What is Strategic Account Planning?
Account Planning for Strategic Accounts or Strategic Account Management is a process of building value-driven relationships with your key customers that can help in long-term development and retention, thereby maximizing the revenue potential.
It is a synonym for Key Account Planning. The strategic account management process has always been complex. The complexities exist at all levels – thinking, documenting, presenting, planning, training, and reviewing.
Therefore, key account managers must clearly know to build strategic account planning with the best practices. Using an account planning software like DemandFarm’s Key Account Management Software can reduce the time and effort by a mile but we’ll come to that later. Taking you through the entire process and strategies may be a bit too long for a blog. But in this one let me make the ‘thinking’ part a little easier with frameworks, directions, and principles for a phenomenal strategic account planning exercise.
According to a CSO Insights 2016 Sales Enablement Optimization Study, 90.6% of those surveyed said that strategic account planning was relevant to them and therefore they would do it.
Important Processes of Strategic Account Planning
1. Current Position
Understand account information in terms of revenue/profitability/growth, products/services, geographic spread, and the account’s strategic initiatives and plan for the year. This is publicly available data that can be easily found so it makes no sense to not use this to analyze your client’s financial position and organizational structure.
The most relevant questions and the ones that will be unique from your competitors are questions like:
- Which areas of your business are most important to you?
- Where do you see yourself in two to four years?
- Are there areas of interest that you might either reduce or grow?
- What kinds of obstacles do you worry about?
- What would you like to see from a prime supplier?”
Must Watch: Jenny Smith Byers, VP Client Services at TaskUs shares their experience around building & scaling processes for Strategic Account Management.
2. Voice of Customer (VOC)
Ask any strategic account manager and they will tell you that the days are gone when the client account landscape was represented by a one-way dialogue for engaging prospects. Today, account heads are shifting their listening and response mechanisms quicker as VoC represents a huge chance for driving loyalty and increased sales.
What are the challenges, concerns, and problems clients have been talking about? How can you address those problems with the products/services of your company? This kind of insight is usually not available publicly. It involves having an in-depth discussion with customers to understand their plan and pain points which can help in new product development or even tweaking the current product to suit their strategy and requirements. The success of this depends on the quality of relationships between the client and their customers, and knowledge of both customers and your business.
3. Relationship Management
With Accounts
You can have multiple types of relationships with clients, and they can be either Tactical, Cooperative, Interdependent, or Strategic. You can use a simple weighted attribute method to arrive at one of the four. A skilled account manager uses the best practices and strategies to plan and create the account management organizational structure with an account plan and process in place. Having the right training and using certain principles increases the skill set of the manager to deal with strategic accounts.
With People
Sketch an organization chart with hierarchies, titles, and roles of all the contacts that matter. What is also helpful is to identify your supporters/detractors/champions among those contacts. Who controls what budgets? Who influences whom, both positively/negatively? Why?
In order to convert deals and present your customers with a high-grade experience, you need to be informed of the positions your contacts hold within their business and their level of influence in the decision-making process.
Mapping their level of influence and their relationships within the organization can help you to concentrate your efforts on the plan appropriately. Relationship mapping helps the sales and marketing units of the business to optimize their lead generation plans and increase revenue from existing accounts. Modern technology keeps the method of creating relation maps automated. Gathering insights using modern technology can automatically keep your relationship mapping efforts up-to-date
4. Growth Opportunities
Based on the above 4 data points, identify the buying centers in the account and map which of your products/services is consumed in which buying centers. Understanding Buying Centers can help key account managers in strategic account planning and innovation. The Buying Center is a 40-year-old concept associated with Webster and Wind and can be hugely useful. The Buying Center is a part of the organization which involves a bunch of executives who have varying influence on the B2B buy decision. Performing a complete buying center analysis is an essential first step to help key account planning managers understand which messages and tactics best convey the value of their products.
That can give you an idea of two types of growth areas:
Mining Growth
Finding out which of the existing projects/contracts/business can grow this year is where mining can happen.
Farming Growth
What are the new opportunities that can be explored this year in your strategic account management process? That’s where farming growth comes in! All this can allow you to set yourself a revenue goal for the year.
Download Now: Your Guide to Cross-selling and Up-selling
Strategic Account Plan Template – Action Plan
To achieve the goal, list down action items, specific activities, monthly plan, and the support required along with timelines. We are a firm believer in keeping the key account management process simple yet powerful. Over-analysis can lead to paralysis so keep it short and simple. I would emphasize more action items and numbers, and less on theory.
