1. The account manager and the customer pyramid

An account manager is caught between two fires. The customer wants maximum attention and speed, while your own organisation guards margins, capacity and agreements. The profession lies in the space between the two. Anyone who only follows the customer burns up their credit with colleagues. Anyone who only follows their own organisation loses their credibility with the customer.

What exactly is an account?

An account is a customer who has been assigned to you and for whom you carry commercial responsibility. Not every order is an account. An account is about a relationship that you manage over a longer period: you know the organisation, the people and the plans, and you know what there is to be gained in the years ahead.

A key account is a customer with strategic weight. That may be a customer who provides a large share of your turnover, who opens the door to a new market, or who brings so much knowledge and reference value that you do not want to lose them. Key accounts get their own approach, more consultation and often a team around them rather than a single contact person.

Five core tasks in the role

The specifics differ from sector to sector, but you will come across these five tasks everywhere. Maintaining relationships: you make sure the customer knows you, trusts you and calls you when something is going on, even when there is nothing to sell. Spotting and capitalising on opportunities: you hear what the customer is struggling with and connect that to what your organisation can deliver. Gathering and passing on information: what happens at the customer is only known within your own company if you tell it. Monitoring agreements: you keep an eye on whether what was promised is actually delivered, in quality, time and price. And accounting for the result: you steer on turnover, margin and customer retention, and you account for that.

The customer pyramid

You have more customers than hours. The customer pyramid helps you divide up that scarce time: it makes visible which customers carry the most weight and how much attention they warrant.

The distribution differs from one organisation to the next, but the pattern is familiar. In Jay Curry's classic pyramid, the top 20 per cent of your customers account for around 80 per cent of revenue. Within that top group there is a layer of key accounts of roughly 1 per cent of your customers, and that single layer alone accounts for about half of your turnover. Below it are the large customers, around 4 per cent of your customer base, accounting for roughly 20 per cent of your turnover, and the medium-sized customers, around 15 per cent, accounting for roughly 10 per cent. And then there is the broad base: 80 per cent of your customers, consisting of small and inactive customers, prospects and suspects, together accounting for the last fifth of your turnover.

Work it out and the point becomes clear. Of every hundred customers, twenty deliver four fifths of your turnover, and that single top customer within that group accounts for half on his own. That skewed ratio is not a problem, but it is a question of steering. If you give every customer the same amount of time, you automatically give the top layer too little.

Segmenting by value and by potential

A pyramid based on turnover alone looks backwards. You see what a customer bought last year, not what is still in it. That is why you weigh up two things against each other. The current value is the revenue and margin of the past period, minus the costs you incur to serve this customer; high revenue with a thin margin and a lot of service is less attractive than it looks. The potential is the share of the customer's purchasing budget that currently goes to others; a customer who buys 10 per cent of their needs from you offers more scope than a customer who already takes 90 per cent.

Put those two side by side and you get four types of customers. High value and high potential: that is where you invest. High value and low potential: those you defend. Low value and high potential: those you develop. Low value and low potential: those you serve as efficiently as possible.

From transaction to partnership

The profession has shifted over the past few decades. Discounts and quick deals are still part of it, but they are no longer the core. Customers compare prices and specifications online themselves, so the account manager who only comes to deliver product information adds little. Three shifts determine what your working day looks like. From product to issue: the client is not buying a service but a solution to something that is costing them money or time, so your conversation starts with that problem and not with your product range. From a single contact to a network: decisions are shared across several people and departments, so you maintain contact at several levels. From hunting to growing: winning a new client costs many times more than growing an existing one.

Retain, deepen, grow

That last shift calls for a different view of your portfolio. An account is not a completed sale but a relationship with a course, and it contains three movements.

Retaining is making sure the customer stays. You keep to your agreements, you are available, and you solve problems before the customer has to complain about them. This does not generate extra revenue; it prevents existing revenue from walking away. Deepening is to broaden the relationship within the same volume of business. You get to know more people, you get to the table earlier in the process, you hear the plans for next year. The revenue stays the same, your position becomes stronger. Growing is turning that position into more work: an extra site, an additional service, a multi-year contract.

Many account managers skip the middle move. They keep the customer nicely satisfied and then ask for more work. To the customer that feels like a sales attempt without cause. Growth almost always comes after deepening, rarely before it.

Customer focus works in two directions

External customer focus is about the customer who pays: you put yourself in their situation and make their objective central instead of your own offering. Internal customer focus is about your colleagues. Everything you promise the customer is carried out by the planner, the engineer, the service desk or the administration team. If they see your request as an awkward interruption, your promise will struggle to come to life. If they see it as a shared interest, you will get more done than you could expect on paper.

In concrete terms that means: you explain why something is needed, instead of only when. You ask about their situation before you commit to a date. You report back what the customer thought of the result. And you share the credit, internally too.

Summary

• An account is a client with a longer-term relationship and its own commercial owner. A key account also carries strategic weight through revenue, market position or reference value.
• The five core tasks are maintaining relationships, converting opportunities, passing on information, monitoring agreements and accounting for results.
• In the customer pyramid, the top 20 per cent of your customers deliver roughly 80 per cent of your turnover, with the key accounts (1 per cent) alone accounting for about half. The base of 80 per cent of your customers delivers the final fifth.
• Don't only segment by current value, but by potential as well: the share of the purchasing budget that currently goes to someone else.
• The profession is shifting from transaction to partnership: from product to problem, from a single contact to a network, from hunting to growing.
• Retaining prevents loss, deepening strengthens your position, growing brings in revenue. Growth comes after deepening, not before.
• External customer focus determines what you promise, internal customer focus determines whether that promise is kept.