Secrets To Successful Account Management With Suneal Rao At InsideSales.com
Learn the trends in account management and find out the secrets on how you can win in this important sales function in this Sales Secrets episode.
In this article:
- Why Account Management Is Important
- How to Optimize Your Account Management
- The Trend on Subscription-Type Models
- Growth Opportunity in the Subscription Economy
- How to Stay on Top of the Trend with Your Account Management Team
- Prioritization Is Key in Account Management Strategy
- The Tactical and Strategic Elements of Prioritization
- Key Account Management Roles
- Tracking Account Activity
- Proactive Account Management Planning
- Key Takeaways
How to Approach Account Management
Suneal Rao is InsideSales.com’s Director of Market Strategy. His role focuses on how to grow revenue by considering different markets, product capabilities, and market segments.
Account management is part of Rao’s work, and one of their goals is to innovate the process so they can cater to industry trends.
Why Is Account Management Important?
Sales companies always work towards ensuring they’re making the most revenue possible. Now, with the increase of subscription-type models both in SaaS and the physical world, focus on account management is going to be one of the companies’ top-line goals.
It’s for this reason why this sales function is important. Unfortunately, from a tools and technology standpoint, there hasn’t been much focus on account management.
Often, it’s up to the engaged and motivated account manager to figure out the best method and find ways to stay on top of all their accounts. The good news is, these shortcomings also present opportunities for optimization.
How to Optimize Your Account Management
A Gartner study revealed that 80% of a company’s revenue comes from 20% of their customers. Revenue is highly leveraged on the existing top customers.
That’s why optimizing account management means you’re getting the most long-term value out of your top 20% customers. This also means you need to have a strong account management function.
Rao also cited a similar study from the Gartner group, where they found out that only around 30% of Account Managers hit their goals. Clearly, there’s a challenge for those who manage accounts to find ways to get the most out of the accounts they’re responsible for.
The Trend on Subscription-Type Models
In the industry as a whole, there’s a broader trend around subscription-type models. A McKinsey study says that the subscription model doubled between 2011 and 2016 and that growth continues.
Rao gave an example of an existing trend where managing existing accounts and customers using a structured approach is critical:
Many believe that the future of transportation isn’t going to be individual car ownership but rather, subscriptions. Instead of buying their own cars, individuals and businesses pay for transport service subscriptions.
For instance, an employee of InsideSales.com can rent X amount of car or bus rides per month. This can also work with other means of transportation, such as the bicycle, scooter, or moped.
As Rao said, this level of subscription-based economy is going to proliferate throughout our entire lives in many different ways. Anyone can take advantage of extra capacity at any time, or they can get what they need at any given time.
This is the overarching scheme in the industry. For this reason, managing accounts can become critically important as opportunities come to light in this economy.
Growth Opportunity in the Subscription Economy
Rao confirmed that he sees big growth as people move into the subscription economy more and more. This is because the phenomenon is already happening both in the physical and digital worlds.
Soon, the competition won’t be about who’s sold the most number of goods, but rather, the number of subscriptions you get.
Subscription companies have to compel customers to subscribe on a monthly or annual basis to get a certain amount of usage. This is where the competition lies with other subscription companies.
How to Stay on Top of the Trend with Your Account Management Team
The move towards a subscription economy is certainly a challenge. As Rao said, the first part of dealing with any challenge is to recognize it and try to get ahead of it.
It’s essential to understand the importance of having the right people, process, and technology. Account management is people-centric, which is the most critical part of the equation.
Though, as Rao pointed out, we need to find ways where the process can raise the bar of what Account Managers can achieve. It’s not enough to have your best Account Managers understand all the best practices and hope that disseminates across the organization.
Keep in mind that account management has already evolved from merely providing support to providing strategic guidance. It’s also people and relationship-driven.
Prioritization Is Key in Account Management Strategy
As the Gartner study revealed, 80% of a company’s revenue comes from 20% of their customers. This means it’s important for companies to focus their resources on those who matter to their business.
