Account Management: The Next Business Growth Frontier
Suneal Rao
The first sale is no longer sufficient to generate long-term, sustainable revenue growth. It’s even more important in today’s digital SaaS world where customers have more options than ever before and switching costs are at the lowest point in history. Account management has to join sales as a strategic revenue function responsible for not only managing existing customers, but also extending the lifetime value and turning them into strategic, long term relationships.
In this article:
- Recurring Revenue in a Digital World
- Account Manager | The Challenges as Strategic Revenue Drivers
- Productive, Effective, and Structured Account Management
How To Be A Successful Account Manager
Recurring Revenue in a Digital World
“By 2020, all new [software] entrants and 80% of historical vendors will offer subscription-based models” – Gartner
We are seeing a trend of business being conducted via digital channels and paired with a subscription style business. We have seen this in the consumer world, where the subscription e-commerce business has grown over 100% per year for the past 5 years, and in technology services, where all new entrants in software will be SaaS based by 2020. This consumer trend has clear implications for how business and account planning gets done as individuals now have lower barriers to entry and more choices resulting in decreased customer retention. This means that customers, or more accurately, users, expect to “try before they buy” and to make incremental investments over time versus one large purchase (i.e. SaaS vs. on-premises).
In this world, a land and expand strategy is common, so vendors are increasingly counting on revenue generated after the initial transaction and organic pipeline expansion to grow their top-line, with Gartner research showing that 80% of a company’s future revenue will come from 20% of existing customers. This points clearly to the need for organizations to have a strategic account management plan to increase customer retention and maximize growth potential in their business. Unfortunately, sales organizations face key challenges because they do not have the right technology to develop their organizational capabilities.
Account Manager | The Challenges as Strategic Revenue Drivers
“Only 28% of sales leaders report that account management channels regularly meet their cross-selling and account growth targets” – Gartner
At XANT, we believe that account managers need to be properly enabled with industry-leading tools to maximize their growth potential. New deals and customer acquisition are not enough to meet revenue goals. Today, account managers face a series of challenges to unlocking growth in their existing account base”
- Sufficient Territory Penetration: Account managers only touch a small percentage of their total accounts, focusing on the “easiest” customer to speak with or those with whom they have the best relationship. However, these relationships are not always the most ideal to develop and foster.
- Intelligent Account Prioritization and Coverage: There are too many accounts in any territory to determine which is a key account to develop and where an individual should spend their selling efforts, or track past activity.
- Sales & Marketing Execution and Organizations: It is difficult for account managers to fully execute on marketing campaigns because it requires too many touches and organizing it all is challenging.
- Basic Account Activity Tracking: There is limited CRM tracking and visibility into account manager efforts, which makes it hard to justify work that has been done, creates challenges during transitions, and prevents management from optimizing existing processes or practices.
- Account Renewals: Renewals are managed manually with no structured playbook or sales strategy to engage customers in a thoughtful, strategic way to win their business back.
Shifting the focus of account management to a strategic revenue generating function, and enabling them as such, will provide incremental pipeline for any prospective vendor.
Productive, Effective, and Structured Account Management
Our vision for the future of account management is an organization enabled with technology that provides visibility into customer interactions, automates sales expansion plays, and maximizes lifetime customer value by uncovering new opportunities for growth. We believe that the account management team should see clear benefits from the tools that they use, such as:
- Intelligently prioritized accounts
- Structured cadence and outreach into upcoming renewals
- Visibility into customer touch points and activity
- Systematic, complete account coverage
- Increased up-sell and cross-sell opportunities
- Increased productivity and account coverage capacity
Our customers are able to drive more revenue from existing accounts by knowing where and how to spend their time. Our unique platform uses AI powered by Collective intelligence[1] to help identify the right accounts to target and further helps reps intelligently engage those customers.
Account managers also benefit from more relevant CRM data based on actual response rates from specific email addresses and phone numbers, improving the overall productivity of the team. Combining engagement with AI that is powered by Collective Intelligence will enable account managers to maximize their effectiveness, and ultimately, create a strategic revenue function.
[1] Collective Intelligence is the use of real-world, cross-company outcomes that occur on our platform to guide our users via Machine Learning.
How do you think Account Management help generate recurring revenue? Share your thoughts in the comments section.
Up Next: The How and When of Sales Training for Sales Management