Strategic account management can be challenging, so understanding how to best manage your clients will give you the best opportunity for success.
As the saying goes: ‘80% of your sales come from 20% of your clients’, showing just how important client relationships are to a business, making strategic account management crucial.
The work isn’t done when the sale closes. The best way to avoid costly churn with your most valuable customers is to implement a strategic account management program, prioritize high-value clients, build strong relationships and maximize generating revenue-making opportunities.
Read on to discover the strategic account management definition. We’ll help contextualize how it fits into a business more widely and provide you with the primary strategic account management principles, too.
What is strategic account management?
Strategic account management is the process of building relationships with key clients that are value-driven, both to the client and your company. By doing this, your company can aid the long-term development and retention of your revenue, whilst also forming a thriving relationship between your business and your clients.
This means you can focus on the accounts that have the most growth potential, allocating resources to achieving that potential.
Implementing strategic account management allows you to create a relationship that provides value to your customers and your business more widely.
Why is strategic account management so important?
A deal isn’t over once the contract has been signed – in fact, it’s far from finished.
You need to maintain your relationship with this new client so you can grow the account, delivering more value and growing your revenue.
Here’s why account management is so important:
Increased customer retention rates
Increase customer satisfaction whilst also improving retention rates when you implement strategic account management.
Ensure that you understand your buyers’ needs so they can achieve their goals, making sure that your approach is personal so all your clients' needs can be met.
More growth opportunities
While onboarding new clients is a big win, retaining and growing existing clients can be an even bigger win. An account with a high growth potential could enable higher revenue for your company.
This can be achieved by cross-selling or upselling opportunities.
Delivers valuable insights
When working with a client, you’ll gain insights into how your product can accomplish certain objectives, meaning you’ll have insights on how you can improve your company’s sales strategy.
Scaling accounts reduces further cost of acquisition
Implementing effective strategic account management enables you to scale existing accounts. Limiting the cost of further acquisition will help you to achieve higher rates of profitability.
How to develop an effective strategic account management strategy
There’s a variety of best practices when it comes to strategic account management, and these include:
Knowing and identifying your strategic accounts
While this one may seem more basic, one of the key strategic account management principles is knowing your strategic accounts.
By knowing your accounts, you’ll be able to identify which accounts can be upsold or cross-sold to.
Evaluating your strategy may include considering the following:
- Product fit
- Revenue potential
- Growth potential
- Financial health
- Potential partnership
Select which of these you want to prioritize and assign each account a score from 1-10 so you can see which accounts align with your goals.
Defining strategic account manager responsibilities
An account manager’s responsibilities may include:
- Supporting assigned key accounts and their objectives
- Serving as the lead point of contact for all customer accounts
- Communicating with clients regularly
- Resolving issues
- Monitoring metrics and reporting these to stakeholders
However, a strategic account manager’s responsibilities will include all of the above, as well as:
- Achieving assigned strategic account objectives
- Managing key client portfolios
- Establishing strong, long-term relationships
- Suggesting solutions and innovative ideas to meet client needs outside of existing projects
There are a few qualities that are great to look out for when deciding on your strategic account manager and these include:
Effective leadership and organization
Having a good leader will enable you to understand and organize everyone’s needs across the entire team whilst also formulating a plan that will offer solutions to various problems.
Continuous communication
Frequent team communication enables you to align everyone and onboard all clients efficiently.
Long-term strategy skills
Strategies are important so you can plan, and the clients can flag anything they are unsure of.
Being a strategic account planner doesn’t have to be restrictive either, plans can be flexible and still offer guidance.
Technical skills
Technical skills mean you can resolve any complex issues that may arise within the various aspects of client expectations.
Here at Capsule, we offer various technical tools, sure to help your business, including our Email Marketing & Tools.
Analytical skills
Being able to analyze means that you will be able to see where key decisions need to be made.
Our Sales Analytics tool will ensure that you have all the analytic tools necessary for your team.
Capsule CRM will monitor every aspect of your sales cycle, enhancing business understanding and strategic choices.
Build a profile for each strategic account
To make the best profiles for each strategic account, ask the following questions to each account:
- What constitutes their target demographic?
- Who occupies the competitive landscape?
- What range of products or services do they offer?
- Define the key decision-makers. How can your client impress them?
- What objectives have they set for both the short and long term?
Also consider a SWOT analysis, as this will help you gain a deeper understanding of these accounts. SWOT means:
- Strengths: What are the company’s strengths?
- Weaknesses: What are the company’s areas for professional development?
- Opportunities: What are the opportunities for the company?
- Threats: What are some threats that could impact the account’s growth?
Conduct a needs assessment for each account
Identifying the gaps in your accounts will create a clear plan on how to close them. For example, you can consider:
- What your company is buying vs. what your company is being offered
- Where is your company engaged on a day-to-day basis?
- Identifying the opportunities that your company could be utilizing
- What value can be added to the account?
- Where is time being spent on this account? How can this be improved?
Knowing this information means that you’ll be able to formulate a plan to fix these issues and find new opportunities.
Draft a strategic account plan
Draft a strategic account plan to provide a roadmap for how the accounts can grow. The plan should involve:
An account snapshot: Gather information about the account such as its mission statement, revenue goals and cross-sell or upsell opportunities.
Internal decision-makers: Identify the internal stakeholders for the account and determine their decision-making criteria.
Personalized recommendations: How will you, as the account manager, help the account grow?
Resource requirements: How much time and how many people will be in charge of the account? Be sure to clarify the resources available to deliver projects.
Challenges: Are there any challenges to consider in terms of the account’s growth?
Create a communication schedule
Set a schedule of communication with your accounts (for example, this could be weekly or monthly). Decide on what will be covered in these communications so all feedback can be shared.
Ensure that you also make it clear to your accounts which resources are available so you can help your clients as much as possible. Be sure to have both short and long-term objectives, which are reported on and addressed in these comms.
Track and measure success
Measure metrics so you know if you are on track to meet your client’s objective. Some metrics you could measure are:
- Cross-sells and upsells
- Client referrals
- Account testimonials
- Satisfaction rates.
After your metrics have been tracked, ensure that they reflect your client’s objectives, if they don’t you should consider scaling back your investment or reconsidering your relationship to the client.
Create executive alignment
Form account executives so you can describe your initiatives and describe your strategy in detail.
Ensure that you outline how you’ll measure metrics. Account executives will handle contracts, sales presentations and so on.
Challenges of strategic account management
- Without an effective strategic account plan, numerous challenges may come along with an account management strategy, and these include:
- Having access to an effective strategic planning tool. This is where Capsule CRM comes in with our Tasks & Calendar service. Our system monitors your workflow closely, meaning you’ll be able to create and nurture great relationships with all key customers in each strategic account.
- A way to implement efficient strategic account plans in time-saving.
- Need to gain learning training and skills in strategic account management.
Use strategic account management to boost your business
Knowing how to undertake strategic account management is a great way to boost the profitability and attractiveness of your company to potential clients.
If you want to automate workflows, manage contacts, track your sales pipeline and many more, then try Capsule for free for 14 days. You’ll see just how efficient strategic account management can be.
