After two months of conversations, demos, and meetings, you’ve just closed a large account for your company. The contract is signed and your new customer is excited about implementing your product/service.
But now what?
The new customer is happy for now and should be kept that way. It’s time to turn your customer over to account management.
What is account management? It’s a crucial extension of the sales process. Good account managers are able to pick up where sales left off and assist with customer retention and expansion.
The focus of account management is nurturing customer relationships.
What is Account Management? An In-depth Exploration
Account management starts after the sales transaction is complete. It’s the daily management of customer accounts to make customers want to continue the relationship with your company.
Account managers must continually prove your company’s value to the customer so they’ll want to stick with your product/service.
The role is particularly important for SaaS companies, as the customer cycle is longer.
A customer signing up for your product/service is only the beginning — you need to stay top of mind so the customer will want to renew or even add onto their subscription.
A typical account manager has the following responsibilities:
- Manage the customer long-term relationship
- Find up-sell opportunities
- Strategize to meet customer needs
- Track account metrics
For example, let’s say you’re doing account management for a financial subscription company.
You have an in-depth understanding about the needs of your customer based on your research and what was conveyed to you from sales.
You answer any questions that the customer has about your product and offer ways to get the most out of your product (e.g., how they can use a specific feature to improve their accounting process).
You keep track of different metrics to determine the health of the account, as well as conversations to know if the customer is happy for your product.
You listen to their needs and concerns.
If you notice that your customer would benefit from another feature of your product (e.g. your customer’s business is growing), you might suggest an upgrade or an addition to their current plan.
A good account manager acts as both an advocate and trusted advisor for the customer.
The Account Manager Responsibilities Explained
An Account Manager plays a crucial role in maintaining and expanding the relationships between a company and its clients. Their responsibilities typically include:
- Client Relationship Management: Building and maintaining strong, long-lasting customer relationships. This involves regular communication, understanding client needs, and ensuring their satisfaction with the services or products provided.
- Sales and Business Development: Identifying new sales opportunities within existing accounts, up-selling, and possibly even cross-selling to increase revenue. They may also be responsible for negotiating contracts and closing agreements.
- Strategic Planning: Developing a thorough understanding of the client’s business, industry, and competition. Based on this, they create strategic plans to meet client goals and align them with the company’s services or products.
- Project Management: Overseeing projects and initiatives, coordinating with internal teams (such as marketing, sales, customer service, and technical support) to ensure timely and successful delivery of solutions according to customer needs and objectives.
- Problem-Solving and Support: Acting as the main point of contact for any issues or concerns raised by the client, and working with the appropriate internal teams to resolve these issues promptly and efficiently.
- Reporting and Analytics: Monitoring and analyzing customer usage of the company’s products or services. Preparing reports on account status, and tracking key account metrics to understand trends and needs.
- Feedback and Improvement: Collecting client feedback, sharing it with internal teams (like product development or service delivery), and implementing changes to improve customer service and product offerings.
- Financial Management: Managing budgets related to client accounts, including invoicing, payment follow-ups, and negotiating terms as necessary.
- Market Knowledge: Keeping up-to-date with industry trends, market conditions, and competitor activities to identify new business opportunities and threats.
- Collaboration and Communication: Working closely with various departments within the company to ensure a unified approach to client service. This includes effective communication to ensure all team members are on the same page regarding client expectations and project status.
- Education and Advocacy: Educating clients about new features, products, or services and advocating for their needs within the company.
- Renewals and Retention: Focusing on contract renewals, reducing churn, and increasing client retention rates through proactive service and relationship-building.
In essence, the role of an Account Manager is multifaceted, requiring a blend of sales, customer service, project management, and strategic planning skills.
The ultimate goal is to ensure client satisfaction and loyalty, while also contributing to the company’s revenue and growth objectives.
The Account Manager Skills Required for Success
To be effective in your role as an Account Manager, you need a diverse set of skills.
