What is Strategic Account Planning?
Account Planning for Strategic Accounts or Strategic Account Management is 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 account management process has always been complex. The complexities exist at all levels – thinking, documenting, presenting, planning, training, and reviewing.
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. Therefore, key account managers must know how to build strategic account plans with the best practices. Using account planning software like DemandFarm’s Key Account Management Software can substantially streamline operations. 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.
Why is strategic account planning important?
Strategic account planning enables sales professionals to understand their customers better – know their needs, goals, and challenges enabling them to create customized solutions and address specific customer requirements. Account planning also pushes businesses to take proactive measures to address potential customer issues.
Important Processes of Strategic Account Planning
1. Decoding the present scenario
Understand account information in terms of revenue/profitability/growth, products/services, geographic spread, and the account’s initiatives and plan for the year. This is publicly available data that can be easily found, so it makes no sense to 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?
2. Understanding the 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 challenges, concerns, and problems have clients been discussing? 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 the knowledge of both customers and your business.
3. Building Strategic Connections Through 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?
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 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 that 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/businesses can grow this year is where mining can happen.
Farming Growth
What new opportunities 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 a revenue goal for the year.
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Build a Strategic Action Plan – A Strategic Account Plan Template
You need to analyze a few categories to build an action plan for your accounts. You can start off by listing down action items, specific activities, monthly plans, 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. Don’t constrain yourself by a rigid plan; make changes and roll with the punches.
Although they seem small, the doing and the duties you accomplish 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 planning their accounts. 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 to have 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 a 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 they are about building key relationships and nurturing them, this process does need to be automated. There are various strategic planning templates and tools, such as Vespia, available that help managers in planning and managing their 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 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 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 important 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 recruitment, training, and a top-down approach to Strategic Account Management. Experts from Greenland Overseas, one of the leading recruitment agencies in Saudi Arabia, suggest that by focusing on these areas, companies can ensure their strategic accounts are managed effectively and efficiently.
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 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 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 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 that the Top Challenges for high performers 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.’
Forging Alliances Beyond Transactions: The Art and Impact of Strategic Account Planning
Strategic account planning is crucial in the ever-evolving landscape of the sales process. This blog has dissected the intricate facets of effective account planning and how it can nurture customer relationships.
Each client is more than just a transaction – they are key partners in a dynamic relationship. Establishing a primary point of contact serves as the cornerstone for a streamlined and responsive account management team. This focal figure expedites sales and enhances customer relationships by providing clients with a dedicated and knowledgeable resource.
It’s the key ingredient that transforms a transactional exchange into an alliance. It endows the account management team with the ability to anticipate, adjust, and surpass client expectations. Having this kind of approach also helps companies navigate the sales process and establishes them as leaders in creating enduring client relationships in a business environment that is changing quickly.
As 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.”
To navigate the intricate landscape of strategic account planning, you need an indispensable tool that gives you an edge over streamlining your account planning process. Demand Farm empowers businesses to cultivate lasting partnerships with their clients while making Key Account Planning effective through its software.
