Why Strategic Accounts Matter and How to Handle Them

Not all clients are created equal. Strategic Accounts, while small in percentage of clients, provide immense contributions to a company’s revenue and growth. A report by Gartner Group says 80% of a company’s future revenue comes from only 20% of its existing customers.?

Strategic account management is more than a business tactic; it is a necessity in today’s market. Companies that excel in this area drive lasting relationships and mutual growth with high-value clients.?

Our Customer Success Snack events aim to build relationships and elevate Customer Success awareness towards CS leaders all over Europe. These events have allowed us to engage with over 450 professionals from companies like Asana, Cloudsuite, SilverFin, and Hubspot. Through these exchanges, we’ve learnt the essentials of strategic account management, as shared in this report.??

Here are some notes on what we’ve learnt from the event. Our great moderators, Flavia Severin, Sally Stoewe, Giorgia Pedenzini, and Pippa Parker, helped make this article cohesive and insightful.?

What is a Strategic or Enterprise Account?

Defining a Strategic or Enterprise Account is the first step towards learning how it differs and why having clients like these in the business is beneficial. Customer Success Professionals should be able to differentiate these clients and tailor approaches that fit them. Let’s see the questionnaires and guide we’ve prepared below:

?What percentage of our total revenue does this account contribute?

?Are there opportunities for upselling or cross-selling?

?How critical is this account to our overall business strategy and objectives?

?Does this account serve as a reference or case study that can attract other high-value clients?

?What is the level of influence this client has within their industry or market?

After covering these questions, now you may wonder how to identify this account. Throughout these breakout sessions, we’ve collected different insights that can help your assessment.?

?? Revenue and Growth Potential. A strategic/enterprise account contributes largely to the revenue and growth potential of the business. If this account contributes 15% or more of the total annual revenue and has an opportunity for cross-selling and upselling, it is considered a Strategic/Enterprise account.?

?? Business Impact and Strategic Importance. Some accounts significantly impact the industry, and procuring them as clients can be vital for the business’ growth and image. The level of influence an account has in the industry or market is another factor to consider in identifying a strategic account.

Communicating with Enterprise Customers

During our sessions, we collected various insights that involved internal and external communication. Building a solid rapport with enterprise customers can be challenging for start-ups. Here are strategies that can be implemented:

1. Assign a dedicated Point of Contact for each client. Strategic accounts will need a point person or someone who can play the role of a trusted advisor. Whether this be a CSM or a trusted advisor, they should be able to understand the customer’s business, providing recommendations and support.?
2. Enhance client satisfaction and retention through being proactive and collaborative. Stay ahead of Client Needs. Enterprise accounts require proactivity, to ensure that all challenges are keenly managed and that objectives are met. CSMs who manage enterprise accounts need to be more focused on these clients and observe the roadmap of the client journey.?
3. Develop Tailor-Made Solutions and Workarounds. Enterprise or Strategic Accounts have specific client needs, and ensuring that you can explore and propose creative workarounds will give the client more reason to trust you.?
4. Create Feedback Channels. While it is a must that you have direct communication and an open line with enterprise customers, feedback channels can establish direct channels from end-users. This way you can bridge the gap between users and decision-makers.
5. Justify Value to Customers. emphasise the value and ROI of your solutions by showcasing how it has contributed to cost-savings and operational efficiency. Even enterprise accounts will consider Cost-cutting procedures, and you don’t want to be cut off simply without reminding your biggest clients how much value you added to their business.?

Communicating (internally) about Enterprise Customers

1. Encourage C-Suite Engagement. Schedule regular meetings between C-Level executives and high-value clients to address goals, and concerns and align on long-term visions.?
2. Perform Quarterly Review Framework. Opt for a traffic light approach to categorise accounts as Dead, Business as Usual, or To Be Nurtured segregating targeted strategies based on account health. Host regular internal briefings, and provide detailed updates discussing customer insights, needs, and progress.?
3. Practise Fair incentivisation. A reward programme drives team members towards client retention and renewal goals, encouraging sustained performance. Enterprise accounts are much more difficult to close, and manage, so a larger share of incentives is expected for better encouragement.
4. Organise schedules efficiently. Encourage effective time management practises and ensure that day-to-day activities are met across different client portfolios.?
5. Track performance metrics. Implement robust tracking and reporting mechanisms to monitor the performance of customer success activities and their impact on enterprise accounts.?

