I want to change the way you think about account managers. Are you open to the idea of the $3 million account manager? This will be the first of several columns on this topic. I will share real data and employ facts and math to make the case. I will offer practical procedural, management and compensation strategies to demonstrate how to achieve this goal.

Median Account Managers vs. Top Performers

First, let’s define things. The account manager’s (AM) primary accountability is the optimization of your customer’s service experience. An AM’s effectiveness is measured using a key performance indicator (KPI) called total dollars under management (TDUM). This TDUM KPI is driven by contracts, upsells and retention/renewal rate. The goal for any AM is more TDUM.

Second, let’s compare the median performers to the top performers in TDUM to establish a baseline for achieving $3 million TDUM. (This data comes from Aspire Software’s client base.)

It’s clear that the top group manages way more revenue than the median group both in TDUM and year over year (YOY) TDUM. The average size of contracts managed and upsells made is about equal. For a small compensation difference between the groups, the bottom-line contribution for the cost is significant. These facts will become important when we develop practical procedural, management and compensation strategies.

The $3 Million Account Manager

Third, given the baseline data above, what would these numbers look like for a $3 million AM? The difference between the $3 million AM and today’s top performers is less than you think. An across-the-board 14 percent improvement in the three sub KPIs (contracts, upsells and retention/renewal rate) is all that’s required. This can be achieved by managing three elements of the AM’s world:

• Understanding site size distribution and spending more time where the money is.
• Knowing high-value activities and focusing more time on those versus noncore activities.
• Documenting (and storing) information about sites and activities so it is available to execute service delivery.

Finally, why does this matter and for whom? It matters for the owner. It matters for the AM who can potentially make “real money” and be happy and commit to the company for a long time because he or she can have a career and raise a family on a good income. The chart below provides the numbers.

Next time, we’ll dive deeper into the details and begin to explore how to make this happen.

Why the $3M AM Matters