Account Management: Who Should be in Charge?

Account managers often wear many hats, acting as salespeople, customer service representatives, technical specialists, and financial advisors. However, in practice, I frequently see the reverse: various roles within a company end up performing the tasks meant for a dedicated account manager:
● The Founder, who cannot let go of the company’s first loyal client or a significant new prospect, personally handles such accounts, leveraging their relationships for new leads.● A Project Manager (PM) with solid negotiation and closing skills may take on an additional project from a client’s subsidiary.● A Sales Development Representative (SDR) who, after heavily investing in converting a lead, continues to manage the account because they believe they understand the client's needs best

Balancing AM Duties with Other Roles: Pros and Cons

While these solutions can work initially, scaling requires dedicated account management professionals for consistent and effective client relations. If your business has a portfolio of clients, you need some dedicated AMs. Start by assessing your current team to evaluate if you have individuals fulfilling that role effectively. 

A Dedicated AM: What Should You Expect from Them?

When assigning or hiring an account manager, consider them a proactive sales manager rather than a client relationship steward. Contrary to the belief that account managers prioritize client satisfaction over sales, successfully integrating these roles brings a strategic focus to creating value, nurturing trust, and achieving sales success.

How to achieve this sequence effectively? Let me outline the steps.

Value Creation

Value creation by account managers revolves around a fundamental principle—understanding your client. While this may seem obvious, translating understanding into actionable steps often proves challenging. Here are the strategies I recommend:
Understanding Market Trends: AMs must stay updated on industry trends through regular research, whether conducted by themselves or the research team.
Collaborate Closely with Project Teams: Engage developers, testers, and analysts to glean insights into client needs.
Transparent Communication: AMs must be ready to clearly communicate a company's efforts, including investments in certifications and relevant technologies, and understand management strategies that align with client interests.
Tailoring Services to Client Needs: Once client interests and pain points are identified, the service portfolio must be tailored accordingly. 
Present it Persuasively: Present your services not just as offerings but as solutions that provide a competitive advantage in the client's niche.
Strategic Investment: These cover both financial and non-financial angles: Regular meetings, presentations, on-site visits, and conferences help foster relationships. Additionally, invest in learning technologies of interest to the client and share insights through workshops.

Build Trust

Trust, the cornerstone of any successful business relationship, is established when people believe in your mission and understand that you're working for their good as well as your own. To foster this trust, I recommend focusing on building rapport and shared success. Let’s see how this translates into account management practices. 
Frequent and Transparent Communication: Maintain open communication with clients, explaining the reasons behind decisions and changes.
Celebrate Successes: Publicly acknowledge and celebrate milestones and successes together with clients to strengthen relationships.
Showcase Results: Regularly present tangible outcomes and results to demonstrate the value delivered during stakeholder meetings.

Sales Success

Once you establish value and trust, you’ll observe how client interactions improve. Remember, building a high-performing account management team requires time and dedication. Long-term client relationships are the cornerstone of successful key account management, prioritizing longevity over immediate profit margins.

Transition from Sales to Account Management

Initiate account management within the sales department to efficiently manage existing clients and acquire new ones through inbound channels. Ensure efficiency with the 80/20 strategy by:
● Setting KPIs for AMs● Measuring efficiency steadily● Segmenting client portfolios to be assigned to AMs
Each statement calls for effective account management practices, so let’s look at these in detail.

What Would You Call Effective Client Management? KPIs for AMs

I call effective account management an established process, as a result of which you’ll have:
● Repeated business● Customer loyalty● Long-term value
To gauge the success of AMs in achieving these outcomes, consider using the following metrics:

Three Crucial Metrics for Effective AM

Immediate Implementation Tips:

● The picture is the maximum; don’t try implementing it all at once.● These are targets that you can establish and refer to over time.● Set them on a data-driven basis—dashboards in your business intelligence software or custom-made solution.● Simple Google Sheets or Microsoft Excel are less preferable methods because you’ll lose track over time.● Your very minimum KPIs should be (and I’ll explain to you why): ● Sales Targets● Client Satisfaction Score (CSAT)● Net Promoter Score (NPS) 

Key KPIs for Effective AM: A Detailed Overview

How to Measure Each KPI Effectively

Most CRM systems will offer modules to track, monitor, and analyze key metrics. Don’t neglect automation; just devote time to setting everything in place and being consistent with regularity. Now, here are my measurement tips for each metric.
CSAT
● Importance of CSAT: This metric is crucial and should never be neglected. Understanding your customers by asking the right questions is essential.
● Targeted Surveys: Send short, targeted surveys after key interactions (e.g., post-purchase, after support calls) asking customers to rate their satisfaction on a scale (e.g., 1-5 or 1-10).
● Relevant Questions: Ask questions that matter to you and your clients. For example, inquire about what technology the client wants you to learn next.
● Actionable Insights: Ask questions only about aspects you’re willing and able to improve. Share how you addressed any concerns in the next CSAT. For instance, if a client mentions slow staffing times, work on improving that and share the improvement percentage in the next questionnaire.
● Efficient Question Design: Include mostly tick-box questions for quantitative data, with a few open-ended ones for qualitative insights. Respect your clients’ time, recognizing that survey completion might not be their top priority.
● Use Survey Tools: Utilize tools like SurveyMonkey, Google Forms, or specialized CSAT tools integrated with your CRM to analyze results easily.
● Act on Feedback: Improve areas highlighted by clients. If immediate improvement isn't possible, start the process or consider removing inefficient services from your portfolio and inform the client of alternatives.

