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Find out the top 8 CRM challenges encountered by Key Account Managers today. Gain insights and strategies to overcome these obstacles.
A key account means one of your business’ most valuable customers. How do you determine a client’s value to your company? While the term value is subjective, you can use a few parameters to recognize these customers, such as:
After identifying these clients, you need to adopt an effective key account management strategy in order to cultivate mutually beneficial long-term relationships with them, which, in turn, augments your profits from these accounts. In fact, a survey by Bain & Company shows that a 5% rise in customer retention results in over 25% surge in profits.
The key account manager is then supposed to act as the first contact point between these clients and the business, dedicate resources, and hold meetings with them. The main aim of this practice is to help grow the number of key accounts in order to attain mutually beneficial goals and maximize their value. Thus, key account management is not just concerned with selling products or services to customers but rather seeks to have continuous revenue generation for the long run.
It’s, therefore, essential for the key account manager to help the business increase the number of the major accounts while at the same time ensuring that the existing ones are retained. But like any other role, these professionals grapple with various obstacles in their job. Please read on to learn some of the CRM challenges faced by key account managers today.
This is perhaps one of the leading CRM challenges an account manager faces. While account management basically focuses on nurturing mutual customer relationships, key account managers are tasked with two main responsibilities; to aid retain the existing clients and increase opportunities. They, thus, need to understand the customers’ goals and help achieve them. This now becomes a challenge.
An account manager ideally acts as a long-term trusted consultant and liaison to clients, in contrast to the conventional sales role, which primarily focuses on client acquisition and is temporary. In other words, the sales responsibility is transactional, while account management is interactive in nature.
Understanding the customers’ needs is vital as it enables account managers to provide them with important information, meet these wants, and develop long-term relationships with them beyond the first sales transactions.
If you’re looking to enhance customer retention, your business’ account management team must be strong. Since account managers act as the first contact point between a client and your firm after a sale, they need to be able to facilitate communication with customer support and sales teams, resolve clients’ conflicts, and understand the customers’ aspirations and pain points.
Account managers are undoubtedly key in customer’s satisfaction as the former serve as the latter’s advocate within your company. Account managers, hence, worry about satisfying your clients in order to retain them in the long run. However, they should know that a number of aspects influence the customer satisfaction rate, including:
The main issue, in this case, is that a firm is not properly aligned to solve the customers’ problems and manage their increased expectations. But this can be averted if your company has a functional funnel-like structure. Don’t, however, start with account managers if the entire organization can’t go beyond the departmental objectives and embrace the idea of helping customers succeed.
Another possible issue may be lack of ownership and resentment by some regional salespersons, especially when a client at the national level is tagged as a major account. In this case, the regional salespeople may consider to have lost a local customer to a key account manager, and as a result, stop supporting them altogether. To prevent such as scenario, account management incentives and responsibilities should be carefully managed.
Corporations with independent lines of business and sales teams can face some challenges in case one line of business, and not all, decides that a certain customer should be a key account. From the other clients’ standpoint, the sales representative would send mixed and confusing messages, thereby leading to detrimental impacts on the efforts of the key account manager.
What sets apart key accounts from the less significant ones is their value in terms of fiat currency. This can either be profit or revenue. A majority of enterprises usually set a revenue limit and all the customers capable of generating revenues or profits greater than this ceiling are designated as key accounts or clients. The problem comes up when one account manager is assigned a lot of key accounts to manage.
So, it’s prudent to engage different account managers if you have too many key accounts that would overwhelm one account manager to take care of. It’s vital to note that one person can’t possibly gain sufficient knowledge about all these customers, build strong relationships with them, and incorporate the suppliers’ resources. Let alone guaranteeing success when required to do all that for every client.
The selection of key accounts should be strategic. Apart from revenue, you should put into consideration several other aspects, such as their market position, global coverage, growth potential, and market influence.
The implication of having many account managers take care of key accounts is the ineffectiveness such a situation creates. While a client might be satisfied with the service or product they get in their hour of need, your business may not grow that much in the long-term future.
Most businesses employ the 80-20 rule, commonly referred to as the Pareto Principle. Companies use this tenet to point out that 80 percent of their revenues are only from 20 percent of their clientele. They consider it to be more advantageous to concentrate on this 20% of all the customers and market to them in particular, as they would be guaranteed 80% of the total earnings.
