By John DeSarbo, Principal, ZS Associates
Legendary college basketball coach John Wooden once remarked, “I would rather have a lot of talent and a little experience than a lot of experience and a little talent.” This wisdom rings true with solutions providers battling to retain and grow their most important customer relationships. To succeed at the top of the account pyramid, solutions providers need account managers who develop deep, trusting relationships with senior IT and business decision makers. Unfortunately, many VARs and MSPs are realizing they need to look outside their sales organizations to find strategic account managers with the right skill set and drive to succeed.
For decades, most solutions providers had a relatively simple sales organization structure. They aligned mostly field-based sales reps to sales territories, technology categories, or vendors. Large customers received more attention than smaller customers, but, in general, the engagement model and sales process in these accounts were fundamentally the same. As the technology industry evolves and buyers grow more sophisticated, many solutions providers are finding that the old model breaks down in their largest accounts. Buyers demand their account managers have an understanding of their industry sector and technical expertise, and are able to articulate not only what technology products and services are best for their business, but also explain why. Too often, sales reps who play a generalist, relationship manager role are not able to fit the bill.
Customer expectations of how VARs and MSPs should engage with them are shaped by their experiences dealing with other vendors inside and outside the IT industry. A recent study across 30 industries by ZS Associates and the Strategic Account Management Association, the 2013 Report on Strategic Account Management Compensation Practices, found that firms place more importance on their top accounts and invest accordingly. Firms increasingly hire strategic account managers from outside their organization to cover their largest accounts. Firms also decrease the number of customers managed by strategic account managers. This year, 68 percent of strategic account managers manage five or less accounts compared to 50 percent in 2011. The increased investment and focus seems to be paying off. The study found that revenue growth in strategic accounts in 2013 was 25 percent higher than company revenue growth overall. The downside of the trend is an accelerating war for talent and increasing labor costs. It is getting harder and harder to find new blood to fill open strategic account manager positions.
As IT vendors adopt more sophisticated go-to-market strategies, they are finally realizing that VAR and MSP can play an important role in upper mid-market and enterprise accounts. Changes in vendor channel strategy create new growth opportunities for solutions providers in larger accounts. Solutions providers who seek to build their bench of talented strategic account managers should focus on the following best practices:
Winning in your strategic accounts can be challenging but is well worth the effort. Recruiting talented strategic account managers is critical, but only half the battle. We should remember the words of another basketball great Michael Jordan who was fond of saying, “Talent wins games, teamwork and intelligence wins championships.” Real success in strategic accounts is realized through the collective efforts of talented individuals working together effectively as a team to delight their customers.
John DeSarbo is a principal at ZS Associates in San Mateo, CA, and the leader of ZS’s sales channel strategy and management practice. DeSarbo has 20 years of consulting and industry experience focused on sales and marketing strategy and operations, and his expertise spans sales channel strategy and operations, channel analytics, partner program design, and sales force design. He helps companies develop and execute multi-channel go-to-market strategy to scale coverage, improve customer acquisition and retention and accelerate revenue growth in target markets. DeSarbo works with companies across industries with a particular focus on the technology sector.