The Definitive Guide to Org Charts for Sales and Account Management
Org Charts for Sales and Account Management Are organizational charts (org charts) really important? Will your sales team performance be affected if you do not have a sales organization chart and org charts for key customer accounts? The answer to both questions is a resounding yes. Org charts are not a new invention. The world’s first org chart was created in the 1850s by Daniel McCallum, a railroad engineer in America. Why? To increase operational efficiency in managing what was then the world’s longest rail system. More than 160 years later, org charts continue to play a crucial role in sales and account management. The main reasons behind that are similar to why McCallum created the world’s first org chart: to break silos and complex operational structures; and build cohesive, connected, efficient teams. When it comes to account management, too, org charts play a key role. They are roadmaps that your sales and business development teams can follow, to cut through a whole network of contacts, and reach the person who truly matters — the one signing the cheque. If you are planning to create a sales org chart for your own company or org charts for key accounts, read on! In this definitive guide to org charts, we take you through: What are org charts? Why do you need org charts for your sales teams? Org charts for key account management Key elements of org charts Types of org charts How to build more efficient teams with org charts By the end of this guide, you will gain an understanding of what org charts are, which will then allow you to determine what kind of org structure works best for you, and learn how you can get started on creating your own custom org chart — whether for sales teams or account management. What are Org charts? An org chart is a visual representation of a company’s structure, or chain of command, or hierarchy. Org charts can give you both, a broad look at a company’s structure, or a detailed look at one part of the company. For instance, a company’s sales org chart will show in detail the way its sales team is designed, in detail. Some of the elements a sales org chart could contain are: Company name Names of all members of the department Their location, contact information, tenure, and other details How they function in relation with each other, i.e., who reports to whom Sales channel breakdown (i.e., online, offline, internal, external etc) Relationship between sales teams/departments and other teams Other information that helps demonstrate how the sales team functions Org charts for account management contain similar elements, except it is information regarding another company/client/account. It could include: Company name Names of top, senior, key management, other stakeholders Their location, contact details, roles, responsibilities, departments, tenure, etc Relationship between various stakeholders, teams, or departments Reporting structure of the company Other relevant information Why do you need org charts for your sales teams? As we mentioned earlier in this guide, having an org chart for sales and account management can benefit teams immensely in terms of efficiency. They can: Help a company understand how their teams operate in relation to each other Help an organization identify, clearly define, and demarcate responsibilities and reporting structures Tell a company where there are gaps or voids that need to be filled, where there is overlapping of responsibilities, and where there are siloes. If you are a senior executive in sales, say the sales director, for instance, an org chart can help you make more informed decisions about team structure, roles, and responsibilities. Like McCallum did back in the 1850’s, using org charts can help you break silos between teams and departments. If your sales team is working in silos because of a structural flaw and is not communicating with your marketing team, it can throw your entire revenue target off course. How does that happen? When sales teams do not work in tandem with other teams, it can create an awkward working environment, reduce insight and clarity across all teams, lower efficiency by creating unnecessary complexities and layers, and ultimately circle back to impact a company’s sales and overall performance. But, by using org charts to examine the relationship between the sales and marketing teams, senior management can solve this challenge by breaking down any barriers before they can take firm root. On the other hand, how do you know if there are certain sales roles within your company that have conflicting or overlapped responsibilities? One of the ways to find out is to use an org chart. In this way, you can improve clarity on who ‘owns’ what part of the responsibility. It is important to establish this clarity to avoid clogging up workflows or creating red tape, due to conflicting overlaps in responsibilities. Therefore, an organization chart can ultimately become a tool that can be used to improve revenue and income. Org charts are also critical to the HR/people/culture departments of a company. Using them allows these teams to foster an inclusive culture where information is shared, siloes do not exist, and collaboration comes easy. A conducive working environment and culture, as we know, is also a key factor in determining how a company performs. Org charts for account management There are a few crucial outcomes of org charts for key accounts that make them an invaluable resource. Charting a course: Account org charts help you visualize a path, or a course, to reach your customer. Think of it as a key to solving the maze of reaching the end customer, the one who is actually calling the shots. Along the course, you may also find that there are other teams or departments within a company that you could target. Expanding reach: They can expand your points of entry to the client, or account, beyond the single point of contact you may have on file. Org charts can do this by mapping out relationships between stakeholders, reporting structures of target customers, team structures and hierarchy, etc. Since org charts give you access to
Strategic Account Planning Template: How to Create Account Plan Templates for Account Managers
