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In this write-up, we discuss the top strategic account management strategies that enterprises should be aware of.
Building value-driven strategic connections with your important clients can aid in long-term development and retention, maximizing the income potential. This approach is called strategic account management for enterprises (also known as key account management).
The strategic account manager’s responsibility is to pinpoint the major clients who, in comparison to other regular accounts, produce the most income and profitability.
These managers serve as a link between the business and the many parties involved with the customers. By starting small, as with a free trial or test project, offering value, and fostering trust, the goal is to increase customer lifecycle value.
Let me explain what may seem like a cruel statement. Imagine that you run a thriving software business with hundreds of customers. Large corporations and small businesses are among your clients.
If you do everything well, even your tiniest customers might recommend you to someone else’s company. However, your corporate clients have locations worldwide, and if just one of these accounts were entirely sold, it might significantly alter the course of your company.
Do you want to handle both accounts equally?
No matter how many clients you have—ten or 10,000—some will be more crucial to your business’s future development than others, and not all will be created equally. Therefore, a sales leader must identify their strategic accounts if they are not of comparable value. To increase the revenue from their most valued client relationships, the top sales leaders design formal, quantifiable, and repeatable processes.
When a business has the potential to expand its income organically from its strategic accounts, it can grow its market share while paying less for new customers. Remember that sales are concerned with the present, whereas strategic account management is concerned with the future.
Strategic key account management’s primary premise is to start small and expand over time. This might be a free trial to get you started with some businesses. Others might use a proof of concept (POC) in a single department at a site.
Whatever the strategy, the fundamental idea is that new business partnerships frequently begin with modest prospects and, if trust is gained, develop over time into larger, more valued relationships. The most crucial factor is trust. Your core customers will give you more business if they believe in you more.
The strategic plan acknowledges that trust must be earned rather than granted. Making sure the account manager has a strategy to build trust is your responsibility as a sales leader. The partnership will continue to grow as long as there is mutual trust.
The guiding principle of strategic account management is that your current customer base is your best source of future sales. Choosing which clients to invest in and allocating certain resources for growth is crucial. Instead of focusing on upselling or cross-selling, strategic account management emphasizes collaboration and problem-solving.
Strategic key account management has undeniable long-term economic advantages; you will maintain your best clients for longer, become more valuable over time, and your client acquisition expenses will go down. It is not a plan to let your top clients run the show. The road to consistent revenue and organic growth is to develop a comprehensive account management plan.
Although it necessitates planning and investing in your team, strategic account management is the best method to boost sales and create enduring relationships. This is where the key account management strategies come into play.
Here are the top key account management strategies that you should adopt in your enterprises today!
Account managers accomplish account expansion through upselling or cross-selling more products to current clients. As a result, the organization can raise earnings without acquiring new clients.
Research repeatedly demonstrates that selling to and keeping existing customers produces a higher return on investment (ROI) than acquiring new consumers. Customer acquisition costs (CAC) have climbed by 50% over the previous five years, according to ProfitWell. To prevent churn or the gradual loss of consumers, account managers must strive to deliver exceptional service and guarantee buyer success.
Here are some of the ways to enable account expansion:
The customer’s interaction with your business does not end after they make their initial purchase. After they begin utilizing your product, they ought to achieve several objectives that show them the advantages of working with you.
A CSM facilitates this journey.
This is how the procedure might proceed:
A QBR would, in an ideal world, involve high-touch interactions with each account. However, this is most likely unattainable due to limited time and resources. Instead, consider using a survey, email, or phone call to review each customer’s milestone and build a strategy for the following step.
The client and CSM should evaluate whether the additional product assisted the customer in achieving their intended milestone following a successful expansion. This procedure may take place after the new purchase, during the QBR.
Reviewing the success of expansion demonstrates to the customer that their satisfaction comes before your profit, which promotes trust and customer loyalty. Additionally, it lessens the possibility that they will feel exploited and decide not to have their contract renewed.
The review session warns CSMs (Customer Success Managers) against closing a deal for the wrong reasons because this decision will affect whether they get paid.
