Why Strategic Account Management Needs More Work than Normal Account Management
The strategic account management process is about building value-driven relationships with your key customers. It is a synonym of Key Account Management. The strategic account manager’s role is to identify those key customers that generate maximum revenue and profitability as compared to other regular accounts.
These managers act as a bridge between the company and stakeholders on the customer side. The idea is to increase customer lifecycle value by starting small like with a free trial or test project, adding value, and building trust. Strategic account management is a function that more often than not, loses its criticality in the mire of operational account management.
While most Account Directors and Managers wholeheartedly agree to the fact that Key Accounts need a different level of investment in terms of time, resources, and frequency, this still remains an area that does not receive its due. The reasons may differ but whatever the reason, the results of not paying heed to Strategic Accounts, are almost always the same – poor.
So we know that we simply cannot afford to ignore Strategic Account Management.
Account Planning Softwares can help optimize the time and effort in developing strategic account plans. The correct implementation and understanding of strategic account management are paramount to the growth of revenue.
But let’s now understand ‘WHY’?
- It’s the old rule that has always worked – The 80-20 principle: The rule says that 80% of your business comes from 20% of your customers. Pay attention to this 20%. These 20% form your Key Accounts.
- It is like a gold mine – the more you dig, the deeper you will go and understand: You get to the gold, only as you dig deeper. Your strategic accounts are like a gold mine – Complex, deep, and not easily read. Just sitting on them is of no use, until you start digging and understanding the people there. How do they operate, who is the key man/woman in the hierarchy? Who is the influencer? How will he/she help me? Is my main influencer leaving that company? In that case, do I have a backup man? There’s nothing superficial about Strategic Account Management. You need to dig deeper and for that, you need an effective tool.
- Relationships have no formula. You got to try and make them work all the time: Strategic accounts involve many people across multiple functions, hierarchies, and geographies. Relationship mapping needs hard work and smart work. It is not an overnight heist. In cases that win equally on merit, the winner is usually the man who has won the customer’s trust. From this perspective, it pays to look into certain key questions: Are you assigning dedicated time to this key man/woman? Are you listening for cues to leverage the relationship and business? Are you reviewing the relationship? How often are you doing it? Do you have a relationship-building action plan?
- More than one key project at a time: Strategic accounts have more than one key project going on at the same time and you cannot afford to accord a step-motherly treatment to any. This means Account Directors need to be focused on each of these projects in equal measure. This requires creating strategic account managers for each project who are able, capable, and know the ropes of Key Account Management. It also requires training them on a regular basis. For a CSO or Account Director, it means creating a team of key people in order to achieve a superlative performance.
- A CRM is not enough: The key to strategic account management is making sense of the big data available to you. While a CRM may be giving you the data, you need to work on this big data, analyze it and leverage the findings to your benefit. He who uses big data to narrow down and get to the key focus areas is usually far more successful.
The first step to focusing on your Strategic Accounts is to focus on them, use the right tools and leverage the findings by taking action. Also, learn how to set up your KAM process in 9 steps or read other blogs on strategic account management.
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About the Author
CEO & Co-Founder, DemandFarm
Milind is CEO & Co-Founder of DemandFarm. Having practiced and evolved the ‘account farming’ principle for over a decade he established DemandFarm and is passionate about delivering the best B2B key account management tool to serve the needs of key account managers. Milind also serves on the Board of LeadEnrich & is a Strategic Adviser.