It’s universally accepted that getting new customers in the door is a more expensive exercise than retaining existing ones. When customer retention can directly be linked to profitability, doesn’t it make business sense to increase customer retention? A report from Bain & Company suggests that a 5% increase in customer retention results in a 25% increase in profit for companies in the financial sector. While these statistics may change for different companies and across sectors, what’s important to focus on is the impact of retaining your customers. The statistics here show a direct link between increased revenue and existing customers. Based on the report, existing customers are 50% more likely to try new products and spend 31% more than new customers. But to retain your existing customers, you will need to spend time and effort to get to know them, understanding what measures you need to take and what resources you need to allocate. Both strategic account management and strategic account planning, are important processes geared towards developing better relationships and retaining your customers. Strategic Account Management v/s Strategic Account Planning Though the two are sometimes confused, strategic account planning is the next, and more focused step after strategic account management. Strategic account management is practiced at a macro level. It takes into consideration all key accounts and then focuses on those that should be given more attention and higher priority. It is an important process because it involves the utilization of limited resources available. Strategic account planning, on the other hand, is practiced at a micro level. It examines relationships with specific existing accounts. This process is fluid because the company-client relationship keeps evolving and changing and the plan must accordingly shift to accommodate those changes. This approach takes into account a holistic picture i.e., it analyzes data and information gathered from customers, competitors, partners, collaborators and the industry. It is thus able to address concerns and challenges and offer meaningful solutions to customers. A strategic account plan is as significant to the company as it is to the customer. Benefits of Strategic Account Planning to the Company Among the many benefits of strategic account planning to sales and account management professionals are: 1. More Efficient Closing Closing is, to sales what oxygen is, to breathing. And closing becomes more effective when sales professionals have a better understanding of what the customer needs, what motivates the buying decision or what objections they need to overcome to close the sale. With a strong strategic account planning process in place, sales professionals are better equipped with the information they need to do their jobs effectively. Since this is an evolving process the information available is also updated and current. 2. Prioritize Key Relationships The focus in strategic account planning is on customers already in the system. The strategy is to prioritize important accounts and maintain those relationships. By combining hard data with the knowledge o customers’ goals and priorities, sales professionals are better able to focus on those accounts that will yield profitable results. They are also able to identify gaps with more ease and offer products and solutions at the right time and in the most appealing manner. 3. Research Strategic account planning, especially with the help of a strategic account plan template provides an opportunity to gather and organize information in a structured manner. Through research and a proper study of the various parameters, it encourages better learning of the key accounts. Gaps are easier to identify and can be matched with opportunities. Objections can be identified and successfully addressed. Valuable solutions can be offered – customized to needs. This process helps sales professionals gain a better understanding of customers’ needs, objectives and indicators of success. It also helps them offer relevant solutions at the right time and in the right manner to add value to the customers’ needs. Benefits of Strategic Account Planning to Customers The process of strategic planning wouldn’t be as effective without the customers benefitting from it too. Here are some ways strategic account planning adds value to important customers: 1. Customized Solutions The main objective of strategic account planning is to gain a better understanding of key accounts. This information, if used effectively, can be used to present customized solutions to customers. Sales representatives can proactively offer solutions relevant to the customers’ needs and business objectives. 2. Enhanced Relationships It’s easier to maintain and enhance existing relationships than build new ones. This also works well for customers. For the customer, building and maintaining a relationship means familiarity with the people, products and processes of the company. It could mean that requests are attended to more quickly, orders are processed quicker and transactions are generally smoother. Any issues that may crop up will be addressed and handled efficiently. 3. Increased Satisfaction Prioritizing and developing relationships with customers means that the company is focused on the immediate needs of the customer – which builds customer satisfaction. Identifying gaps and offering the appropriate solution at the right time increases this customer satisfaction. Especially if the solution is customized and tailored for the customer. Now, that the need for a strategic account plan has been established, let’s look at how best this can be implemented in your organization. The best and easiest way to start is to develop an account plan template. Download Now: 9 Steps to Build a Rock-Solid Key Account Management Process Why do Strategic Account Managers need an Account Template? There are several reasons why a strategic account plan template is relevant and important. An account template: 1. Saves Time Account Managers are busy. They are most focused on meeting budgets, closing sales, and achieving revenue goals. Putting together reports on key accounts – no matter how promising they appear – is not something that’s high on their priority lists. Having an account template doesn’t negate the need to actually put some work into filling it. It does, however, help with structured research and organizing the details required. It also makes it easier to input, refer to and update the information as needed. 2. Increases Consistency Through research, it has been estimated that an average adult makes about
Top 8 Key Account Management Tools Every Key Account Manager Needs to Grow Key Accounts
