Strategic Account Management in Retention & Growth Phase
Strategic accounts are a well-established method both in new logo sales and customer success to focus your resources. At the beginning of strategic account management, the question stands: who is a strategic account for you?
We explored this question in a previous article for new logo sales in the account acquisition phase. For account managers looking after existing customers, the question has a different taste than to new sales account executives: on the one hand, you may have an existing relationship and network in the company on the other, you may have a two-sided objective: to retain and grow at the same time. And this already brings us to the core topic in identifying your strategic accounts:
Segmentation
Depending on your goals you might give retention and extension a higher rating but on a general business level, your strategic accounts should be the ones that have a high recurring revenue (i.e. churn impact) and expansion potential at the same time.
Retention
Identifying the customers with a higher retention impact is easy: look at the ARR or MRR of your accounts and you will find the top revenue bringers. You might realize a Pareto distribution of the accounts where a small share makes for a significant revenue - these are the ones deemed “strategic”.
Growth Potential
While retention is pretty straightforward, evaluating a companies growth potential requires a bit more in-depth analysis. Basically, there are two ways you can grow an existing account: upselling and cross-selling.
Evaluating the upsell potential
Upsell potential can typically be defined with the customer during quarterly or annual business reviews. Some companies are actually asking their customers for forecasts in exchange for better conditions.
There are other leading indicators like employee growth that can give you an idea about the upsell potential within an account.
However, there are also special effects like mergers & acquisitions that can make upsell opportunities appear more or less overnight.
Evaluating the cross-sell potential
Cross-selling potential may be a bit more challenging to evaluate. Basically, there are two situations to distinguish:
Opportunities to cross-sell to existing users: e.g. they bought the hamburger and you sell them additional fries
Selling another product that serves different user groups into the same account: you might have been able to sell the burgers to the parents of a family but the kids actually only want ice cream.
Evaluating these potentials obviously depends on the structure and your current penetration of the account. A good thing to do is to use buying personas and quantify them. Here is a list of great tools for researching your account.
To help you analyze your Account Base quickly and give you a presentable result, we created a Google Sheets Template, which you can download here!
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