It’s time for account managers to position themselves to win big in 2024.
I recently offered a webinar titled How Account Management Teams Can Win Big in 2024. I discussed current market conditions and challenges and how account management teams can help their companies not only survive but also thrive in the future.
In this article, I share the highlights of the webinar, including the current state of sales and marketing, the fallacy of the “do more with less” mentality, and why it’s a setup for long-term failure. Finally, I’ll discuss the account management team’s essential role in delivering profitable growth as well as what account managers must do now to succeed.
Let’s get started.
Sales and Marketing are Currently Struggling
The current state of sales isn’t pretty, according to the B2B Sales Benchmark Report, 2024 by Ebsta and Pavilion. The report revealed that:
- Sales win rates are down 18%
- Sales cycles are 16% longer
- Deal values are down 21%
- 69% of reps missed quota (despite management proactively lowering them by 19%)
Plus, creating opportunities to fill the pipeline has become more difficult. It now takes 5 times more sales and marketing touches to create an opportunity, rising from 200-400 to 1,000-1,400 touches, according to Jeremy Donovan of Insight Partners. When we talk about touches, we mean a call, email, ad, social post, or any type of interaction with a potential customer.
Not only is customer acquisition more difficult but also the payback period has more than doubled in the last five years, rising from 21 months to 48 months. Therefore, if a customer churns within four years of signing, that customer has been unprofitable. Account managers can have a huge impact here as they manage up to 80% or more of the company’s revenue in years like this.
The Fallacy of the “Do More With Less” Mentality
If you’re doing more with less, you’re in danger of vastly under-investing in critical areas of your business to the detriment of your company in the long term.
People think they are being smart when they shave down costs, however this can hamper our long-term success. It can affect our profitability, growth, customer relationships, and the overall performance of the company.
Research into business performance across various B2B industries relating to the recession of 2008 to 2010 by Bain and Company reveals the long-term impact of behaviors during that time of economic uncertainty.
Bain reported that “Coming out of the last recession, the strongest companies went on offense early, while many of their peers focused on survival and waited for the cycle to clear. They pointed sales teams to top priorities among accounts and prospects, as determined by the account’s all-in profitability and potential lifetime value…And they focused on improving the customer experience.”
The companies playing defense had the “do more with less” mindset. They were in survival mode, reducing costs by cutting R&D, scaling back on sales and marketing, and laying off valuable talent.
Meanwhile, the companies that won in the long term were playing offense. They focused on profitable customers, prioritizing accounts with the greatest expansion potential, and improving customer experience.
The winners experienced accelerated growth of 17% compound annual growth rate (CAGR) during the downturn that continued at 13% for ten years after the crisis, while the losers experienced 0% growth during the downturn and only 1% during the ten years following the crisis. This resulted in the winners growing by an average of three times that of the losers, increasing their total value to four times that of the losers.
Therefore, it is counterintuitive in 2024, to say we need to do more with less when we need to do the opposite to succeed.
The Value of Account Management
Most account managers don’t know how to express the value they’re providing to their organizations, so nobody else in the company understands it either. Tracking success metrics and sharing them will go a long way and will help improve this situation.
Account management teams need to document what’s working and what isn’t effective so they can refine their performance over time. Then they can share tangible results data across their organizations to help inform people what exactly it is they do and the value they provide.
Account managers also need to gain clarity on what they actually do and the value they provide to help them focus their efforts. I like to distill it down to three things. The account manager’s job is not to lose customers, grow the ones that we’ve got, and let us know if something is at risk. If you do those three things, you don’t have to worry about all the other stuff, because the executives in your company will see your value.
How Account Managers Drive Value
In the absence of account management data, top sales performer data from the B2B Sales Benchmark Report can help us identify essential behaviors for account managers to deliver profitable growth for their companies. This is especially crucial when the stakes are so high during economically challenging times like these.
The report revealed that top sales performers do the following things:
- 588% are more likely to follow a methodology effectively
- More likely to adopt a proactive approach
- 483% more likely to update an opportunity weekly
- 412% more likely to have the next steps or meetings defined
- Have 415% more high-quality relationships
Translating sales performance data to the account management role to achieve client retention, expansion, and risk management gives us a toolkit for success. These are the things that account managers need to focus on to achieve value for their company.
This toolkit for success includes:
Know your customers inside and out: Learn as much as you can about your customers, especially your strategic accounts. Spend time with them, do voice of customer (VOC) interviews, and discovery calls. You want to understand how the reality of 2024 is affecting them, what’s going on in their world, and what risks and opportunities exist in their market.
Relentless focus on delivering customer results: Greg Daines talks about this all the time. Customer results are all that matter to your clients. Nothing else matters. NPS scores don’t matter, the number of people at your QBR doesn’t matter, and product or service usage doesn’t matter as long as you are driving measurable customer outcomes. And, if you don’t know what your customer wants to achieve with your product or service, you need to find out immediately.
Track your contributions and show value: Be thoughtful about sharing your results with the rest of the company. Here’s what we’re doing. Here’s our book of business. Here’s the renewal rate. Here’s where we overcame a challenge. Here’s where we expanded an account. Here’s the profitability per account and how it impacts our bottom line. Showing the value that you provide is critical, so they understand your value.
Rigorous process discipline: It’s no coincidence that the top sales performers are following a process. It didn’t matter what process they followed. The act of adhering to a defined process, like our KAM Process™, for example, is essential to your success. It helps eliminate the overwhelm and uncertainty of what to do next while helping you have time to be less reactive and more strategic.
Shift Your Focus To Thrive
Sales and marketing are facing significant challenges. It takes more effort to create an opportunity, win rates are down, sales cycles are longer, and deal values are lower. It’s little wonder that 69% of sales reps missed quota.
On top of that, breaking even on customer acquisition costs now takes more than twice as long as it did only five years ago, making customer retention more important than ever.
The ‘do more with less’ mentality is a losing mindset, setting businesses up for long-term failure. It’s time for businesses to be on the offense during challenging economic times if they want to continue to grow and thrive.
It’s time for account managers to rise to the occasion by understanding that their primary job is retention, growth, and risk management. To achieve this, you must know your customers, focus on driving customer outcomes, track and share your contributions, and follow a well-defined process.
Now is the best time to invest in your post-sales team to help achieve tremendous success and growth going forward.
Help your team build essential account management skills. Register your team members for KAMGenius.