Accounting for all variables, ‘Key’ accounts are the ones that help organizations strive to achieve something exceptional. Organizations try to identify and hold on to such key accounts, with a variety of sales strategies to improve numbers. Most of these organizations would already be using a form of customer relationship management, and using Key Account Management Software can be seen as the logical extension of the same. KAM tools focus on a section of clients to build a bond by providing personalized consultation services. What should you look for in Key Account Management Software? Once the right accounts are earmarked for Key Account Management, associating a dedicated team with them removes obstacles in understanding, approvals, change requests, and many other activities. Other employees can focus on their main responsibilities, instead of handling client management duties. Key account managers can rely on the support of a cross-functional team for proper execution of deliverables. They can use features of CRM tools their organization is using, to keep track of communication with the account stakeholders, give visibility on what’s going on and what can be done, and ensure effort is not wasted across teams. The tools listed below take different approaches to Key Account Management, and any of them can be chosen based on the needs of the team using the tool. While some are CRM tools with enhanced functionalities, few are built with KAM as their focus. List of 8 Key Account Management Tools Every Key Account Manager Needs 1. LinkedIn Sales Navigator Being the world’s largest professional network, LinkedIn boasts of 700+ million users in more than 200 countries and territories, and LinkedIn Sales Navigator uses this wide reach to keep its users up-to-date with the accounts, while identifying and connecting with important stakeholders and new prospects. What it does Generate and qualify leads, grow networks, cultivate relationships, grow revenue – the basic responsibilities of KAM team members can be easily executed with LinkedIn Sales Navigator. The option to create custom lists of clients is a positive factor, where the tool fetches insights based on the contents of the list – like job switch of a client manager, prospects who have interacted with posts in the last week, etc. The need for it Being the preeminent social network has its advantages – and Sales Navigator provides more contact data than the limited access of the free version. Sales teams can unlock more people in their search results during prospecting. Sales Navigator allows for filtering contacts based on engagement, interactions, and social behaviours and events. 2. DemandFarm Demandfarm is a Key Account Management tool that makes key account planning effective, yet Easy. The simplicity of the tool enhanced productivity right off the bat, by relieving sales teams from dealing with the clutter of spreadsheets and presentation slides or sales materials. It improves existing account intelligence and enables insightful opportunities for the sales team members to pursue. Reports can be accessed on demand from the dashboard, from where Account management leads can govern every aspect of the sales funnel. Checklist: How to Select the Ideal Digital Account Planning Tool What it does When it comes to managing key accounts, Demandfarm ticks all boxes. Being one of the very few key account specific tools, it focuses on maintaining and improving the account and provides plenty of features to achieve the same. It provides easy integration options with CRM software, and enriches typical CRM activities with actionable information from various sources. The tool takes in data spread across the sales team, and converts this organizational knowledge into an enterprise memory that can be used effectively by all team members alike. The need for it Apart from enriching existing leads and enabling teams to automate routine interactions, Demandfarm maps out multiple buying centres and spots opportunities that can spring up within the account, with WhiteSpace Analysis. The Organization chart with heat maps allows for drag and drop updating of charts and provides an in-depth look at all client relationships. The ‘Grandstand’ dashboard feature of the tool renders for easy review of key accounts from all angles. Account Planning features inspire collaboration, and sales teams can build simple yet comprehensive plans that consider the relationship strength and the business potential of Key Accounts. Change transition support, unified tracking, and reviews with standardized operational reporting aggregate data across multiple key accounts and paint a detailed big picture. From 360-degree clarity to anticipate opportunities to building the right capacities and aligning resources, Demandfarm allows account plans to identify and act upon cross-sell and up-sell opportunities. 3. Chili Piper Chili Piper is a hands-full add-on for CRMs, and augments their functions with account management related functions (not necessarily key management specific). It simplifies meeting bookings and suggests agreeable times for a connection. What it does ‘No calendar tetris’ is what Chili Piper promises, and delivers handsomely too. Apart from scheduling and reminding participants, it records every interaction in the CRM, with meeting details time stamped and recorded to help sales teams manage their pipeline better. Their mobile apps and browser extensions help sales executives access the tool from anywhere and book meetings at their convenience. The need for it If arranging meetings is a pain for the sales team, Chili Piper works out really well. Features like one-click booking via email, embedding suggested times and smart signatures in emails so that the guests can schedule meetings with one click, automated reminders and rescheduling features etc. seem simple enough, but the mental load of remembering to follow up and reschedule can be quite burdensome on individuals. Sales executives don’t have to refer to their calendars every time they have to arrange meetings, and that is a win all by itself. 4. Outplay Outplay is a multi-channel outreach tool that helps sales teams scale. Sales teams can connect with prospects on multiple platforms such as email, chat, SMS, Phone, LinkedIn and even Twitter. The ability to personalize interactions across channels is its USP. What it does Teams can set up personalized sales sequences, so that they can reach out to prospects timely and effectively. The
Key Account Management: Best Customer Segmentation Strategies for Customer Success Teams
