In sales, we often hear the terms hunters and farmers as they relate to various roles in the sales organization. Hunters are generally focused on acquisition, while farmers focus on client retention. But recently, the buzz term “account manager” has been thrown around more and more, and I know it is the next big thing in sales. Read on.
To start, let’s define the role of an account manager. An AM, in short, is the person who interacts primarily with the business decision maker and is responsible for retention and upsell of current accounts. This person works closely with the Customer Success team, that’s focused on usage, training and troubleshooting, and interacts directly with the end user.
Stop Treating Account Management Like Sales’ Stepchild!
(If your organization uses different titles then use the above as a guide for the rest of the article.)
When we think ‘account manager”, we often think of a relationship builder who schmoozes the client into renewals and upsells. Sales people look at that job and think “Hey, that’s easy! They don’t even have to put in the hard work or stress about closing quota. They just take orders.”
However, most companies that have been through their first major growth spurt recognize that account management will be the main driver of revenue in future years as the product matures, but the treatment of the group and the senior roles we hire for rarely reflect this. So why do view account management as a less critical role?
In the past, salespeople did everything.
Ah, the days of when salespeople were responsible for hunting, killing and farming their own deals. Because the first two are faster wins, the term “farming”–or what account management is seen as now–implies an easier task because the seed is already planted.
This is why I’m not a fan of the word “farming.” It implies a wait-and-see attitude versus someone who is proactive in engaging with their clients on ways to grow their business. Account management is not easier — it’s just different. It involves forward planning, customized strategies to gain loyalty, and building of trust as an advisor to keep out the competition. It’s less focused on short term highs, and more on long-term success.
Harvard Business Review reports that this split in roles is one of the most important changes in selling that has emerged during the past two decades! It’s not that salespeople can’t handle account management, it’s just that specializing in closing deals or nurturing a relationship produces measurable business benefits.
We have been too enamored by “new leads from cold or inbound prospects”.
We all care about metrics such as CAC (Customer Acquisition Cost), Sales Qualified Leads, and new opportunities created, but what about the other side where the grass is greener and much more receptive to your message? Where is the same accountability and focus on the account management side of the house? If you noticed, there are little to no books or training focused on AM. Why don’t most companies have SDRs for account management? Big companies like Salesforce do, and they generate a lot of new dollars.
We have medium-sized and larger companies coming to us daily asking for help to build out the outbound machine. When we dive in, we walk through one very simple exercise–Where do your best leads come from? Is the goal to close more deals now? The answer, in order, is simple:
- Current customers
Our response, in this case, is always “Ok, let’s talk about what you are doing to generate leads from 1 and 2 first, and then maybe, possibly we should talk about outbound in the coming months.”
The proof is in the results. One of our private companies came to us last year with this exact question, and we had the same conversation as I listed above. They bought in, and the results spoke for themselves. They have a smaller client base because it is a larger ticket sale, about 140 large and mid-sized companies.
In the first 60 days, they set 60 appointments with new contacts within their largest client accounts, added hundreds of thousands of dollars to the pipeline, and closed one deal in the first three weeks. Outbound should be a big part of an enterprise sales strategy, but not the only thing. Having a great AM strategy is equally important and will drive your “predictable revenue” just as fast.
What if we started encouraging companies to develop client retention and upsell process in conjunction with outbound and, most importantly, made it a results-driven, KPI-managed machine? Makes sense, seeing that’s where the lowest hanging fruit for new leads should be, and where much more predictable revenue can actually come from.
VCs & Sales Leaders need to make this a priority now
Many VCs, sales leaders, and CROs focus on the “new business” numbers, putting on the back burner future revenue that may come from the business that already exists. This thinking makes it hard to put account management as a big player in game-changing growth, but when you ask a later stage founder or a big company leader after they shift to AM with the same vigor as outbound, they all say the same thing — “We should have done this sooner.”
From our experience, we see sales and account management living in the same organization for non-transactional sales as the best way to go. The activities for the roles are complementary and are aimed at the same goal: generating more revenue.
By having both of these organizations aligned, we also create consistency in the buyer journey, the process a typical business buyer takes as they move through the sales funnel, and a systematic way to guide the customer through the journey from beginning to end and throughout their lifetime with the company.
With Lead Gen, Sales and AM aligned, we can create a perpetual sales cycle that starts and never ends until the account reaches its maximum penetration point. Even then, we should be looking to develop new products to make the process continue…forever.
Additionally, CEOs and VCs see that “current account growth is going well or very good.” But the rub is that because there is no baseline for what really, REALLY good looks like and we have little insight into what could be. CEOs need to understand that the growth they are seeing now could 2-10x if they started to treat it more like the sales machine. We have seen it firsthand in 10+ clients over the last two years. We need to hold accountable and optimize the account management machine with the same vigor as our sales org.
The rise of account management is starting now
Account management’s importance will rise through the roof in 2016 and 2017. Thinking of sales and account management as the perpetual sales cycle creates predictable revenue that grows and scales much faster than pure outbound. At Skaled, we have developed our content and methodology for building AM machines that behave and act like sales machines, because that’s what they are supposed to do.
We don’t advocate for, or build-out “farmer teams”, we build teams that take the first “kill” and use that to track and hunt more deals in that forest. Why go to uncharted forests first when you have proven revenue in the one you just closed? Account management is just as much a hunter as new sales, we just need to start hiring for and treating the group this way to ensure we optimize revenue for years to come.