Building strong relationships with everybody can sometimes be daunting for an account manager, especially when working with numerous customers. But account managers must avoid favoring some clients, and instead, endeavor to offer quality services to all without bias. They should pay attention to all accounts under their care to be considered successful. Otherwise, they may risk concentrating on the major clients and ignoring others whom the company also gets revenue from.
One way to avert such a scenario is to recruit more account managers as your business expands to have enough account managers to deal with different customers and prevent staff members from being overwhelmed. But this isn’t the only approach account managers can use to create equally strong relations across board. They can also do so by:
Another way account managers can build strong connections with clients is to find the best way to humanize their work, particularly when communicating with them. Talking with customers about other matters that are not related to work can also help ease any prevailing tension when preparing for meetings or making high-stake presentations. While it’s crucial to respect the line between casual and business relationships, having a personal connection with clients helps build rapport and understanding their pain points.
One of the roles of an account manager entails being his or her team’s direct extension. They are tasked with communicating about the customers’ priorities, needs, and wants. Account managers, therefore, need to have an in-depth understanding of the clients they manage if they would like to impress them.
One more important aspect that can help account managers to build robust relationships with customers is by always being transparent. They should normalize communicating frequently with clients and before problems come up. Customers should always be notified about any news, whether good or bad, as failure to alert them can result in even bigger issues that could cost your business.
Sometimes account managers are tied up with a lot of clerical work such that they overlook strategizing how to talk to their customers. This can create problems when they are required to solve issues that crop up abruptly. Account managers should know how to handle issues as they come up. This entails being able to think quickly and having the right tools in order to remain organized and come up with the requisite solutions.
While it’s important to have the capability to reactively respond to unexpected problems, account managers should always endeavor to be proactive in their response. This means that you should have the right systems in place to allow account managers to be able to forestall and preclude problems before they emerge.
These two approaches to handling issues can assist account managers keep things running seamlessly for both your customers and the organization at large.
It’s common for an account manager to lose important relationships, especially due to the widespread stiff competition. But you should advise them not to panic, and instead, reach out to other key stakeholders in the company and seek for explanations.
This also presents them with a great chance to request for feedback to help them know where they made a mistake and how they can improve going into the future. This move will make your clients know you care about their wellbeing and ensure that all account managers are always attentive when dealing with customers to avoid messing up things.
When an account manager asks for suggestions on where they should improve, it exemplifies that they value the client and their relationship with your business. And if such a customer doesn’t go away, they may end up being more loyal to your firm than before, thus bolstering their overall value.
These are unanticipated and unplanned requests by customers. They can pop up because of different reasons like unforeseen human errors, poor communication, and abrupt changes to the budget or schedule.
Ad-hoc requests are unavoidable, especially if your clients have the tendency to habitually change their minds. If the number of ad-hoc requests increases for one account manager, they should not worry but rather deal with them without losing the clients’ trust by having a practical customer retention strategy. They can do this by:
All ad-hoc requests need to be recorded as they come because unaccounted requests can create significant misunderstandings and mishaps with your customers. Besides, tracking ad-hoc requests guarantees transparency and accountability for everybody.
Since ad-hoc requests are not planned for, they should assess their workload. After that, they need to identify and start with the most significant tasks before they can pay attention to the clients’ demands. That way, account managers are able to know whether they have the requisite expertise and time to handle these sudden requests.
Notwithstanding accepting customers’ ad-hoc requests, they must stick to their management practices. This helps avert potential errors when dealing with urgent requests while at the same time keeping all tasks on track.
Among all CRM challenges, this is possibly the most difficult one to contend with. Great instincts and experience are not the only factors that determine the success of an account manager. You should realize that the working processes you have in place are also very crucial in attaining your company’s goals and objectives. These procedures should be executed well in advance to make sure that they align with your organization’s customer policy to help account managers lower the possibility of making mistakes.
The ideal customer support strategies are often data-driven and help understand their expectations. You must know your clients’ demands, needs, and satisfaction levels to deem your chosen approach to be infallible. Doing so ensures consistency and provision of better services to your customers. The outcome is improved customer satisfaction and reputation of your brand.38
To sum up, account management and strong customer relationships are vital for the smooth running of any enterprise. That’s why it’s important to have a competent account manager who can be able to overcome the CRM challenges they may face when performing their duties. That way, you can rest assured that your most valued clients can keep coming back for more.
Stanley Deepak is an accomplished sales and marketing professional with 15+ years of experience. He loves tech products and book reading. He writes on philosophy and culture on LinkedIn.
Published June 28, 2023, Updated June 29, 2023
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