Customer Segmentation for Key Accounts Engaging with customers and striving for positive outcomes in those interactions play a vital role in helping a business succeed. From enterprises to SMBs in the B2B sphere, almost every organization is focusing on keeping up with the needs of their customers. With the widespread permeation of digital media, personalized communications and solutions have become commonplace. These granular, bespoke communications can be effective if they are delivered to the audience they’re intended to. Customer segmentation helps in identifying the shared characteristics so that these group of customers can receive our solutions & attention more effectively. In SaaS companies, customer segmentation for key accounts is usually done based on the Annual Recurring Revenue (ARR) value of the customer organizations. Since ARR segments clients based on the revenue contributed, segmenting becomes easier – but it can be counterproductive when vendors prioritize accounts with high ARRs. The risk-avoidant nature of ARRs means customer success & account management teams have to segment their customers strategically and understand the similarities and differences between the needs of their clients. Learn More: The Role of Key Account Management in Customer Success Management The need for key account segmentation Every customer is different – While some might expect customer success teams to help them understand the issue in detail, others might want minimal communication outside the scheduled interactions. Teams can put these two customers in separate segments, and create an accurate assessment of their needs. This helps teams get a clear understanding of the issues in front of their customers and deploy resources in an effective way. Unlike the old methods where large clients were clubbed together, developments in the area have resulted in methodologies that include companies from various industries, of different sizes and revenue, together. These methods ensure all customers across different segments get the same importance, but with different approaches that are suited to their needs. Read More: What is Customer Centricity and Why it isn’t the destination? Types of Key Account Segmentation There is no dearth of customer success segmentation models, and teams can choose the one that suits their needs most. While traditional methods have lost their allure, certain new frameworks have shown value in customer segmentation. Based on the model that is chosen, teams have to consider the variables specific to the industry or business. The nature of the products and services being proposed also play a part in deciding the segmentation model to be used. Trait-Based Segmentation It relies on demographic information, like the industry, company size, latest developments in the sphere etc. This segmentation technique is easily identifiable, but the underlying assumption that shared traits between industries or companies also share desired outcomes can lead to misleading assumptions. RFM-Based Segmentation It stands for recency, frequency, and monetary aspects of the customer organization. Recency refers to the time elapsed since the last customer interaction, Frequency is about the number of times customers contact the vendor in a specified period of time, and Monetary aspects refer to the total spending of the customer with the vendor. These details help customer success teams to gauge the responsiveness of the customer and plan their proposal accordingly. Value-Based Segmentation Value-Based Segmentation groups customers according to the economic value they provide to the vendor. It focuses on the ARR potential of customer organizations, and groups them by subscription levels, production rates, existing ARRs, and similar metrics. Customer success & Key Account Management teams can locate upsell and cross-sell opportunities with this method, and serve existing customers better. It focuses attention on building relationships with customers, and improves the revenue potential over time. Needs-Based Segmentation It classifies customers based on specific needs. Customer success teams group customers who use products for similar objectives, and achieve targeted service delivery for every one of them. Types of key account segmentation based on revenue The process of segmentation differs from one methodology to another, but the steps involved largely remain the same. Segmentation on the basis of Revenue (MRR or ARR), one of the most prevalent methods, is usually done under the following labels: Revenue Segmentation Revenue Segmentation pays extra attention to customers who contribute more to the bottom line, because high-value customers usually have complex needs. The customer success teams should carefully select meaningful segment boundaries, where customers below and above revenue boundaries have varied needs – otherwise the difference in treatment can be jarring to the customers. Also, the matter of customers who downgrade their subscription or opt for a lower tier contract needs to be handled carefully, as dropping low in the order of importance can cause resentment when not handled diplomatically. Revenue Potential Revenue Potential of a customer might increase multiple times over the future, even if it is relatively low today. Or in case of enterprise clients, the partnership may start with a really small project, but if the team understands the potential of serving other departments/functions and tailor their product accordingly, there could be excellent upsell opportunities. By providing high value of service even at low MRR, the chances of getting bigger projects is increased. Reference Accounts Reference Accounts are customers who may not have a large relationship value, but have great contacts in the business to whom they can refer vendors to. If they are really happy with the limited partnership scope, then too they can serve as reference points for other prospects that customer success teams approach on their own. Lifecycle Stage Lifecycle Stage of customer technology adoption is very important for SaaS sales teams. Customers in the initial stages appreciate vendors taking the time to help them understand the intricacies of the field, and they need more upfront time investment than those who are in advanced stages of technology adoption. Industry Industry level segmentation makes sense if the vendor product is used by multiple industries in different ways (check out systems, for example – which can be used by PoS systems as well as warehouses). Teams can then focus on industry-specific messages while approaching customers.