These skills will enable you to manage relationships with clients effectively, ensure customer satisfaction, and contribute to the growth of the business.
Key skills include:
- Communication Skills: You need to excel in both verbal and written communication. It’s essential that you can clearly convey information, ideas, and instructions to your clients and team members.
- Interpersonal Skills: Your ability to build and maintain healthy, productive client relationships is key. Being personable, approachable, and able to connect with people at various levels within an organization is crucial.
- Negotiation Skills: You often find yourself negotiating terms, prices, and contracts with clients. Your skill in negotiation must be sharp to reach agreements that are beneficial for both parties.
- Organizational Skills: You must be adept at managing multiple accounts and projects simultaneously, keeping track of all the details and ensuring that nothing gets overlooked.
- Problem-Solving Skills: When problems arise, your ability to quickly identify and effectively solve them is critical, especially when dealing with client issues or internal challenges.
- Analytical Skills: Analyzing data and trends to understand your clients’ needs, the market dynamics, and to measure account performance is a key part of your role.
- Sales and Marketing Knowledge: Understanding sales processes and marketing strategies is important for you, as these skills help in identifying opportunities for account growth and expansion.
- Customer Service Orientation: A strong focus on customer service is essential for you. Ensuring that clients are satisfied with the products or services they receive is a primary part of your job.
- Technical Proficiency: Depending on your industry, you may need to be knowledgeable about specific technologies, software, or digital platforms relevant to your products or services.
- Adaptability and Flexibility: Your ability to adapt to changing circumstances and client needs is crucial. You must be flexible in your approach and able to handle unexpected challenges.
- Strategic Thinking: Thinking strategically about client accounts, including long-term planning and understanding how your current actions will impact future outcomes, is a skill you need to cultivate.
- Teamwork and Collaboration: Working effectively with team members across various departments is essential for aligning internal efforts with client needs.
- Empathy and Emotional Intelligence: Understanding and empathizing with client concerns, and being able to navigate emotional client interactions, is important for maintaining strong relationships.
- Time Management: Managing your time efficiently is vital, as it helps you meet deadlines and manage your workload effectively.
Account Management vs. Sales Management
These two types of customer management roles complement each other, but are not the same thing.
While sales is more transaction-based, account management is more relationship-based. In account management, the sale has been made and now you need to convince the customer to stay with your business long-term.
Let’s take a look at how sales and account management are different.
Sales reps find new customers who are in need of your product/service and establish the initial relationship during the prospecting stage such as through social selling.
They continue to develop this relationship up until the closing stage, having conversations via different channels. The ultimate goal is conversion.
Sales provides a brief to account managers with details about new customers. Account managers take this information and continue to nurture the relationship.
They act as the daily contact for customers, finding out their needs and wants. They offer valuable resources such as case studies on current customers and advise on ways to improve their business (including through renewals and up-sells).
For larger businesses, account management and sales management are separate departments. But for SMBs, account management and sales management are typically combined.
Sales reps act as account managers and vice versa.
If you’re an SMB with limited resources, make sure that your sales team has the skills and understanding to continue the customer relationship.
Consider implementing relationship-focused tactics into your sales process (e.g., customer-centric lead generation strategies), so it’s easier for your sales reps to continue the customer relationship after the sale has been made.
The Benefits of Account Management
Account management plays a vital role in the success of businesses, offering numerous benefits:
- Enhanced Customer Relationships: Effective account management helps in building strong, long-lasting relationships with clients. By understanding their needs and providing tailored solutions, you can increase client satisfaction and loyalty.
- Increased Revenue: Through upselling and cross-selling opportunities, account management can significantly boost revenue. By deepening relationships, you’re in a better position to introduce clients to additional products or services they might need.
- Improved Customer Retention: Consistent and proactive account management leads to higher customer retention rates. Satisfied clients are less likely to switch to competitors, ensuring a steady revenue stream.
