Strategic Accounts: With all the focus on inside sales, are we overlooking the live elephants in the room?
According to a recent CSO Insights Study, most companies have no formal approach for strategic account planning, leaving it up to salespeople. These companies report their win rate on forecast strategic account deals was 7.7% lower than the average win rate for all forecast deals.
Let’s take a closer look at that. For most companies the top 20% of clients yield 80% of revenue. For emerging companies these accounts play an even bigger role:
- Help drive product strategy and development, stretching investment spend
- Lighthouse accounts to help penetrate key markets
- Serve as key references for other prospects and investors
- Early adopters of new solutions
After years of discussing this with company leaders it’s rare to find ones who don’t appreciate the criticality of strategic clients. Yet when pressed on their own programs, one hears replies that usually included one or more of the following:
- “We just don’t have the bandwidth, we have a major new release/acquisition/X this fall”
- “The CEO needs to be focused on growing the business and the CSO is laser-focused on making this quarter’s plan”
- “Our focus is on diversifying our customer base”
- “We did that 2 or 3 years ago”
All the responses above may sound reasonable. As long as sales are meeting expectations a formal strategic account plan may feel like a luxury. That said, the problem is that the first signs of trouble may result in a big miss for a quarter or much longer.
What would losing a renewal / expansion opportunity from one of your top 10 accounts mean? How about when it happens with several?
Given the risks and proven underperformance of operating without strategic account planning, why wouldn’t this be an immediate priority? The returns from effective planning can be seen rapidly, through increased win rates on larger opportunities. At the same time, the linkage between strategic accounts and broader finance, marketing and product development plans will enable better planning and attainment of corporate objectives.
Andy Shober is a sales and commercial leader with a 25-year track record of achieving extraordinary results for software and technology services providers. He is a Partner in TechCXO’s Denver office. Andy can be reached at andy.shober@techcxo.com. See his full bio here.