Step-by-step guide: How to select the right sales account planning tools?
Importance of Account Planning Tools Any solutions provider organization worth its salt understands that its customers are not looking for vendors, but strategic partners who can provide insights on market trends, customer preferences and more. Planning of key sales accounts, therefore, has become a necessity to monitor and manage the sales pipeline – for small businesses and large enterprises alike. Solution provider organizations are catching up to the task too, and are adopting – or considering adopting – tools to manage the practice better. But adopting the latest solutions does not equate to success, as there are plenty of factors that organizations need to consider. What are sales account planning tools/software? Account planning has become a necessity for sales organizations: It helps sales and marketing team members understand their customers and make better use of their time. This is especially important in today’s fast-paced world, where organizations are forced to be more agile and responsive. It also allows employees to gain insight into the customers’ needs, which can help them improve their service offerings and increase revenue – as well as reduce costs by streamlining processes. Traditionally, these tasks have been done using easily available tools or software – pen and paper, spreadsheets, or even text documents. In Gartner’s Future of Sales 2025 report, it predicts 80% of B2B sales interactions will occur in digital channels by 2025. As B2B sales become more digital, technology and digital tools become central to Account planning. Sales account planning tools take the haphazardness out of maintaining account data, and help sales teams organize, prioritize and plan their activities. They can be used by any type of organization—not just the traditional B2B industry. There are several different types of sales account planning tools available, from software that comes equipped with a built-in CRM system (which incorporates all the customer data into one place), to enterprise applications that integrate with multiple platforms including email marketing automation, social media management, and lead management systems. Checklist: How to Select the Ideal Digital Account Planning Tool Why do we need sales account planning tools / software? Planning sales accounts is a strategic process that helps in the activities, focus on the right accounts and resources, and ultimately help achieve the goals set. Account planning tools help sales managers and executives understand both the current market situation and plan where they can be in three or four years. LinkedIn State of Sales 2021 found out that 77% of sales professionals say their sales org plans to invest more in sales intelligence tools. Such account planning tools also provide insight into how well each account fits within the overall strategy for achieving specific objectives—for example, if an engagement isn’t generating enough revenue per month (or quarter) then it may not be worth continuing because there’s no way for those funds spent on this client wouldn’t have been better spent elsewhere. Real-time tools are vital to success because they provide information on strategic accounts, and cross-platform tools are easier to use, and they churn out results faster by integrating data across departmental silos. They enable rapid-response decisions, by providing detailed analyses in visual forms like graphs and charts. They not only provide a lifeline for organizations to stay in business, but also build revenue and market share. What are the core functions of strategic account planning? Account planning strategy involves identifying key stakeholders, relationships, and opportunities that usually go unrecognized. These data connections are analysed and studied in graphs and charts. They aim to simplify complex information, so that sales teams and other stakeholders can take accurate decisions. Learn More: The Practical Guide to Sales Opportunity Management In order to do so, they have to perform several activities to understand the need and the issue faced by their clients. To strengthen the relationship and grow existing accounts, critical information needs to be captured to align features with customer priorities, and deliver value consistently. Account managers then draft action plans and collaborate with their customers to execute projects – and rise to the level of a trusted advisor. The number of different elements at play in sales account management, means sales professionals have to approach the process in a structured way. Understanding the parts which make the sales account planning process is essential to establish a working structure, and adopt tools that suit the needs of sales teams and their organizations. Analysing industry trends throws out information on issues