Sales Targets
● Set Clear Goals: Define specific, measurable, achievable, relevant, and time-bound (SMART) sales targets to provide clear direction for your team. These targets should reflect a thorough analysis of each client’s revenue potential.
● Monetary Representation: Sales targets should be realistic and potentially less ambitious than those set for Sales Development Representatives (SDRs), but still based on a profound analysis of each client's revenue potential (refer to the chapter on Segmentation for details).
● Regular Reviews: Conduct regular sales meetings (monthly is a good cadence) to review performance against targets and adjust strategies as needed.
● Real-Time Dashboards: Implement dashboards that provide real-time insights into sales performance, helping to identify trends and make data-driven decisions.

NPS
● NPS Surveys: Periodically send out NPS surveys asking customers how likely they are to recommend your company on a scale from 0-10.
● Calculate NPS: Subtract the percentage of detractors (0-6) from the percentage of promoters (9-10). Passives (7-8) are excluded from the calculation.
● Use NPS Tools: Leverage tools like Delighted, AskNicely, or your CRM’s NPS module to automate survey distribution and analysis.
● Segment Analysis: Break down NPS by customer segments (e.g., by product line, customer type) to gain more granular insights and tailor strategies accordingly.
● Follow-up: Engage with detractors to understand their issues and try to resolve them. Thank promoters and encourage them to spread the word, fostering a sense of community and loyalty.

Account management is rarely low-hanging fruit; it's about playing the long game. Be realistic with your expectations and the goals you set. It’s rarely quick, but consistency and persistence always pay off.

Approaches to Client Segmentation

There are always two things to balance for the effectiveness of your company:
● Your clear business goals● The specific needs of your customers
When you define and align these, you've got your strategy; the rest will be tactics, and client segmentation is a key part of that.
When identifying client segments, focus on selecting a few key criteria to ensure a targeted approach:

Key Criteria for Segmenting Your Client Base

BCG Matrix for Client Segmentation in IT Companies

In my practice, I usually start segmenting clients according to the Boston Consulting Group (BCG) Matrix because it provides a clear framework for prioritizing resources and strategies. 
I’m sure you have heard of it, but you can still refresh your knowledge here. With my clients, we establish how many and what types of accounts your account manager will handle and what percentage of them can still be managed by you as a founder if that’s still your priority:
● Stars and Cash Cows: Assign your most experienced account managers to these clients to ensure they receive the attention and resources needed to maintain and grow these critical relationships.
● Question Marks: Allocate account managers skilled in identifying growth opportunities and nurturing potential. They should be adept at developing strategies to increase market share.
● Pets: These clients might require minimal account management resources. Consider assigning them to less experienced managers or managing them through automated systems to free up resources for higher-potential clients.
Once you segment your clients, you’re already a dozen steps closer to understanding your clients. Now, it’s time to consider the optimal number of clients each account manager should handle to maintain high-quality service.

How Many Clients Should an AM Handle?

Factors determining client load include:
● Complexity and Potential: The complexity and potential of client relationships based on the client segmentation. For example, you may have a large account in monetary terms, but if the project load is only 10%, that AM can safely take on at least two more clients with average development needs.
● Types of Services Rendered: Typically, in a product development company, an AM can manage more accounts than in a service development company.
● Strategic Focus: Focus on strategic value and engagement depth to ensure AMs are not spread too thin, which helps maintain client satisfaction and achieve business outcomes.
● Number of Stakeholders: The more stakeholders involved in each account, the fewer accounts an AM can handle. Adequate time must be allocated for each person on a project.
From my experience, effective management typically involves handling 5 to 10 accounts per AM. This range ensures that each client receives the necessary attention and resources. If needed, you can take on more accounts initially, develop them, and later subdivide them based on the number of stakeholders and services rendered, passing some to other account managers. However, avoid focusing too much on a single client, as this can lead to overmanaging individual projects and turning the AM role into more of a PM one.

From Foundations to Actionable Steps

Effective account management isn't just about maintaining relationships—it's about leveraging analytics, metrics, and segmentation to develop a comprehensive understanding of each client. The key artifact in this process is the Account Development Plan (ADP).

Account Development Plan

An ADP is a strategic document that outlines the roadmap for managing and growing a client account. It focuses on understanding client needs, setting mutual goals, and planning actions to achieve these objectives.

Account Development Plan Example

It’s a snapshot of what an Account Manager learns about the client with the help of all internal stakeholders, including the project team and C-level executives. While the exact structure of this document may vary depending on factors like the account's size, cooperation duration, and future plans, it typically includes the following elements:

1. Financial Overview:
● Revenue Analysis: Historical and projected revenue from the account.● Profit Margins: Analysis of the profit margins associated with the account.● Budget Allocation: Budget details for account development activities.

