Why Strategic Account Management Is Key To Business Success

Drive sales growth with existing customers through strategic account management

What Is Account Management?

Existing customers are a critical revenue source for almost every organization. Meeting organizational growth target requires sales leaders to establish key account management processes and tools that not only retain clients, but also enable account teams to identify, develop and execute on growth opportunities within their account base.

However, Gartner research reveals that the traditional account management strategy may actually stunt growth.

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Drive revenue growth and achieve customer satisfaction through strategic account management.

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    Role of Account Managers

    Key account managers are now expected to provide service, resolve issues and maximize consumption and ROI — all while selling additional new products and services. Account managers are also expected to achieve growth by connecting multiple products together into complex solutions.

    Selling these solutions is time-consuming and difficult, requiring a distinct skill set and attitude for account managers. Yet in many instances, these additional growth responsibilities have simply been added alongside traditional retention responsibilities for account managers. The result is a role so expansive sellers must inevitably choose among competing demands on their time.

    Account managers juggle a broad range of responsibilities, from customer service and support to maximizing consumption and value to driving account growth.
    Pie chart showing that only 28% of sales leaders report that account management channels regularly meet their cross-selling and account growth targets.

    Sales Account Management Channels are Falling Short of Goals

    As part of the broader move to solution sales, many organizations have expanded their product and solution sets; on average, sales leaders report a 2.3x increase in the size of their sales teams’ product portfolio over the past several years.

    Despite this increase in portfolio size, account management channels continue to perform below growth expectations, with cross-sell and upsell revenue falling short of targets.

    Account Management Strategy

    World-class organizations focus on customer improvement. However, most sales organizations have account management functions that inadvertently reinforce or even encourage the natural inclination of account managers to focus on retention through product success and service before pursuing growth.

    Account managers who practice customer improvement deliver future-focused, supplier-agnostic messages on how customers can improve their business, securing both retention and growth.

    A new model for account growth is one that moves from backward-looking, supplier-focused service conversations to future-focused, customer improvement conversations.

    How Gartner Helps CSOs With Account Management

    Gartner insights, advice, data and tools help sales organization develop strategic account management and enables a seamless shift from product success and service to customer improvement. Sales leaders can start by focusing on four critical tactics:

    Simplify the identification of customer improvement opportunities within accounts

    Enable sellers to confidently drive growth conversations — provide them tools and support that make it easier to identify and pursue improvement opportunities.

    Measure and track account growth potential

    The extent to which customers believe their relationship with the supplier improved their business — a metric we call the customer improvement score (CIS) — is a strong predictor of retention and account growth. By tracking account health and viability, account teams can better determine where to direct customer improvement efforts.

    Build growth-oriented account teams that can deliver customer improvement

    Selling is a team sport. Structure and staff account teams to drive growth-oriented behaviors: critically evaluate customers’ businesses, deliver unique perspectives and creatively brainstorm customer improvement opportunities.

    Clarify account management roles and job definitions

    Provide clear delineations between customer service, customer success and customer improvement roles and responsibilities to reduce role complexity, improve efficiency and lower churn.

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    Gartner Account Management Case Studies

    This year, our sales growth is up 20%. I certainly think that the changes in our organizational structure and the support that we got from Gartner is a part of that.

    Heather Combs

    Chief Revenue Officer, 3pillar Global

    How Does Gartner Support Growth in Account Management?

    Gartner helped 3pillar Global, a custom software development company, identify that their account management teams were allocating all of their time to service and retention and not enough to growth. With the support of Gartner experts and tools, 3pillar restructured the department to build out a separate sales team, which led to a 20% increase in sales growth year over year.

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    Account Management FAQs

    Account management is the practice of providing customers with service, support and improvement opportunities to increase their consumption of a product or service and maximize retention, cross-sell and upsell opportunities within the customer base.

    The key tips required for successful key account management:

    • Recognize the “anti-shrinkage” system for what it is. 
    • Realize that service does not drive growth; customer improvement drives growth. 
    • Simplify customer improvement opportunities within accounts. 
    • Enable account team effectiveness. 
    • Get a more accurate measure of account health and viability.

    To develop an effective key account management strategy for growth, CSOs should:

    • Define what is meant by “key account” by establishing enterprise-driven key account criteria to target accounts with true growth potential.
    • Align the enterprise in managing key accounts by pursuing a formal, iterative approach with stakeholders to design, develop and deliver on enterprise key accounts.
    • Partner with key customers by engaging them in discussions to jointly calibrate on the right level of partnership, systematically testing account potential.
    • Maintain key account program performance by systematically monitoring the health of key account relationships. When key accounts do not live up to engagement and performance standards, review those accounts’ eligibility for key account status.

    The key skills account managers need include:

    1. Project Execution and Strategic Planning
      • Strategic Account Planning
      • Risk Management
      • Network Building
    2. Product and Industry Expertise 
      • Product/Solution and Brand Knowledge
      • Solution Building
    3. Business Development
      • Customer Relationship Building
      • Sales Innovation 
      • Customer Business Improvement
      • Business Acumen & Incorporating Economic Drivers

    Some of the key challenges in account management include:

    • Inaccurate account management plan
    • Unable to identify growth opportunities
    • Prioritizing customer service and support at the expense of growth