that may impact the customer in the future. Sales teams can understand their need for change through this – be it changes to market sentiments, resource challenges, competitor issues, government regulations, or something else. Identifying areas of customer’s priority can help the sales team in formulating the bare bones of a working solution. Maintaining healthy customer relationships opens up avenues, like new divisions or business units – that should be documented. Also, documenting the history with the customer gives a clear view of current opportunities, and adding possible future opportunities to this list can make it more useful in the long run. Customer strategy maps help in determining which objectives and initiatives match with the capabilities of the solution. These maps detail out the goals, challenges, and culture of customer organizations, and makes it easy for sales team members to identify areas where most value can be provided to boost the customer’s plans. Assessing stakeholders by their role, influence, and affinity to the solution gives an honest understanding of strengths and vulnerabilities of the solution. With enough details, sales account planners can clarify key objectives – be it strengthening the customer relationship, increasing the perceived value of the solution, and more. Taking the customers’ view of the product/organization shows the USP of the solutions provider in a unique light. Articulating this USP better, makes current and prospective clients understand the need for the solution easily. Determining how to align the solution features with customer needs, and ensuring that it happens at rate that isn’t viable for competitors, goes a long way in changing a
Key account management skills for the new paradigm
Account planning has evolved from the wine and dine times to providing strategic solutions – and shows no signs of stopping. The tribal knowledge present in the teams can become enterprise memory with digital KAM and narrate a story of the client’s needs to the Key Account Management team – allowing them find innovative ways of meeting them. This means key account managers can focus on proactively understanding and trying to solve client’s problem, instead of trying to keep the records straight. The changes to working conditions all over the world provide another reason to relook at skills required to manage key accounts – the old ways are not relevant anymore. The changes to the way we work have been so drastic that in a couple of years, organizations that don’t have any sort of key account management practice that relies on structured data – will not be able to succeed. With structured information about clients and insights derived from AI and ML tools, Account Managers can provide the necessary human touch efficiently. The key customer representatives want to succeed in their positions – and are looking for strategic partners who can empathize and help them achieve business goals. By treating key accounts as strategic partners, organizations can see the real value of the business relationship – where the skills of account managers are enhanced by the tools at their disposal.
Predicting the next move in sales and account management – the AI and machine learning way
It is essential for organizations to understand which accounts are ‘strategic partners’ and the relationships where they act as a tactical vendor. Once the distinction is made, treating the strategic partners as key accounts requires a thorough understanding of the customer’s business, structure, details about individual business units, strategic initiatives, and management changes. While having this data is essential, using it to create solutions that create more value for the customer or answer the customer’s business challenges is what fortifies relationships – and AI and ML help in this regard, by identifying areas of focus and/or concern. The intelligence present in the organization about its key customers can be termed as ‘tribal knowledge’, and it resides in the way clients and key account managers interact, while adding value to the relationship. This seemingly unstructured information can be captured into an enterprise memory which can be seamlessly used by multiple members of a team to manage the same key account. When properly structured, the data can be used by AI and ML tools for Key Account Management – and ease the process of collaborating and building relationships with the customer organization. They provide insights which help in making account plans which lead to revenue goals, specific actions, and timelines. Every key account will have unique situations that necessitate customised solutions or approaches and require a fair amount of cognitive thinking. The insights that AI and ML tools provide help in the process, but the days of tools providing viable courses of action are not that far off.
