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In companies with a sales team, account management plays a critical role.
However, it’s not always easy to identify the benefits of account management, and organizations may try to get by with their sales representatives performing account management duties in addition to lead management for new business.
This approach invariably hurts the business in the long run through higher customer attrition and lower profit. To understand the importance of account management to a sales organization, let’s unpack what exactly the role encompasses.
Account management is a post-sales function focused on nurturing a company’s relationship with existing clients, usually in a B2B sales environment.
The members of a customer account management team, called account managers (AMs), are charged with two primary responsibilities: Retain a customer’s business, and grow that business over time.
Account managers accomplish these objectives by understanding what customers are trying to achieve through the purchase of the products and services offered by the AM’s company, and by helping clients reach those goals.
In this way, account managers develop client relationships, reduce turnover, and subsequently help the company grow revenue by offering customers new products and services.
The value of an account management team is immediate when considering that it’s five times more costly to acquire new customers than to retain existing ones, according to the Harvard Business Review.
Because the position is focused on building relationships, companies should evaluate an account manager’s performance using metrics such as customer lifetime value.
There are other differences between sales and account management, and these distinctions illustrate why organizations need both teams.
A typical sales organizational structure follows a hunter-farmer model. The sales representative, also called an account executive (AE) (the hunter), is responsible for capturing new business, focusing their time and energy on prospecting for clients.
Once the AE has closed the sale, the customer is handed over to the account management team (the farmers) to grow the relationship post-sale. This model works well because it allows AEs to focus on the process of new business development deals.
Meanwhile, account managers can spend their time fostering the relationships initially created by account executives.
It’s easy to underestimate what’s involved in growing customer relationships. The benefit of a dedicated account management team becomes clear when breaking down the scope of responsibilities.
Here are an account manager’s key duties.
One of the primary ways an account manager maintains a positive customer relationship is by serving as the main point of contact for customers. This can play out in several ways.
Another key responsibility of an account manager is to analyze data across clients and deliver regular updates to customers.
Account managers grow revenue for the company primarily by ensuring existing customers stay on and by upselling them.
It’s not easy to gain customer trust. Successfully building a customer relationship and growing it into additional revenue opportunities requires specific strategies. Here are a few ways to achieve that success.
Even though the primary responsibility of an account manager is to maintain positive client relationships, this relationship building won’t happen unless the account manager is proactively reaching out to customers.
Tips to be proactive
Clients are busy and tend not to contact a company unless they encounter a problem. So, account managers must perform outreach by promoting the benefits being delivered. They can achieve this in a number of ways.
An account manager must cultivate their role as a consultant to the client. This serves to build trust and deepen the relationship.
Tips for consultative selling
As experts in their field, account managers must keep abreast of not only the latest within their company, but also within their industry as a whole and how their company stacks up to competitors.
When upselling clients, an AM can easily fall into the habit of offering products or services simply to hit an internal sales quota. However, this approach can turn off customers if it’s done randomly, without aligning the upsell to the customer’s objectives.
Tips for upsells
Don’t make upsells merely to grow company revenue; they must make sense for the client’s strategies and increase the benefits of working with the AM’s company. Otherwise, the upsell can create a feeling of mistrust that’s difficult to remove.
If a business is successful, at some point, the number of customers under an account manager’s purview can exceed the AM’s bandwidth. Consequently, it makes sense to execute a KAM strategy.
KAM stands for key account management, and it refers to the idea that the AM should allocate their time and effort mostly toward accounts that generate the most revenue. Because no company has unlimited time and resources, a KAM strategy is a must for most businesses.
Tips for executing KAM
Because it’s easier to add a client to the list of KAM accounts than to remove one, carefully define the criteria for this higher tier of service.
Account managers have a lot of information to track for each client. That’s where CRM software can help. CRM stands for customer relationship management, a concept focused on delivering an exemplary customer experience. CRM software is designed to support that goal through a number of capabilities.
Tips for using a CRM
Today’s CRM software is sophisticated. The team should be thoroughly trained on its use in order to get the most from it as well as to ensure it’s being used efficiently.
Because CRM software has become a competitive advantage in today’s business world, and its capabilities work well for account management teams, let’s dive deeper into the ways in which a CRM can help account managers.
Because there are many types of CRM software with varying strengths, it’s worth exploring multiple CRM options to determine which one is appropriate for the needs of your organization. You can find reviews of top CRM software solutions at The Ascent.
An account manager’s success depends not only on client relationships, but also on internal relationships within the AM’s company.
The account manager is not alone in fulfilling the client’s needs; other teams, like marketing, play a role as well. Moreover, the transition from account executive to account manager doesn’t mean the AE no longer talks to the client.
That’s why the account manager must maintain strong communication with members within their organization to ensure client relationships are on the path to long, fruitful partnerships.
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