Key Insights about Enterprise/Strategic Customers

Amsterdam: “Recognise CSM Versatility”

CSMs generally face multifaceted roles, from onboarding to renewals. Of all, they are the people in the company who wear multiple hats. This only proves how versatile CSMs can be. CSMs are essential in delivering outstanding customer experiences, especially for strategic customers. It’s best to have the best CSMs on each account to ensure that all aspects of the customer journey are managed effectively.?

When a company in the SaaS industry faces challenges, balancing the demands of onboarding new customers while ensuring existing customers receive ongoing support and engagement can be difficult. CSMs can be versatile in placing fixes and implementing solutions, so it’s important to hear them and give them a stage to play their roles.??

Copenhagen: “The larger the customer account, the bigger the buying team on the customer side, and the bigger the internal account team is.”?

While it is apparent that strategic or enterprise accounts are bigger clients, the dynamic of requiring the internal account team to be comparable is crucial. Providers should be able to meet the increasing buying team on the customer side, and to do so, it requires a bigger team who will manage.?

Expanding the internal account team is a response to the growing complexity of the customer account. Let’s take Microsoft as an example. Microsoft has many enterprise clients, and with his, they position different teams that consist of an Enterprise Account Manager, a CSM, a Technical Account Manager, and several Sales Engineers. As they work collaboratively, they are able to ensure that all aspects of their enterprise accounts are managed efficiently, with all needs met.

Berlin: “Lead with a Value Narrative”

With strategic accounts, it is imperative to move beyond transactional relationships and focus on delivering real value to clients. Value Narratives are strategic ways to illustrate your product or service while compelling clients how your product or service is driving them to success.?

Rather than just featuring what a project management tool can do, a value narrative can emphasise how this tool has streamlined workflows, and increased team productivity while driving project delivery on time and within budget.?

One successful example of a company that was able to manage effectively using the value narrative is the popular team collaboration platform called “Slack”. They needed to demonstrate the value of their platform to high-stakes accounts and move beyond the initial sale to build long-term partnerships. With this, they used the value narrative strategy and focused on how Slack’s platform could improve team communication, enhance productivity, and streamline project management.

Leading with a value narrative helped Slack strengthen its relationship with enterprise clients, increasing product adoption, higher renewal rate, and more opportunities to upsell.?

Paris: “Very few had invested in CS-specific tools.”

In a recent discussion in Paris, a noteworthy observation was made: “Very few had invested in CS-specific tools.” This insight sheds light on a common challenge faced by organisations in the industry of Customer Success (CS), where many businesses have yet to fully embrace the value of dedicated tools and technologies for managing customer relationships and driving success.?

The implications of this observation and the importance of investing in CS-specific tools are ones that Customer Success Professionals should pay attention to. CS-specific tools contribute a lot in optimisation, and improving efficiency and effectiveness.?

Companies can invest in a lot of AI tools for automation, but without investing in the right ones, we can’t expect efficiency to progress.?

Challenges CSM’s face with Enterprise/Strategic Customers

?? Handling of Internal Initiatives and Advocacy programmes. Enterprise customers are more difficult to persuade in enrolling on advocacy programmes. This is especially more challenging if the customers are risk-averse or unwilling to participate.

?? Business Metric Pressures. With the Leading vs. Lagging Outcomes, CSMs often face the challenge of demonstrating tangible results from both leading and lagging metrics, which can often be difficult to quantify and communicate effectively. Metric Tangibility is another challenge, as painting abstract or long-term outcomes that appear manageable and valuable to stakeholders is a struggle.

?? Cost-cutting strategies in Industries. With many industries adopting cost-cutting measures, it is even more challenging to expand services and upsell even to existing customers. Enterprises have broader options, and the constant innovation has added to the challenge of luring customers to continue with he current services.?

??Prioritizing Revenue Growth and Renewals. Balancing efforts to drive revenue growth with support initiatives for renewal is an ongoing challenge. Retaining customers and seeking growth opportunities are complex acts to juggle.?

?? Sales Interference with Strategic Customers. We have always mentioned how important it is for the sales and CS team to collaborate, hence the struggle to balance this. Sales teams can sometimes interfere too much with managing strategic customers, leading to conflicting messages and strategies.?

Interested in more insights like these? Join our events where over 400 Customer Success professionals from Europe come together to share ideas, discuss trends, and dive deeper into the Customer Success world.