relationships with existing customers. An account manager has the critical job of picking up after sales and delivering on three main goals: retaining the clients’ business, strengthening relationships and growing revenue.
When account management is done right, businesses grow: companies are up to 50% more likely to win business with loyal customers than with new leads. Everything from growing existing partnerships through upselling and cross-selling and long-term contract renewal, can depend on how well accounts are manage.
So, let's take a look at 6 best practices for successful account management.
1. Identify key accounts
The foundation of effective account management is knowing how to identify key accounts. This means you want to identify those customers who offer you the greatest potential and can bring the most value for your business over the medium and long term.
You have probably heard of the pareto principle (or the 80/20 rule) that proposes that 80% of a company’s profits come from 20% of its customers. While this ratio will naturally vary it is vital to focus on the few key accounts that have a high potential net worth or lifetime value to your business.
First, look at all your customer accounts to determine profitability vs revenue. What is the account’s annual revenue for the last three years? What was the annual cost of servicing the account over the last three years? And lastly, what is the growth potential for the next three years?
Then look at your own growth strategy and identify strategic accounts whose needs, goals and strategy align with your own. What are you trying to achieve over the next three years and what kind of products and services will you be providing?
Selection criteria for segmenting key accounts could be product fit, solvency, purchasing history, revenue potential and cultural fit. Choosing key accounts that align with your own business strategy is the best way to achieve stability and success over the long term.
2. Set smart account management goals
Setting effective goals is setting yourself up for success. But while big, long-term goals and high standards are important for your business, they could set up your account managers for failure. Instead, focus on setting small, achievable goals and break bigger goals down and work towards them systematically.
So instead of giving your account managers a huge annual or quarterly goal, work with small milestones that tie to the ultimate big picture objective. For example, if the main goal is achieving breakeven, this is what small account manager goals could look like, according to Ambition.com:
First 30 Days Goal - Complete all company onboarding and sales training.
Day 60 Goal - Close first deal with assistance of sales manager.
Day 90 Goal - Close first deal solo.
Day 180 Goal - Generate enough sales to break-even on salary.
Day 365 Goal - Generate a 100% ROI on salary for the year.
The SMART goals framework can help you determine smart goals for account managers. SMART goals are established using a specific set of criteria that ensures your goals are attainable. The acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
The main idea about SMART goals is to give your account managers objectives and targets that are very clear and specific. It takes the guesswork and generalities out of the equation and makes it that much easier to track progress and identify missed targets.
3. Identify measurable KPIs
Your account management efforts should be focused on three main objectives: retaining customers, strengthening relationships and growing revenue.
With these larger goals in mind, you will identify the specific measurable objectives that determine success in those areas. Those objectives help you decide which KPIs make most sense for your team to track.
The Brooks Group put together a great list with examples for account management KPIs you should be tracking. Here are the essentials:
Account management KPIs for Retaining Customers:
- Retention Rate - Percentage of expiring contract renewals vs dropoffs (for subscription business models)
- Customer Churn Rate - Percentage of customers who cancel their contracts or fail to renew them
- Customer Satisfaction Score – How satisfied customers are with your product or service (you can use client surveys to track this metric)
Account management KPIs for Strengthening Relationships:
- Strategic Calls – Number of calls made to offer best practices, strategic advice, consulting, etc.
- Strategic Emails – Number of emails sent to offer best practices, strategic advice, consulting, etc.
- Outreach Engagement - The number of times a customer responds to account management outreach, such as calls and emails
Account management KPIs for Growing Revenue
- Customer Upsell Revenue - Revenue obtained via upselling
- Customer Cross-Sell Revenue – Revenue obtained via cross-selling
- Contract Extension Revenue - Revenue gained from contract extensions
4. Use tools for deep customer knowledge
For a customised account management process it is vital to give your account managers the right tools and platforms for deep customer knowledge. A customised process with personalised onboarding, feedback and support demonstrates your level of commitment to your customer.
If you can get your customers to stick with your company, then your chances of building a thriving business are high. But customer churn is a huge issue for many companies and has a big financial impact.
Try to avoid customer churn as it will cost you 16 times more to bring a new customer up to the same level as an existing customer. An account management tool that monitors churn rate across your base helps to identify and mitigate at risk accounts.
Managing accounts means keeping track of a lot of information and interaction. A CRM like Salesforce can make this easier by gathering data about customers as well as store key interactions with them. It is a data repository that perfectly categorizes accounts and significantly facilitates overall business processes on a day-to-day basis.
Salesforce Essential is the best account management software for sales and support. Its features include contact and lead management, guided onboarding, email tracking, and performance reporting. It enables account managers to put all their essential customer information in one place.
5. Create an account roadmap
Creating an account roadmap will give you a clear overview of your strategic tasks and milestones and will help you define a long-term plan for reaching your goals.
Here’s what that process could look like:
Based on your first meeting with the customer identify the best strategic opportunities and decide which management model to follow. There are several different models for managing and optimizing client relationships and you might even find that a hybrid model works best for you.
Agree on systematic and regular practicalities that will define how to follow service and develop partnerships. These include meeting practicalities (operating meeting, steering meeting and strategic meeting).
Once you have agreed on what you want to achieve, polish and design the account roadmap to present it to the customer. It should include things like strategic recommendations (potential partnerships), specific long-term goals and short-term benchmarks. This account map should constantly be updated over the customer life cycle.
6. Focus on customer improvement
Keeping your customers satisfied with your product or service is non-negotiable. According to Gartner “88% of account managers agree that servicing accounts above and beyond customer expectations is the surest way to grow an account”.
But a survey that Gartner did among B2B customer stakeholders found that product success and service does not drive account growth. High levels of customer service increase the likelihood of customer retention but have no statistical or meaningful impact on growth.
Analysis shows that the leading driver of growth within existing accounts is actually customer improvement.
Customer improvement score (CIS) is a metric that represents the extent to which customers believe their relationship with the supplier improves their business. By tracking account health and viability, account managers can better determine where to direct customer improvement efforts and emphasize the future benefits of the commercial relationship.
image source: Gartner
The opportunity for almost 50% account growth comes primarily from customer improvement, as shown in the fourth column.
Your account managers must understand the customers’ business objectives, long-term and immediate goals for the partnership, success KPIs and challenges with your product/ solution. Make sure that your teams are customer obsessed, offer personalised insights and improvement opportunities.
Conclusion: Prioritise your key accounts, or you will have none
Account management is your effective strategy for retaining business, strengthening relationships and growing revenue. Key accounts are your most valuable customers, so focus on their improvement for the full benefits of this truly symbiotic relationship.
If you'd like even more expert tips and guidelines to help ace your customer relationship processes download our Future of Customer Service Report.
This top-level research explores innovative ways companies are using smart technologies to drive both account management and customer service goals by meeting customers as human beings - openly, humanly, and with emotion. Topics include.
- Smart customer service data and the add-on sale
- The science of emotional IQ in customer service
- What AI means for customer service agents?
- Using voice to unlock more profitable customer conversations
Benemen Helps You Master Account Management Best Practices
Do these 6 things well and you will win more repeat sales, delight your most valuable customers and generate competitive edge.
Benemen gives you the tools you need to support your business critical customer account management process. Want to see for yourself? Start your free trial today!