Account management is another term for personal, direct sales. Unlike cashiers or retail salespeople, account managers are responsible for locating prospects in the marketplace, engaging prospects and turning them into loyal customers. Account managers work directly with individual clients over longer periods of time than retail salespeople, and the best account managers apportion their time strategically according to their most profitable clients.
Strategic account management increases the cost efficiency of salespeople's compensation by focusing their energies on the most productive accounts. Whereas a door-to-door salesperson may spend the same amount of energy on every prospect, a strategic account manager learns to spend more time servicing his most loyal, highest volume accounts without necessarily neglecting smaller accounts. This way, every minute a salesperson spends with clients generates higher average revenue.
Revenue and Profit
Total revenue and profit are increased in addition to the cost savings of strategic account management. Going the extra mile to serve the most profitable clients can generate the highest-dollar sales. Rather than trying to convince smaller accounts to make additional or supplementary purchases, strategic account managers target the largest accounts to maximize income.
Consider an enterprise-level software company that sells additional software product licenses at a discount, for example. Spending too much time trying to convince a small business that purchased one copy of the software to purchase a second license can be unproductive, whereas working on getting a multi-national conglomerate that purchased 50 licenses to purchase 50 more for its future needs can seriously boost total sales revenue.
Apportioning salespeople's time strategically among accounts can help you to retain your most profitable customers over a longer term. Smaller accounts may switch suppliers often to obtain price discounts and take advantage of promotions. Larger accounts generally look for long-term relationships with suppliers that invest time, money and effort to get to know their specific needs better than any alternative supplier. Building these relationships can ensure that your company survives as long as your customers do.
Word of Mouth
Aside from focusing on the most profitable accounts, strategic account managers also learn to focus their energies on clients who are centers of influence in their community, industry, church or other social group. Going the extra mile to serve customers that other prospects look up to can provide a powerful source of free word-of-mouth advertising, generating a steady stream of future clients.