- Better Understanding of Customer Needs: Regular interaction with clients allows you to gain deeper insights into their challenges, preferences, and requirements. This knowledge is invaluable for tailoring your offerings and improving your products or services.
- Opportunities for Feedback and Improvement: Account management provides a direct channel for receiving customer feedback. This feedback is crucial for continuous improvement and innovation.
- Enhanced Reputation and Trust: By effectively managing accounts and exceeding client expectations, you can enhance your company’s reputation. Satisfied clients are more likely to recommend your services to others, helping to build trust in your brand.
- Predictable Sales and Revenue Streams: With strong account management, sales become more predictable due to established relationships and ongoing contracts. This predictability aids in better financial planning and resource allocation.
- Reduced Sales and Marketing Costs: Acquiring new customers is often more expensive than retaining existing ones. Effective account management maximizes the value of existing relationships, reducing the need for extensive marketing and new client acquisition efforts.
- Strategic Advantage: In-depth knowledge of key accounts can provide strategic advantages. You can anticipate market changes and client needs more effectively, positioning your company as a preferred provider.
- Cross-Functional Alignment: Good account management often requires coordination across various departments within a company, leading to better internal alignment and teamwork.
- Increased Referrals: Satisfied clients are more likely to refer new clients, helping to grow your business organically.
- Long-Term Business Growth: By maintaining a focus on long-term client relationships, you can ensure sustainable growth for your business. Long-term clients tend to be more profitable over time.
In summary, effective account management is crucial not just for maintaining good client relationships, but also for driving growth, improving products and services, and ensuring the long-term success of a business.
Account Management Best Practices
Especially if you’re a sales manager also acting as an account manager, you may need to transfer certain skills and/or add to your skill set to be successful.
Strong communication skills, the ability to build trust, industry experience, and organization skills are all important for account managers.
To successfully complete the day-to-day responsibilities of an account manager, you need to be proactive with managing every account and build strong relationships.
Customers are more likely to stay with a company they believe truly cares about and values their business.
- Take advantage of your CRM. Not only is a CRM perfect for organizing customer information, but you can also use it to track customer conversations with sales, customer service, and account managers. Use your CRM to understand which accounts to prioritize, too, such as through reviewing deal value.
- Do your research. In addition to getting account info from sales, review company information, news, blog articles, and info on your point of contact. What are their goals? What are their pain points? What do they need advice on? Check your customer’s social media accounts, such as LinkedIn, on a regular basis to view what’s important to them on a personal and professional level.
- Recognize customer needs. Listen to what the customer says, but read between the lines on what they say they want and what they really need. Share resources that will help customers both use your product (e.g., case studies) and thrive in their industry (e.g., industry reports). Also look for up-sell opportunities, but don’t push an up-sell if it’s not going to add value to your customer’s life.
- Communicate with sales. If in separate departments, sales and account managers need to communicate on a regular basis (especially when handing off new customers). What features or add-ons did the customer purchase? Did the customer mention anything at purchase that might affect their account later on (e.g., talks of an acquisition)? You’ll also need to coordinate with sales on up-sell or upgrade opportunities.
- Pay attention to account metrics. Track how your relationship with each of your customers is progressing and be able to communicate results to high-level management. Retention rate, customer churn rate, customer satisfaction score, and support calls/emails are all important KPIs to track the health of customer relationships.
Unlike sales, which is short-term focused (e.g., closing the deal), an account manager needs to have a long-term mindset. In addition to the above practices, keep an eye out for external factors that could affect your account, such as competitor products.
The goal of account management is to both provide value and communicate that value to your customers.
A quality product or service is essential, but a customer is more likely to stay with your company if they believe you have their best interests at heart.
Get Started as an Account Manager
Now you know the account management definition, it’s up to you to decide if it’s for you.
Although similar to sales, account management requires more customer nurturing skills to ensure that customers stay satisfied with your company.
Adding continual value to the customer’s business is key to account management and successful continuation of the relationship that sales began.