Are You a Strategic Account Manager?

Strategic accounts are important to software sales. If they’re highly visible, they provide credibility, both to your firm and your own sales efforts. If they generate significant income, they’re a source of ongoing revenue and commissions. But do you really have what it takes to be a strategic account manager? There are six criteria:

1. You must sell for a strategic software vendor. There’s a major difference between a major account and a strategic account. An account is "major" if it is responsible for a large amount of revenue. However, if that major account treats your products and services as commodities, the account is not strategic. An account is only strategic if the relationship has a business purpose beyond generating revenue. Therefore, unless your software is so vital to the customer that it’s pretty much irreplaceable, your firm is not strategic. In which case, by definition, you can’t be a strategic account manager.
2. You must have a strategic (rather than a tactical) focus. In software sales, a strategic account manager must have a broader focus than a run-of-the-mill account manager. He or she must be fully versed in general business issues and industry-specific issues, in addition to the features and functions of the software that’s being sold. Rather than seeking the immediate gratification of making a sale (and the quick commission), a strategic account manager values building long-term relationships in the firm belief that they will eventually generate revenue.
3. You must know how to move the relationship forward. In a strategic software account, progress results from a deepening of the relationship between your company and the strategic account. Even if you lose a big sale, you are making progress if the sales process opens new contacts inside new departments, gives you access to higher management, or leads to your inclusion in strategic planning meetings. It’s all about being part of the customer’s team and the customer’s overall strategy. (Hint: IBM has been doing this kind of selling for decades!)
4. You must add value to the customer relationship. You must learn everything you can about the account’s goals, problems, and needs and then be able to articulate clearly how your firm’s unique offerings can help. Beyond this, you must be able to bring additional expertise to the table, such as a broader industry perspective, additional contacts that might prove useful to the account, and expertise that doesn’t involve the sale of your firm’s offerings.
5. Your firm must agree that the account is strategic. If the account is responsible for so much revenue that the loss of that revenue would significantly impact your firm’s finances, the account is strategic. Similarly, if your business plans crutch upon future sales to that account, the account is strategic. If the relationship with that account is necessary to maintain your firm’s credibility in the marketplace (e.g., a software reseller’s relationship with Microsoft), the account is strategic. In short, if losing the account would significantly hurt your firm’s business, the account is strategic.
6. You must have a strategic account plan. This explains why and how the account is strategic, sets specific revenue goals, and defines reasonable timelines for achieving them. In addition, the plan should set limits on the amount of resources (financial and human) that your firm is willing to expend in order to develop and maintain the account. This is important because it prevents strategic account spending from spiraling out of control. Needless to say, you must be willing to inform the rest of your firm about the measurable success (or failure) of the strategic account effort.

The above is based on a conversation with Sam Reese, the CEO of Miller Heiman, a global sales training organization.