Take your Account Managers for granted at your peril; research shows they are the part of your sales management team most likely to leave. As their role is based on building relationships, at worst their departure can put your customers in jeopardy. And in today’s employee market, finding a replacement can take months.
Someone will be burdened with extra customers while you fill the vacancy and when the vacancy is filled. Someone will have to mentor and hand over the work to the new Account Manager is found. This means briefing the new manager on the customer’s situation, teaching them about the company’s products and solutions, explaining the market and the trends, introducing them in customer communications so that the customer becomes familiar with them. Such a process might protect you from losing customers but it can also lead to employee burn-out.
Overworked employees with increased responsibilities eventually leads to low staff morale and high staff turnover. If the negative cycle continues the entire sales team may lose focus on your company’s mission.
Why is Turnover High among Account Manager teams?
We conducted our own industry Employment Survey in 2020, engaging with 200 candidates to identify the main motivators for candidates to change jobs.
While it’s no shock that a higher salary is ranked as the number one choice (64%) for respondents seeking new roles and given these are the future senior managers, efforts should be made to continue retain and develop them.
Agency Zen Pilot agreed that hiring account managers was a ‘bit of a struggle’ which they overcame by trying to ‘formulate an incentive structure that was advantageous for both the new account manager and our agency.’
“Of the nearly 700 account managers surveyed, 49% are measured by a single revenue goal that makes no distinction between retention and growth,” says Scott Collins, an advisor at Gartner, a leading research company providing business insights and advice. This statistic shows how Account Managers are incentivised towards preventing loss rather than promoting growth.
Account Managers see their responsibility and reward geared around delivering on retention, meaning they often see account growth as optional, and as such, don’t devote much time to it. Gartner research found that while ‘88% of surveyed account managers conclude that the best way to drive growth is to delight customers with world-class service’ only 28% of Sales Leaders report that ‘account management channels regularly hit cross-selling objectives.’
Shifting the Focus to Customer Improvement
Customers should stay with your company because they are seeing increased profits as a result of the relationship. Customers maintaining the same set of services year after year means those services are no longer tailored to the specific needs of their business; as the customer grows, so do their needs. This provides ongoing opportunities for you to engage and provide new or additional services as the business evolves.
By providing Account Managers with the motivation, tools, and training to identify and pursue improvement opportunities they can be actively involved in growing accounts.
Incentivising Customer Improvement
More clearly defining the responsibilities of the role will increase Account Manager’s motivation. However, creating an incentive structure that ensures Customer Improvement strategies are prioritised is essential.
Offering a ‘growth bonus’ at double the rate of retention bonuses gives your Account Managers the potential to increase their earnings, helping to shift their focus. To increase the cost-efficiency of the sales they make, agency ‘Zen Pilot’ suggests also offering a ‘Profitability Bonus’ typically between ‘1-3% of total account revenue’ scaled in line with how profitable each account is.
Making Account Managers focus on customer improvement through a larger ‘growth bonus’ is shown to also improve client retention. By offering customers a new perspective on their businesses (through opportunities to increase profits, decrease costs, and evaluation of supplier relationships) Account Managers ‘can increase the likelihood of account retention by 94%.’
According to Gartner, this is because ‘B2B buying behaviours are changing’ and ‘customers consider an average of 2.2 suppliers’ during every decision to renew an account.’ By leveraging their in-depth knowledge of clients to suggest change and improvement before competitors, ‘Account Managers can both increase the likelihood of growth by 45% and account retention by 94%.’
Making use of Internal Skills
To avoid falling flat in performance and increase motivation, training shouldn’t be neglected. This doesn’t have to be expensive; peer learning programmes and creating mentors with expertise to share best practices allow you to really leverage the talent within your team.
If you are interested in giving employees a fresh perspective, Account Management Training by Factor8 helps managers learn the skills to ‘propose better policies to revenue-producing clients…enabling the trainee to visualize account growth’. The Miller Heiman Group, has created the Large Account Management Process (LAMP) which trains Account Managers to ‘develop robust plans for strategic account management while increasing retention and growth.’
Other worthwhile resources like The Association for Key Account Management, Powering, Louise Collins Associates, and PMI cater to various aspects of account management training and can be very advantageous to use.