In today’s dynamic business world, we would also change the plan if there are any dramatic changes in the situation changes. Don’t constrain yourself by a rigid plan, make changes and roll with the punches. Although they seem small, it’s the doing and the duties you accomplish that will ultimately get you to your goals. Even when your goal seems far off on the horizon, if you stay true to your action plan and perform your daily tasks following the key elements, success is inevitable.
7 Big Challenges faced by Strategic Account Managers
Once the managers start practicing the account plans, they realize the real-world problems or rather, challenges that they must face while creating strategic account plans. Let’s take a good look at the 7 Big Challenges faced while creating strategic account plans. Where did we get this top secret information? Straight from the managers themselves and their organizations, of course!
1. The eternal tug-of-war between short-term and long-term
Even when the organization has made a policy decision of having a Strategic Account Management cell for Key Accounts or Strategic Accounts, some managers may find it difficult to choose between the short term and long term. Many times, the short-term wins as it is more achievable and managers often feel a quick sense of accomplishment.
That’s exactly where the challenge lies; to choose the long-term over the short-term when the situation so demands. It isn’t enough for managers to hit short-term goals and give themselves the pat on the back, it is integral to concentrate on strategic account plan goals like maximization of customer lifetime value too!
2. Having access to an effective strategic planning tool
Strategic account management needs more work than normal accounts and hence better tools and templates. Although strategic account plans are about building key relationships and nurturing them, this process does need to be automated. There are various strategic planning templates available that help managers in planning and managing their strategic accounts well.
But having access to a suitable tool that is specifically designed for strategic account plans may be a challenge, to begin with. Challenges of strategic account management can be overcome by ensuring the account planning tool is made a part of the responsibility of the strategic management team and the leadership.
Case Study: Healthcare Industry Company Boosts Strategic Account Revenue by 30%
3. Having a good relationship with all key customers (other than that one key customer) within each Strategic Account
It’s not enough to have a good relationship with just one key person within one Strategic Account. People move from one organization to another. Strategic Account Managers cannot afford to put all their eggs in one basket and need to form good relationships with other key people within the Strategic Account.
This ensures that a great account isn’t lost, simply because the biggest influencer left the organization. A dynamic Org Chart can be extremely helpful to ensure that Strategic Account Managers know exactly where the influencers and detractors lie in an organizational hierarchy.
4. Interacting with enterprise-level organizations and key buyers at the top level
Sales Account Planning requires a CXO-level management involvement with any client. This bottleneck may arise due to a lack of training. This is very easily rectified with proper recruitments, training, and a top-down approach to Strategic Account Management.
5. The actual implementation of the Strategic Account Plans
Strategic Account Plans will remain so unless they’re put into action by a motivated Strategic Account Manager. The biggest detriment of a Strategic Account Plan is actually its implementation and thus it must be taken into account during creation.
6. Formulating a fair and comprehensive compensation policy for Strategic Account Managers
Since the conversion in a Strategic Account happens over a period, incentive planning and compensation for Strategic Account Managers cannot be the same as your Sales team, yet needs to be fair. Proper metrics need to be defined and implemented, which is a major HR challenge. It will keep evolving over time and will vary from organization to organization.
7. Training and skills in Strategic Account Management
What kind of training and skill sets do Strategic Account Managers need to acquire and how frequently do they need to be trained, is often the question. It’s a crucial decision that leadership needs to take, as it is not a good idea to take chances with the capabilities and delivery of the Strategic Account Managers. We are certain there are many more such challenges beyond the seven mentioned here.
What is essential to this subject is the fact that the Top Challenges for high performers do differ from the Top Challenges of the average performer. Average performers are more concerned about the most fundamental challenges that are lower in the challenges hierarchy, such as ‘having access to an effective strategic account planning tool’ and ‘the tussle between short term and long term goals’.
On the other hand, high performers would be more concerned about challenges such as ‘fair compensation policy for strategic account managers based on sales results’ and ‘effective ways of building and communicating value’.
Let’s conclude with what McKinsey says, “It’s not surprising to learn that those who use an analytic approach achieve up to 10 percent sales growth, up to 5 percent higher return on sales, and a margin uplift of 1 to 2 percent.”
