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The Marketplace Master^TM is a monthly email publication on professional service marketing from Expertise Marketing, LLC.

Are you making the most of account management?

This month’s article is based on the research we did on account management with several hundred professional service firms (PSFs). We learned that PSFs’ rather narrow view of account management ultimately limits their potential competitive potency and achievement of growth goals. We found evidence that the more strategically PSFs approach the identification and cultivation of optimal clients, the more likely they are to enjoy marketplace leadership.

We’ll follow this article next month with a second part on some of the account management initiatives that keen firms are using to drive revenues, profitability and competitive advantage.

Suzanne Lowe
Author, Marketplace Masters: How Professional Service Firms Compete to Win
President, Expertise Marketing, LLC

Investing in Account Management

Most professional service firms understand the value of getting closer to their clients. But how many understand that the way they think about – and eventually use – account management can determine just how close they’re able to get?

If you talk to enough PSF leaders, you get the feeling that account management simply means selling more services to existing clients. And this isn’t necessarily a bad idea! But account management means building vital relationships with strategically targeted clients and prospects. I believe there are important nuances between the terms account management and relationship management.

For most PSFs these days, client relationship management is so ubiquitous that it’s gotten its own acronym - CRM. But too many PSFs, in their very appropriate devotion to CRM, focus so much on one-on-one relationships with specific clients that they lose sight of the strategic overarching focus that account management can provide. An effective account management program makes the right clients a part of a mutually beneficial relationship that continuously brings them optimal results.

Since the recent millennium, relationship management and account-planning programs have been gaining in popularity at the PSFs we studied. Our research found that 43% of responding professional service firms reported they were creating strategic account management plans and/or assigning account managers.

An IT consulting firm told us “We assign both traditional (i.e., sales) account managers and technical (i.e., consulting) team leaders to all clients regardless of size to ensure that we are acting in collaboration at all times.” This phenomenon is happening in other professional sectors too. For example, in the architecture and engineering sector, it’s not unusual for professional teams to include separate leaders who attend to design, project management, relationship and functional issues for each client account.

Many PSFs, however, approach account management too tactically. Yes, there are tasks to be done and techniques that can be used to grow the client relationship. But these firms need to step back and think about the notions of profitability, strategic “fit” and competitive leadership in their approach to account management.

A Scatter Shot View of Account Management

How firms approach account management can depend on what they think it is. We found that firms define account management in different and perhaps overly narrow ways. Some equate it with cross-selling. This could mean targeting certain clients to whom new services could be introduced or researching them to scout out additional work opportunities outside the current practice.

On the other hand, account service is the focus for some firms, not account development. Account managers in these firms manage work flow, handle relationship problems, and oversee billing and fees.

Other firms defined relationship management in terms of client responsiveness. They made themselves available to clients 24 hours/7 days a week using a variety of technologies such as hand-held devices, digital cameras, instant messaging, and video conferencing.

Still others think of it as appreciation-oriented activities like inviting clients to group luncheons or seminars, or co-sponsoring events with them. They might also rely on promotion-oriented activities like publishing monthly newsletters and sending the firm’s own research reports.

Last but not least, some firms think of account management from a content or knowledge development point of view. This involves inviting clients to issue-oriented meetings, non-billed “think-tank” sessions with clients or engaging clients through an advisory board.

From this review of the account management approaches revealed in our research, it’s clear that the professional services sector approaches account management in a rather fragmented way. They want to increase their share of a client’s wallet, but their initiatives are less about building a long-term competitive advantage with strategically optimal clients than they are about short-term revenue building.

A Broader, Deeper View of Account Management

Just a handful of the firms we talked to realize that profitability and overall competitive advantage play a role in account management. They told us things like “Partners and senior staff should have profit accountability for client relationships. Unprofitable relationships need to be addressed with partners and then with clients.” Or, “More billing and collection responsibilities are being pushed to [the] local studio level; additionally, staff are being empowered in respect to their impact on profitability.”

While what all these firms are doing is not wrong, it doesn’t mean it’s enough. By taking account management to the next step, savvy professionals will make it an integral part of the way they market, manage – and grow – their firms.

Next month we’ll discuss some forward-thinking ideas about PSF account management and how it has impacted the marketplace leadership of firms that employ these ideas.

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