How do you know if your strategic account management is healthy? Too often, we fail to measure the critical success factors.
Expanding existing satisfied accounts is much easier than selling to new customers who don’t know us. It is vital that we optimize strategic account management. Successful account managers contribute to revenue in three primary ways:
- Retention and “Continuations”: Continuing revenue performance, selling products and services, including renewals with existing buying centers.
- Cross-Selling and “Crop Rotations”: deepening existing relationships (e.g. adding more users) and cross-selling new products and services to current buying centers
- Account Expansion and “Colonizations”: Getting new account referrals and selling into new account buying centers.
We recognize the value of strategic account management and how a good account plan is vital to account success, yet too often, we fail to recognize the attributes of an effective account plan and strategy. They may follow good “hygiene” but suffer from poor “health”. We may have an account that is meeting revenue and profitability goals (i.e., “good hygiene”), but may not be positioned for sustainable revenue performance (a “healthy” account).
In healthy accounts, we have positive answers to questions like:
- How many new offerings have we proposed that the customer has not previously bought from us?
- How many new executives at the account did we meet this quarter?
- How many new proposals did we submit?
- How many internal referrals were made to new buying centers (e.g. a new division)?
- Are our current relationships willing to advocate for us? i.e., provide positive endorsements on our website and external or internal referrals.
- Are we realizing sole-sourced business, or is every opportunity competitive?
Here is a story you might recognize.
John is the sales account executive for our second-largest account. We have a successful relationship, we are currently delivering on our promises and meeting our annual revenue and profitability for the account. Yet, we must dig deeper to uncover account “hygiene” versus account “health”. Why is this a critical issue?
- If the opportunities at the account are 3X our current visible opportunity, and we have few actionable plans and opportunities to capture this value, are we “healthy”?
- What happens when our revenue growth flattens, our current user base matures, or market forces make their business less attractive?
- What if internal politics become unfavorable or our key supporters leave the firm?
- What if new competitors establish a beachhead at buying centers or flank our position at a more influential buying center that threatens our political advantage?
We can recognize the early warning signs.
- John seems to be working in his comfort zone, selling to his existing buying center. He appears to be coasting because the quarter and year numbers look good.
- Our business is concentrated in one division, with one decision maker, or with one type of offering.
What should we do?
In healthy accounts, we are reaching new buying centers, selling new offerings, and developing new relationships with new executives and influencers.
- Measure and pay for good account health, not just current hygiene.
- Develop coaches and form listening posts across the account.
- Develop insights and understanding about the “CEO agenda”, goals, and motivations (e.g., known and latent needs) within our current buying center relationships and across new areas of the account.
- Maintain strategic account plans that identify account whitespace and develop sales strategies to pursue those opportunities.
Call to Action: Assess the health and hygiene in your strategic accounts.
As part of our Revenue Architecture ® Methodology, we developed a strategic account management assessment tool to help do this. We facilitate analysis with key account teams by looking at factors across multiple elements of strategic account management success, including:
- Client Understanding
- Account Strategy
- Value of Our Current and Future Work
- Robustness of Our Relationships
- Managing Delivery Quality
- Our Firm as a Partner
- Account Governance
- Leading our People
- Our Brand, Marketing and Communications
- Pipeline Health