Account Planning – A Strategic Approach to Grow Your Key Accounts
Editor’s Note: This post was originally published in November 2019 and the content was refreshed in March 2023. What is Account Planning? Account planning is the process of building strategic plans to improve value-driven relationships with your key customers that can help in long-term development and retention, thereby maximizing the revenue potential. Effective account plans help account managers to gain a more in-depth understanding of the client. Account Planning has been around for years. Did you know that 65% of a company’s business comes from existing customers? Or that 80% of your future profits are likely to come from 20% of current customers? In other words, building and cultivating healthy relationships with clients is one of the most effective pathways to exponential growth. With so much at stake, it’s no wonder that 61% of companies consider strategic account management as the key to increasing revenue, profits, and customer satisfaction. While the importance of account management is unquestionable, its implementation leaves a lot to be desired even today. 71% of companies believe that sales improved by less than 26% since launching their Account Management programs. KAM Glossary: Crucial Account Management Terms Explained Why is Account Planning essential for your business to grow? A recent Account Planning Book of Evidence study surveyed 1034 people from 62 countries to determine why organizations undertake the account planning exercise. Most of the results were unsurprising: Better Win rate (75%) Increased understanding of customers’ business (72%) Shorter sales cycles (58%) Better customer loyalty (55%) Increased deal size (49%) Better executive access (47%) Identify non-competitive deals (27%) While this gives us an insight into the benefits of Account Planning as a whole, it also goes to show that there is some ambiguity when it comes to defining the overall purpose of account planning. A better win rate is too vague and can apply to all key account management processes. ‘Increased understanding of customers’ business’ is important but it doesn’t talk about outcomes. Download Now: 9 Steps to Build a Rock-Solid Key Account Management Process Purpose of Account Planning There are a couple of reasons why companies struggle with effective account management. The first is that technological innovation has shifted the landscape across departments and industries, and account management has also changed with it. As a result, companies that weren’t able to keep up with changing trends in account management have suffered. Apart from technology shifts, there is another reason why some companies struggle with effective SAM (Strategic Account Management). The key to effective account management lies in sound Account Planning. Many companies either ignore account planning or do account planning for the sake of it, without a clear understanding of its purpose and expected outcomes. Without effective account planning, account managers are simply unable to create the kind of impression on their clients that they need to. We decided that we needed to get a better understanding of the role of account planning, the technology trends in account management, and the way forward for organizations. Account Planning Template – The Key to Revenue Growth We sat down for an in-depth discussion with Mr. A. Ghosh, Founder, and CEO of Netfotech Solutions. Netfotech is a cutting-edge IT services company that works with clients of all sizes and all across the globe including India, the UK, and Singapore. They also provide many solutions from social e-commerce Solutions, big data consulting, web site development to web hosting, mobile application development, BI & Analytics, and Robotics Process Automation. With such a diverse clientele and a broad range of services, the effective strategic account management plan has emerged as a key growth driver for Netfotech. Here are some key excerpts from our conversation. Mr. Ghosh believes that there are two major reasons to do strategic account planning. Together, they define both the essence and the ultimate purpose of the sales account planning exercise. The first and foremost priority of Account Planning is to ensure that the gross margin in the account is consistent from one year to the next. It’s very easy, especially in a services business, for the cost of client servicing to increase without a corresponding increase in revenue. A detailed account planning template helps to overcome this problem by ensuring that the gross margin stays consistent. Read Now: Account Planning Template – Step by Step Strategic Account Planning The second major reason for Account Planning is to strategically grow the account. Cross-selling and up-selling are some of the easiest ways of maximizing revenue and it is only possible through effective account planning and management. The probability of selling a new service to an existing customer is between 60 to 70% whereas the probability of selling to a new prospect is only 5 to 20%. Together, these two reasons, maintaining profitability and horizontal growth, are the fundamental reason why account planning exists in the first place. In search of an Account Planning Template to grow your Strategic Accounts? Look no further! Overcoming Account Planning Challenges The first step in account planning is an in-depth understanding of the client and their needs. Unfortunately, this is the step at which most account planners falter. If the understanding of the client is superficial, effective account planning is simply not possible. According to Mr. Ghosh, there are three major challenges that most account managers face while trying to get an accurate and comprehensive understanding of their clients. 1. Lack of Ground-Level Intel The devil, as they say, lies in the details. In many cases, account planners simply don’t have access to key strategic information about the client. For instance, a client that is currently using our website development services may soon be looking to get an analytics set-up in place. Unless account managers have access to this kind of strategic information, they may lose an opportunity that is there for the taking. The only way to solve this conundrum is by building closer, more meaningful relationships with clients. 2. Lack of Connection to the Right Stakeholder Sometimes, account managers are unable to get
The secret to winning a key account for long-term
