Three Common Mistakes in Account Management
If you are a business owner, you would be surprised to learn these common mistakes made by many in Account Management. Many companies have different definition of the role of Account Management. Some equate it to Sales. Some companies define a customer service function as Account Management. Such wrong definition of roles can lead to poor management of customers and affect your company’s long term sustainability. Let’s examine 3 of the most common mistakes made in Account Management:
- Mistake #1 – Assigning high sales targets and rewarding by commission
Companies have to recognise that the purpose of Account Management is to manage your key customers who are contributing substantially to your revenue. Losing your key customers will lead to great loss in revenue. When you assign high sales targets and reward your Account Managers with commission, your Account Managers will only be motivated by closing sales and earning commission. They will not be interested in serving customers in activities that will not lead to sales.
Companies should consider giving a high base salary to Account Managers and rewarding them with year-end or quarterly bonus for customer retention. Conducting customer survey is an effective way to measure customer satisfaction which has a direct corelation to the performance of the Account Manager. Hence, companies can reward Account Managers base on results of customer surveys.
- Mistake #2 – Assigning an entire industry sector to an Account Manager
Many companies segment their customers by industries and then assign each of their account manager to manage an entire industries or a few industries. This makes it easy operationally because any enquiries from a specific industry can be channeled accordingly to the right Account Manager. However, if your Account Manager is busy serving new clients or answering many enquiries from customers that may not be contributing sustantially to your revenue, they will not have the time to visit existing Key accounts to foster fruitful, collaborative relationship. You will not be achieving customer retention of Key accounts.
Account Managers’ salary are high and hence, their talents should be deployed into serving Key Accounts. Handling common enquiries can be served by customer service officers and having well equipped knowledge database faciliated by Knowledge Management softwares. In this way, you are optimizing your Account Management resource, ensuring that you achieve customer retention and leveraging on technologies to reduce manpower and increase productivity.
- Mistake #3 – Not having an Account Management Strategy
Very few companies sit down with their Account Managers to work out Account Management Strategy for each Key Account. This can result in the Account Managers not knowing what they should achieve for each customer account.
It is important that management and Account Managers sit down to work out each strategy for each specific account. Every customer’s organisation is different, with different objectives and key personnel. It is the role of the Account Manager to know who in a customer organisation plays a part in influencing purchase decisions, who are the decision makers and who are the users. It is also important that Account Managers discover the goals and business objectives of the customers. Hence, the strategy for a specific account will identify the following :
- Who (in the customer organisation) to target
- What actions to take
- How to and the resources needed to achieve those actions