Why are some companies able to consistently grow their strategic accounts and maximize value while others struggle? This is a question that confounds many a sales leader.
Some think it is largely related to the strength of product and service offerings. The companies that grow their accounts the most must have superior offerings that keep customers coming back for more, right?
In a recent RAIN Group Center for Sales Research report, we surveyed 472 sales leaders and asked them the rate to which they agree with the following statement: "The potential for revenue growth in our current offering set is exceptional." Of the 72 factors we studied, this ranked 72nd in difference between Top Performers and The Rest.
In fact, there was no statistical difference between the two groups regarding the growth potential of the current offering set. If it isn't the offerings, then what, specifically, is it that makes some organizations so much better at growing their accounts?
To find out, we conducted a major study of 397 organizations with formal strategic account management functions. Top Performers in this study, Top Performance in Strategic Account Management Benchmark Report, had stronger revenue growth, margin growth, and satisfaction growth in their named strategic accounts than The Rest.
The Strategic Account Management Competency Model
Among our key findings are that Top Performers in Strategic Account Management have strategic account managers who:1
1. Drive Value
The best strategic account managers grow accounts because they drive value for buyers proactively.
2. Ask How, Who, and What
They ask the questions that get to the heart of expanding and winning opportunities with existing accounts.
Top Performers are more than 2 times as likely to have an effective process for growing and protecting strategic accounts. It may be cliché, but "he who fails to plan, plans to fail" still applies in strategic account management.
4. Perform the 6 Strategic Account Management Roles much better than The Rest.
Together these make up our Strategic Account Management Competency Model.
While we cover the 6 strategic account management (SAM) roles in detail here, in this post we'll cover the first three components of the model.
The strategic account managers (SAMs) that grow accounts do so because they drive value for buyers. Also, implied in the word "driving" is a connotation of proactivity. This is important because too many SAMs view their role as winning opportunities that, essentially, fall on their desks. However, the vast majority of account growth lies in the value SAM teams can drive that buyers wouldn't be aware of unless sellers themselves raised the ideas proactively.
The data around driving value supports the importance of doing it. We found that when SAMs drive value, companies are much more likely to be in the Top Performer group.
When we asked about the effectiveness of company processes to drive value, we found that Top Performers were 2.2 times more likely to do so. They were better at internally assessing the myriad of ways they could drive additional value at strategic accounts, and working collaboratively with strategic accounts to drive value in new, innovative ways.
Figure 1. Effectiveness of Company Process to Drive Value
How | Who | What
If you're going to drive value, you need to answer three questions:
- How are you going to drive value for the account? If you're going to drive value, you need new and innovative ideas for how to do that, and you need practical support for making sure the ideas can become reality.
- Who is important in driving this value? You need to know who the stakeholders are that need to be involved and what their respective roles are to drive value both on your team and the account's.
- What do you need to do to make additional value come to life? If you're going to drive value proactively, a variety of people will need to do a variety of things. People on your team need to create action plans detailing what everyone needs to do, hold people accountable, and manage the whole strategic account growth process.
The hub that connects the How | Who | What concepts is a strategic account plan. You may think that this is a given, but only 21% of The Rest have an effective process for growing and protecting strategic accounts compared to 53% of Top Performers.
And when it comes to the 32 strategic account manager competencies we studied, the four worst across all respondents related to strategic account planning:
- Ensure account plans are current
- Vet account plans to ensure they’re solid and defensible
- Ensure account plans are thorough
- Create compelling and effective written plans
Top Performers are markedly better, however.
Figure 2. Account Managers Lead the Account
Figure 3. Account Managers Ensure the Execution
How to Connect with Key Accounts
If you’re selling to a key account, you know them already. And they know you. You’re important to each other. You’ve built trust. That’s a very strong platform—one you should be careful to protect.
At the same time, most realize they can and should be doing more work with their key accounts. Since no one else is going to make sure the client receives maximum business value from their relationship with your company, you must be proactive to make it happen.
Yet many sellers—especially seller-doers such as at services firms—think, "I shouldn’t bother my clients," and "I don’t want to upset their trust. They can’t see me too as self-interested, and selling to them does that."
This thinking is misguided.
Let’s assume you’ve already led a solid internal value discovery session. You have a set of ideas for how you should expand account relationships by adding more value.
Now that you’ve carefully explored working with the client in more ways that will help them be more successful, the outreach doesn’t need be complicated or contrived. When it goes something like this—whether it be via phone or email—it tends to work just fine.
[Insert pleasantries / rapport here.]
Last week the team and I got to talking about the work we’re doing in A, B, and C. In fact, we ended up having a meeting to discuss a few things we’ve been seeing as the project has moved along.
At the meeting, we generated some ideas about improving X and Y—something you and I have, I realize, never talked about—and I think we came up with some really interesting possibilities. In fact, with one of them, we think it’ll speed up the process quite a bit, which I know is something you’re always looking to do.
After getting pretty deep into the discussion, we thought: this meeting would be much better if Joanna and Steve were here. We know quite a bit about your situation, but can’t fully flesh out the ideas without your help and collaboration.
If you’d like, we can swing by sometime in the next few weeks to discuss. If so, we’ll write up an agenda to get us started so you can get the sense of the big picture of a few key areas we were talking about.
There are innumerable varieties of length, tone, and specifics you can communicate, but the ideas are to
- intrigue them with the possibility of creating value that’s really worthwhile to them,
- with a straightforward approach,
- that invites collaboration.
These three points are critical for your messaging if you want to generate more leads with key accounts.
If this were cold prospecting, you might see advice to include something like, “We’ve been able to help organizations like X and Y to increase the speed of their new location openings by 21%, saving an average of $400k per opening.”
This can be a good approach when there isn’t an existing relationship, but it tends to be overkill for someone you know. If you have a good relationship, they should say yes to a meeting, or at least ask to find out more, and you can take it from there.
If they ask questions, let them know the gist of what you’re thinking. You might say that you’ve been working with another client, and a few innovations you’re produced there are generating great results like you mentioned. In any case, keep the tone of the initial outreach conversational.
It’s a revelation and a relief for many sellers to know that they can (and should) reach out to existing clients with a conversational and straightforward approach that doesn’t make them feel too salesy. At the same time, the approach won’t upset the relationship, and will, indeed, generate more leads and fill the pipeline with new business opportunities.
The Power of Strategic Account Management
There's no question that strong account plans and planning correlate significantly to Top Performance. So significantly, in fact, that the strategic account plan is the hub that connects the spokes of the Strategic Account Manager Competency Model.
At RAIN Group, we have honed this model over many years of working with large and mid-size organizations to optimize their strategic account management success, and through our benchmark research reports in both selling and strategic account management.
If you want to make your strategic account management a success, attend to each of areas in the SAM Competency Model.
1 Whether they have that title or not, we mean the people tasked to grow accounts. This can be key account managers, global account managers, sales executives, partners and professionals and services firms, etc.