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.
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.
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.
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.
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:
Enable sellers to confidently drive growth conversations — provide them tools and support that make it easier to identify and pursue improvement opportunities.
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.
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.
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 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 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:
To develop an effective key account management strategy for growth, CSOs should:
The key skills account managers need include:
Some of the key challenges in account management include:
