Get With the (Strategic Accounts) Program
Joe Connelly (VP Sales)
Often when I coach a VP of Sales I get asked lots of questions about strategic accounts:
- What percentage of our overall business should come from strategic accounts?
- Should we choose a certain number for the whole company or some for each salesperson?
- Should we have strategic accounts for every product line?
- What criteria should we use to pick them?
- How often should we review and change our strategic accounts?
- Are all strategic accounts of equal importance?
There are many ways to answer these questions depending on the situation. However here are some of my guidelines when it comes to strategic accounts:
- Potential strategic accounts should be identified through a Marketing-generated segmentation analysis that singles out the key players by market. This data should be filtered through your company’s competitive strengths and weaknesses, then accounts picked with the best chance of long-term success
- Strategic accounts don’t normally generate revenues immediately – typically it takes 6-18 months depending on your products or services and their sales cycle. So be patient
- Over time, expect 80% of your business to come from a select group of accounts – this helps stabilize your business in the long term. But if a single customer is contributing more than 25% of overall company revenues then you’re in a risky situation
- Success at strategic accounts can reduce your overall cost of selling since it is often more efficient on a revenue/head basis
- Senior management should meet once per quarter to review strategic account plans, progress, roadblocks and funding. These meetings should help drive differentiation of overall service compared to non-strategic accounts
- The number of manageable strategic accounts is based on the resources available to properly service them. Picking lots of accounts and not treating them with “special service” defeats the purpose
- Don’t change strategic accounts very often – I suggest an annual review with the majority staying on the list
- Since strategic accounts follow directly from a company’s overall strategy, they must be linked closely with annual revenue targets and forecasted growth rates
To be effective with strategic accounts requires investment. You need a well thought-out and executed strategic account program to ensure they become a key factor in how large and how quickly your company grows. But it is worth it. Remember the old saying “To be a winner, play with the winners!”