CSMs and their managers should be on the lookout for ways to always make the customer experience better. Find trends with each QBR and make any necessary adjustments to the client success process.
Analyze accounts that have already seen growth, for instance. What features do they share? Exist any characteristics that could suggest a consumer is a suitable prospect for cross-selling or upselling? Identify these traits, and teach CSMs to pay attention to and respond to them.
Next, consider situations where accounts grew, were withdrawn or were not kept. Was a remedy provided when it was not necessary? How can CSMs identify and avoid making the same errors again? You may more effectively ensure customer success and higher revenue by reflecting on what is working and not.
No matter how long you have been in charge of an important account, it is likely that the customer still sees you as a disposable commodity. Ultimately, this causes your important accounts to have lower satisfaction levels and increased churn rates.
To prevent this, you must show them the value you add to their company and go above and beyond to meet their expectations. Key account managers’ top concern at night is undoubtedly customer retention. It is not essential, which is fantastic news.
Key account managers can ensure they are working hard for their customers and smartly with the proper approach (and the correct tools). For each significant account connection, this entails establishing a fundamental strategy that may be used.
The key components of this strategy should be:
Even in normal times, there is some demand to cut operational costs in most enterprises. The requests from senior leaders to deliver “a number”—a general strategy not specific to any one cost element—are the most unproductive.
This kind of directive is particularly frequent during times of crisis; it often results in a quick and frequently fleeting response. However, it is crucial to recognize where your company is in its cost management path. While making short-term cuts may be necessary, it is still possible to do so while properly accounting for all associated hazards.
Make sure decisions are made with a complete grasp of the business impact and avoid budget cuts that transfer spending since this will likely result in the expenditure returning at a later time or location without providing the organization with any gains.
Instead, start by eliminating unnecessary and low-value tasks (such as retiring duplicate or underutilized systems), rationalizing services (like eliminating redundancies), and renegotiating with suppliers.
In all circumstances, identifying the actual cost driver and lowering or eliminating it to prevent it from resurfacing or moving to another area of the budget would yield the greatest cost-reduction benefits.
However, even in an emergency, be sure to weigh the commercial value against the volume of anticipated savings. To describe how you will choose and prioritize particular initiatives, define targets and milestones, and make cost decisions, find a consistent language and an organized method.
To strengthen the connection between cost management and business performance, centrally organize this plan and take personal ownership (or delegate this responsibility to a direct report). When economic pressure eases, use the same strategies to optimize costs and value proactively.
Does your company have a vibrant community of supporters? In that case, great. However, it is just a partial victory. After finding your advocates, the next phase in your advocacy journey is to cultivate solid relationships that encourage them to want to give back. Begin by gratifying consumers, freely sharing value, and developing connections.
It will not be difficult to mobilize customers later if you have sufficiently engaged them. You would be astonished at how strongly individuals are motivated to help those who have helped them via reciprocity. Additionally, you may use your ties with your clients to your advantage in the future to find references, testimonials, product reviews, guest blogs, and case studies.
Here are some ways to nurture your advocates:
Finding fresh possibilities to advance your client’s business is one of the most crucial elements of strategic key account management and leadership. Utilizing the relationships, you have established to identify the potential issues your customers may face is the first step in insight selling for strategic account management. Then, using your abilities, you can cross-sell, up-sell, or create a whole new product that meets your client’s needs.
Considering the complexity of these accounts, it is undoubtedly challenging to adhere to the best practices for strategic account management. Many initiatives in terms of technologies and processes can help you, but not all are as effective as having Key Account Management software. 47
By eliminating tedious processes, Key Account Management (KAM) software will free up your Strategic Account Managers’ time so they can concentrate on producing steady, consistent revenue that will support your business’s long-term growth and success.
Dattatraya Shetty is an IT Professional with 2 Decades of experience in areas of Product Development, Implementation & Service Delivery Management. As the Head of Implementations and SOC Compliance in Smartkarrot he is on a mission to provide relishing customer experience.
Published October 28, 2022, Updated August 03, 2023
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