Key account retention, when seen from the eyes of vendor partners, is not just about proving the solution that was asked, but to understand the client’s business and help them grow. But with the fragmented state of data on customers, it is difficult to understand what drives the decision making on the customer’s side. With the right strategy and the right tools, however, key account managers can ensure they have relevant data which allows them to work smart. With proper data about the client in place, Account Managers can demonstrate value to the key account by knowing their business and industry, helping them set goals, develop corresponding strategies and create a concrete, actionable plan. With properly organised data, even a new member of the accounts team can start on an even keel with the information available. With proper data, reaching out to key accounts regularly becomes a meaningful activity, which works towards enhancing the relationship. At the end of the day, technology enables us to do what we already do better. People buy from people they trust, and with sophisticated key account management tools – the task of establishing trust can be simplified. Also, with AI and ML being used increasingly in Key Account Management solutions, we are seeing the software provide helpful suggestions, touch points, key focus areas and more. Watch the complete DemandFarm Fireside Chat to learn how your organization can have a long and fruitful relationship its key customers here
Digital Key Account Management- Unlocking the secret to managing Key Accounts
Previously published under the Council Post for the Forbes’ Business Development Council The Pareto principle, better known as the 80/20 rule, is applied for numerous purposes in boardrooms all over—but the essence holds true for a majority of cases in the business world, especially when it comes to managing and retaining customers. The idea and allure of gaining new users always outweigh the duty of catering to existing customers. And it makes sense why: More customers result in better streamlining of resources and approaches, leading to more savings, higher profits, and better output. But this shouldn’t come at the cost of key accounts contributing to the company’s ongoing revenue. Handling these key accounts is often considered an art. As anyone with knowledge of the enterprising history of business would know, it is only the suavest, sociable account managers who can manage relationships between organizations that are mutually beneficial. The roots and troubles of Key Account Management At the peak of the industrial age, about 50 to 60 years ago, businesses differentiated between strategic customers and regular ones. They treated their large accounts preferentially, and the practices to maintain a big account were translated into methodologies which led to creating templates. This led to a layer of complexities in which consultants would create a sometimes 50-page template to manage a key account. Over the years, this has become theoretical and no longer actionable. In the end, account managers end up creating account plans which amount to nothing but filling in the fields of complex templates which may never be referred to again. What began as an initiative to improve product and solution quality by focusing on the most valuable customers has turned into a complex process that is, at best, seen as a nuisance. And at worst, it can harm relationships between organizations. The cracks in traditional key account management practices have proven untenable in the current scenario, where it is often impossible to have a meeting in person. The fundamentals of account management, which relied on keeping in touch with key clients, are no longer viable across industries and verticals. This luxury of time doesn’t exist in the current scenario, as customer preferences change regularly. The representatives for key customers are looking for a partner who can empathize and help them succeed in their business roles, not a cog who provides what is necessary for the supply chain. When organizations treat their key accounts as strategic partners, the real value of relationships can be seen. Finally, a renewed focus on individual careers has made the movement of employees between companies much more common. This often means that the traditional KAM data is rendered obsolete much more quickly. Why Key Account Management? Even after all the drawbacks, organizations keep trying to accomplish key account management the traditional way because it yields results. Yet key accounts are responsible for 33% of sales revenue, according to a survey by Gartner. A poll on Analytics and Advice for B2B Leaders by Gallop shows that organizations that excel at key account management see disproportionate account growth solely by their ability to engage their customers. The numbers are impressive, too: 34% more profitability, 50% more sales and revenue, and 33% greater chance of being the top choice of clients for future business. The results can be seen fairly early as well. One survey shows that customer satisfaction increases by 20% within a few years of establishing a key account management program, which usually is reflected by a 15% increase in profits and revenue. The benefits compound over time, as KAM programs that are operational for five-plus years usually report figures that are nearly double. Taking the Digital Way Ahead With digital account planning, we are seeing a significant shift for the good in the area of strategic account management. B2B companies that had the luxury of time in the past are moving at a faster pace. The employees typically lasted for years in one organization and often could negotiate multi-year deals to provide products, parts, or services. This is almost unheard of in this era of constant change and optimization and one-year contracts. But when the focus was on keeping the client representative happy earlier, account managers could span out their planning across multiple years at once. Digital tools help in key account management by ushering in a new way of business. Digital key account management transforms key account planning into a dynamic, data-driven process that provides actionable information and insights. The intelligence present in the organization regarding its key customers—what one might term tribal knowledge—resides in the way clients and key account managers interact and add value to the relationship. But this seemingly unstructured information can be captured into an enterprise memory which can be replicated or used by a team rather than a single person. What the Future holds With the record created by digital key account management, an enterprise memory is built which narrates the story of a client’s needs and problems. This provides a solid start to those filling in for their colleagues or replacing someone. With the help of these tools, employees can approach the problem of managing a key account more creatively and provide the necessary human touch with efficiency. The cognitive skills of account managers still rule the roost, and no level of automation can replace the intuition an experienced key account manager brings to the job. It can only enhance it.