2. Stakeholder Map:
● Number of Stakeholders: Identification and categorization of key stakeholders.● Influence and Interests: Analysis of each stakeholder’s influence and interests.

3. Account Objectives:
● Short-Term Goals: Immediate objectives to be achieved within the next quarter or year.● Long-Term Goals: Strategic goals for the next 2-5 years.● KPIs and Metrics: Specific KPIs and metrics to measure progress toward these goals.

4. Account Strategy:
● Action Plans: Detailed plans for achieving each objective, including tasks, timelines, and responsible parties.● Resource Allocation: Identification of the resources required to execute the strategy.● Risk Management: Analysis of potential risks and mitigation strategies.

5. Client Engagement:
● Communication Plan: Strategy for regular communication with the client.● Meeting Schedule: Calendar of scheduled meetings, including Quarterly Business Reviews (QBRs).● Client Feedback: Mechanisms for collecting and analyzing client feedback.

6. Growth Opportunities:
● Market Expansion: Opportunities for expanding the client’s presence in new markets or regions.● Product/Service Expansion: Potential for introducing new products or services to the client.● Referrals: Strategies to leverage the client for referrals and new business leads.

7. Historical Performance:
● Previous Achievements: Summary of past successes and milestones with the client.● Challenges and Solutions: Analysis of previous challenges and how they were addressed.

8. SWOT Analysis:
● Strengths: Key strengths of the client relationship.● Weaknesses: Areas where the relationship needs improvement.● Opportunities: Potential opportunities for growth and development.● Threats: External threats that could impact the client relationship.

You can use off-the-shelf templates for ADPs and customize them for your specific client. What is important here is a structured approach to consider and manage all aspects of the client relationship effectively.
The next step will be presenting and discussing the ADP as a roadmap with your client. So let’s discuss when and how to do that.

Quarterly Business Reviews (QBRs) 

Think of the ADP as ongoing homework to reinforce your value proposition, with QBRs as the perfect platform to showcase it. QBRs are essential meetings with your customers to review your partnership. You highlight your progress by sharing key ADP metrics, celebrating big wins, and discussing any challenges. When done right, QBRs convey a crucial message that should underpin all your account management work: We care about your success and deliver value throughout the entire year.

Tips to Conduct Effective QBRs:

● Meeting Format: This meeting can be held either offline or online. Pre-COVID, these meetings were often held in the client’s office, allowing for face-to-face interaction and strengthening business connections. Now, with the shift to online paradigms and sustainability considerations, many QBRs are conducted virtually.
● Frequency: Despite the name, you can specify how often these meetings are held, with the best options being quarterly or biannually.
● C-Level Engagement: It should be a meeting involving your company’s top management and your client’s C-level executives. If executives you don’t usually see are present, take advantage of the opportunity:
-Broaden Communication: Don’t limit communication to the regular stakeholders. Account Managers should engage with C-level executives to get insights and find those interested in expanding the collaboration.-Proactive Upselling: Meetings with decision-makers at the highest level are a perfect chance to build the case for upselling as you go rather than waiting until the end of a contract.
● Maintain Regularity: Never miss the opportunity to schedule these meetings regularly with the client and your company’s top management.
● Collaborative Preparation: Prepare for these meetings as a team effort involving account management, project management from other projects, the CEO for strategic perspectives, and the CTO for technological advancements to suggest during upselling opportunities.
The transformational impact of such meetings cannot be overstated. When clients see the effort you put into preparing and organizing these meetings and how well you understand their needs and preferences, they start seeing you not just as an order taker but as a true advocate for their interests within your organization.

Bottom Line

"The best way to sell something: don't sell anything. Earn the awareness, respect, and trust of those who might buy." This quote perfectly renders how I perceive effective account management. Maximizing the value of your existing client relationships should be the primary focus, as sales will naturally follow when you've built that foundation of trust and credibility. If your company is ready to embark on this time-consuming but rewarding journey, here’s my concise roadmap:
1. Clearly define the role and responsibilities of account managers, emphasizing value creation, trust-building, and sales success.
2. Segment your client base using frameworks like the BCG Matrix to prioritize resources and strategies. Understand each account's unique needs and growth potential.' 3. Establish meaningful KPIs, such as sales targets, customer satisfaction scores (CSAT), and net promoter scores (NPS), to track performance and drive accountability. These metrics will provide the data-driven insights needed to improve continually.
4. Empower your account managers with the tools, training, and autonomy to effectively manage their client portfolios. Foster a culture of collaboration between account management, marketing, technology, and delivery teams.
5. Use the insights from the account development plans that you have created with your team based on a thorough analysis of the client's situation. Be transparent about successes and challenges and celebrate your wins together with the client.
Building a high-performing account management function takes time and dedication. There’s no better time than now to start doing things right. As a Wiseboard advisor, I’m here to help you craft strategies that are as unique as your business.