Blog Article

The Cost of Poor Account Management

Account Management – An Ill-Defined Role?

The Background

Organizations recognize that their life blood is their current clients and their ability to maintain these revenues, so they put their ‘best’ salespeople into the role of account manager.  When we look at the job descriptions of these people, they mention ‘relationship building and problem resolution’, a mention of maintaining revenue and a nod in the direction of future growth.

The Issue

Customers remain loyal to suppliers because they receive the service they require at a competitive price and the supplier is seen to ‘add value’.  This value is added in many ways:

  • Ease of doing business
  • Linked systems and stock management
  • Superior product
  • Personal relationships across the ‘supply chain’
  • Responsiveness and going the extra yards
  • A built up knowledge of the customer’s business

Looking at this list, we need to consider which of these value-added areas are genuinely impacted on by account managers.  Some perhaps, but certainly not all.

With a combination of loose job descriptions, ill-defined roles and ‘difficult to measure’ contributions, a number of things happen to account managers (usually our best and most expensive resource).  They get distracted into low-level administration tasks, or become an extra and un-needed link in the problem resolution process.  There is also a tendency to maintain relationships with people they like and can easily get to see, rather than with more senior people.  Some sales training is also guilty of encouraging ‘loose’ practices.

With one client, when we diagnosed their senior account managers, we found that  When we took out the administration and other customer care’ work that could and should have been done by better and cheaper resources, they were only in selling situations 8% of their time. 

The Solution

  1. Account management is a company wide responsibility and most activities are not best carried out by sales people.  It is a team effort and the team needs to be assembled and briefed on their responsibilities.    People in technical, finance and distribution roles should deal directly with their counterparts; sometimes the account manager is no more than a bottleneck.
  2. If you divide your sales operation into ‘hunters and farmers’, ensure everyone understands that farmers produce things too.
  3. Make it absolutely clear what needs sales people and what does not.
  4. Ensure account managers have clear objectives and outcomes for all customer activity.
  5. Sometimes organizations feel that account managers are the ones to deal with the problems, because they have the ‘relationship’ and the ‘skills’.  Consider introducing others to the customers face to face so they develop the relationship.  It is also important to give these key people skill development in problem solving and related subjects.
  6. Provide sales training to all who need to execute this strategy

One of the techniques we have found most helpful is to re-define the role from account management to account development.  It has a completely different emphasis and a clearer set of responsibilities.  An account development role typically looks like this:

  1. Define the account development objectives for the client (24 months). This is a combination of revenue and margin, tactical penetration of products, or tactical penetration of divisions within the customer’s organization.
  2. Agree the actions appropriate to achieve these goals.
  3. Agree a strategic account planning process.
  4. Set parameters for activity and agree what happens if anyone (internal or external) makes requests of the sales person that are outside these parameters.
  5. Set milestones and dates.  Where do we need to be by the end of quarter one, etc.
  6. Agree the skills and capabilities needed to make the plan successful and provide coaching / development as deemed necessary.
  7. Define the review process and contingency if objectives are not met. 

This is a critical process, otherwise you have your most talented, experienced and expensive people adding little value.  We interviewed a senior sales person during a client diagnosis, who told us the account management role was a reward for the years spent selling!

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