Account Planning Part II — Strategic Account Plans

Most companies have a sales plan, and it defines sales expectations down to the individual rep level. However, when it comes to planning for sales growth, most sales plans fall short because they don’t go one step further and assign the growth goals (revenue, product sales, profit, etc.) to the specific accounts who can help them accomplish the growth. Think about your current plan. The total sales goals for the period and for the rep are clearly spelled out (they better be!), but can you also see where the sales have been assigned to your accounts? If not, then it’s time to start account planning.

In this second part of our two-part “Account Planning” series, we’ve shifted the focus from account reviews to strategic account plans (SAPs). In the second part of this article we will show you how to narrow the scope of your sales planning to the accounts that generate the majority of your business, and we will teach you how to focus your efforts on strengthening your position within your most important accounts.

Defining a Strategic Account

If a sales executive has 30 accounts, she’s tempted to treat them all the same. But they really aren’t the same at all. Odds are, 20 percent of your business comes from just one of them. Customers are notoriously unequal.

The Pareto Principle states that, for many events, roughly 80% of the effects come from 20% of the causes. This concept holds true for many companies’ account base. Strategic accounts are the 20 percent of accounts that account for 80 percent of a given company’s revenue. As a sales manager or sales leader (VP, CSO, etc.), you are the gatekeeper of the profits, and your time should largely be spent nurturing and growing relationships with the 20 percent of customers who are integral to the success of your company. Sometimes it’s 60/40 or 70/ 30; sometimes it’s 90/10 or 95/5. The exact numbers aren’t so important. What is important is to know which accounts generate the most results for you. Once you know which accounts are most important to your business, then it’s time to start managing them differently. I’ve learned the best way to get the most from these select few accounts is to execute a strategic account plan (SAP).

SAPs go deep on a single major account. The plan takes a long-term view, typically 12 months, while providing management with a history of the relationship. SAPs provide a framework for the decision making process at the given account (the who and how of decision making), detail transaction history (sales by period and product) and serve as a tool for forecasting future sales performance. SAPs are a lot of work, so make sure to get agreement from all participants before asking a salesperson to create a plan. Given the effort required, this process should only be focused on those few customers who drive the business and are considered strategic, typically no more than 5 per sales person.

Strategic Account Plan Objectives

Set “Stretch” Goals

Take the opportunity to stretch your thinking by setting goals that are considerably larger than current expectations. A stretch target drives the team to get creative when proposing opportunities and offerings that would achieve the sales target specific to this account. Total sales volume is important. It’s easy to know which accounts spend the most money with your company, and there is no shortage of importance placed upon monetary value. However, the process of identifying a strategic account should scrutinize other areas of business besides dollars and cents. What you should do is consider what questions best reveal which accounts have the key qualities to be considered strategic accounts. Factor in current value, but also look at what value might be added by an account over time. SAPs aren’t just designed for current accounts. Writing a SAP for an important prospect might be the difference in winning or losing the business.

“Take the opportunity to stretch your thinking by setting goals that are considerably larger than current expectations. A stretch target drives the team to get creative when proposing opportunities and offerings that would achieve the sales target specific to this account.”

Drive Executive Relationships

Executive relationships are defined as leader-to-leader interaction. Find time for your CEO, COO and other important leaders to connect with your account’s top leaders. These relationships are one of the important objectives this process must drive. You never really appreciate the importance of good executive relationships until they are needed, and by then it is too late to develop them. Make a point to have your executives schedule time to meet with the leaders of your strategic accounts. This exercise demonstrates how much you care about your customer’s business.

Strategic account planning requires you to look at how a client could benefit your business in ways other than just sales. For example, see if there are relationships that the client has with other vendors that might be beneficial to your company. If you have a great relationship with your client, they will be happy to make introductions on your behalf. Surrounding yourself with vendors your accounts use will only serve to bolster your reputation in their minds.

Source for New Product Development

Well-chosen “stretch” targets will uncover opportunities for new offerings. These new initiatives, as approved by the executive team, will help you secure your position within the account. This process should stress your team’s ability to think, write and work cross-functionally like other competitors can’t or won’t. Building SAPs is a great way to build the sales team’s business skills. The ability to plan is a key management skill. The insight developed while evaluating your team’s participation in strategic planning will be helpful when evaluating staff for promotion. The company’s sense of team will also be enhanced as a result of the cross-functional work required to execute each SAP.

“The long-game for you is to master communication between different factions within your company and your strategic accounts.”

Often, sales teams will try to execute a SAP initiative by coming up with creative ways to impress and create enthusiasm among the most valued clients. This may take shape in the form of promising expedited delivery for a custom order or a discount for an order of exceptional volume. Too many times, the sales team will not effectively communicate the intentions of their initiative, and the whole company will suffer as a result, not to mention valued clients. People working in manufacturing or delivery often do not have the ability to be creative, as they follow more rigid guidelines and timeframes. In order to work as intended, a strategic account planning initiative must be properly communicated and agreed upon by all parties involved in the process of customer service. The long-game for you is to master communication between different factions within your company and your strategic accounts.

Strategic Account Plan Execution

Like Accounts Reviews, it’s the salesperson’s responsibility to prepare and present the SAP to the leadership team. Because SAPs are designed for long-term sales success, they should only be reviewed quarterly. It should take about half an hour to review a single SAP. Managers, batch your SAP reviews. For example, schedule a salesperson to present all SAPs in one session, because it’s less disruptive to the salesperson’s selling efforts.

Executives should plan on communicating with each and every strategic account each quarter. Managers and VPs, it’s your responsibility to coordinate executive communication with your top accounts. Make the introductions, and get the meetings scheduled.

The fastest path to hyper-growth is to exponentially increase the sales within your top accounts. Strategic account planning simplifies the process and ensures you keep your company’s most important asset: happy customers.

For more on strategic account planning, here are a few helpful resources:

The New Successful Large Account Management: Maintaining and Growing Your Most Important Assets — Your Customers

This book is required reading in my coaching program. In fact, I suggest adding it to your onboarding training program.

The Seven Keys to Managing Strategic Accounts

Managers, this is a good book to help you manage and coordinate your team’s efforts within the strategic accounts.