Prioritization is key. When it comes to account management strategy, you have to figure out:
- Who to go after
- Where you spend your time
- The balance of sales reps to accounts
As Rao said, you have to prioritize not just by who you have the best relationship with but also by other tools and measures.
How can you measure the potential growth of an account? They may not be on your top 20% right now, but they have white space opportunities.
Then, figure out how you can build the account’s muscle. This illustrates the need to go beyond individual capabilities.
Companies need to help augment those capabilities, steer conversations, and guide strategies.
The Tactical and Strategic Elements of Prioritization
Prioritization has two elements to it, Rao explained. On the tactical side, it’s figuring out where you spent your time.
This also means determining what you did last week versus what you’re doing this week. Rao said that many sales reps over-report how much they do.
They don’t do this maliciously, he clarified. It’s just that when the reps are so involved in activities, it’s hard for them to quantify these in retrospect.
From a strategic perspective, Rao observed that account management teams haven’t properly aligned which industries, verticals, or accounts they should prioritize. They should base their prioritization on the most important factors to them.
Rao shared these guide questions so that account management teams can determine what they need to spend more time on:
- Within your organization, are there certain reference accounts you’re trying to build?
- Are there certain industries and verticals you want to expand?
Account management teams can properly prioritize by doing the following:
- Increase the touches on top accounts, industries, or verticals
- Provide the right sales and marketing collateral
- Strategically plan to drive their goal to completion
Key Account Management Roles
Prioritization is a key account management strategy, yet there are still other things account managers need to fulfill to succeed in their role.
First, they need to become a more strategic function. This means transitioning from a customer support role to a revenue-generating function.
Prioritization is always going to be a key practice to achieve this.
It’s also important to align marketing and sales collateral. This means ensuring that any marketing effort is driven through and leveraged in that one-to-one relationship between account management and their accounts.
Other key account management roles include tracking account activity and understanding customer territory penetration.
Ultimately, the goal of account managers is to drive the following:
- Proactive renewal conversations
- Proactive upsell conversations that leverage the whole storyline of the organization, from Marketing to Sales
Tracking Account Activity
Let’s dive deeper into one of the account management roles: tracking account activity. Rao gave the transition period as an example where you can see this role in action.
When an account manager gets promoted or they find a new opportunity, they hand off their accounts to the person replacing them. When this happens, account management teams should be able to keep track of their strategy and where they are in that strategy.
Keeping track of account activity allows them to engage the account over time. Documenting the progress within the strategy is also important in cases of hand-offs.
The account management structure should up the level of Account Managers’ performance by providing structure and visibility. It should also enable performers to increase what they’re able to achieve.
Proactive Account Management Planning
How can you have a proactive account management team? Rao shared one of their practices where they use the renewal date as a trigger event.
His team kicks off proactive engagement with stakeholders months before the set renewal date.
You can follow this example by picking key stakeholders, and then set a timeline for proactive engagement (say, six months before the renewal date). You can align your engagement content either with marketing or account management content.,
Then set up a cadence that says, “We’re X months from renewal. I want to set up a business review to outline the value that we’ve had over the last six months or the last year.”
Then, leverage that cadence to set the meeting, meet with the right stakeholders, and kick off your renewal strategy.
It’s high time to step up your account management game. You need to arm your people with the right tools and get the process right, so your account management team can function as a revenue machine.
As Rao said, account management is quickly becoming a strategic revenue drive for the organization. It’s going to be critical to revenue growth.
The industry continues to transition and evolve. How can you structure, standardize, and prioritize key account management roles so more account managers can hit their goals?
The first step is to have the right people on your team, Rao said. Then, figure out how you can standardize the process using available technology today so that you can have a well-functioning organization.
In turn, you can hit your account management renewal and upsell goals.
Understanding the value and trends in account management allows you to maximize this sales function. From its role in customer support, this function has now evolved into becoming a real revenue machine.
Applying account management best practices like prioritization lets you harness its potential as a strategic revenue drive for your organization.
What potentials and challenges are your account management team facing today? We’d love to hear from you in the comments section below.