3 Biggest Mistakes Made in Account Management

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Whether you are a CEO, an Entrepreneur, a Head of Account Management, you will be surprised when you read these 3 biggest mistakes made in Account Management and the unseen yet disastrous impact it is having on your company. Most people do not realise these mistakes because they are so commonly practiced in many organisations and we think it is the norm and the right way of doing things. However, they are not.

If you can rectify these mistakes, you will be surprised how much your sales can grow exponentially and how you can achieve long term sustainability for your company. Before we go into the mistakes and solutions, first let’s look at what is the purpose of Account Management and what is the purpose it serves.


What is Account Management and why is it important?

Account Management is about building strong relationships with customers so that you can achieve customer retention and reap more sales from your existing customers. The latter is also commonly known as “growing an account”. The role of the Account Manager is to build fruitful, collaborative relationship with his clients. The most fundamental responsibility of an Account Manager is  to ensure that the client’s requirements are clearly communicated to the supporting departments delivering the products and services and to tactfully manage the expections of the client so that order fulfillment is carried out smoothly. This will build trust in the customer, ensure customer retention and encourage repeat purchases. In addition, the Account Manager has to know his clients’ business challenges well and identify areas which his company’s products and services can be solutions to help his clients. In so doing, he will be able to grow the account.

If a small percentage of your total number of customers is contributing to a the bulk of your revenue, losing any one of these important customers can cause your revenue to drop substantially and hence impact your company’s survivability. Under such situation, it is common sense that you should have account managers serving such important customers (also known as key accounts). Customers who have had pleasant experience with your services will likely come back to purchase other products from you than to consider buying similar products from your competitors whom they are not familar with. Having Account Managers to build confidence in the customers will help your company compete effectively and achieve long term sustainability.

Now that we understand  the role of the Account Management and its importance, let’s look at 5 mistakes commonly made in Account Management and how that can ruin your business.

Mistake #1 – Assuming that all your business accounts have to be managed by Account Managers

This is the most common mistake that many companies made. In fact, when I first became an Account Manager in 1993 in a large organisation, that was how our Account Management department was set up. We picked all the important industry sectors, e.g. Manufacturing, Government, Banks, etc. and we assign one Account Manager to handle each sector. This seems a logical set up. Each time an enquiry from a manufacturing company, regardless of how much they are contributing to our revenue, we will channel that enquiry to the Account Manager managing manufacturing sector. It is simple and systematic.

Impact to Your Company

However, this way of organising will cause your Account Managers to be so busy handling all kinds of enquiries and not being able to focus on managing the key accounts that matters most to your company’s survivability. In fact, you may end up not managing your key accounts at all because the assigned Account Manager may be too busy to even pay them a visit.

A real case

Although this is year 2020, I have discovered that many companies are still organising their Account Management in the same manner. Let me cite a recent encounter I had.

I was applying to a very established Learning Centre for a course for some of my company staff. When the company received my application, they informed me that they will be assigning an Account Manager since we are a business customer. I was very impressed.  As we can get government subsidies (training grants) when we send our staff for such courses, I asked the Account Manager how I can apply for the grant. Instead of providing me the answer, she was causing a lot of confusion by giving many wrong answers. When I tried to ask clarify, she said she was in a meeting and asked me to call to their customer service centre.

If you look at the case above, it is very clear that the  Account Manager is not able to perform her role in helping a client and projecting a good brand image of her company. One reason for such poor service is the ambitious rule that the company has set — to manage all business accounts with Account Managers. As salaries of Account Managers are not low, there is a limit to the number of Account Managers we can employ. It is therefore very important that we optimize the number of Account Managers we have. If we assign an Account Manager to handle a large quantity of clients, e.g. all companies from an industry sector, then that Account Manager can only perform a “passive, reactive” role of answering enquiries. Like in the above case, the Account Manager could not even perform that passive role well.

What is the solution?

What then is the right way to organise an Account Management team? We need to go back to the purpose of Account Management, i.e. fundamentally to achieve customer retention of key accounts. While we may segment our markets, e.g. Manufacturing, Government, Banks, etc., within each of these industry segment, we should select those key accounts that we think we need to retain and grow. The Account Manager’s role is to manage these selected, key, strategic accounts. Then set the right performance targets to measure the performance of the Account Manager.

So what about the remaining customers within each industry sector? If we do not serve them, are we not losing out a lot of opportunities? We can still serve the customers but in more effective ways:

  1. First, leverage on technologies such as Zendesk to build a Knowledge database so that customers can search and find answers quickly. In fact, this would likely be the preferred method for many customers than to wait for the Account Manage to finish their meetings and reply.
  2. Second, set up a customer service function to serve the customers who are not key accounts. Having good customer service officers handling enquiries via phone or chatbox can effectively help clients who could not locate the answers from the Knowledge database. This is a much more cost effective solution than assigning Account Managers. With the right Customer Relationship Management software, you can get insights into your customers’ needs, scale your staff strength accordingly and identify potential customers whom you can grow.

Mistake #2 – Not differentiating the roles of Account Managers vs Sales Manager and setting the wrong rewards for Account Managers

Many years ago, I had an opportunity to work in a startup company that had strong investors. Despite having the investments and having a business plan worked out by some of the industry’s well known consultants,  we had a very small sales team, just one Vice President and one Account Manager.  Half the company’s staff were engineers. We had good data centres, service engineers and product managers but few people selling. It was also strange that they should call the sales person an Account Manager when we had yet to have any key customers. We did not succeed at that time until we start to expand our sales team.

In many companies, the Account Manager is also the Sales Manager to sell whatever products the company has. Many bosses think that Sales and Account Management is the same. They thought that by rewarding Account Managers with commission is the way to drive sales growth. This is a myth.

We need to recognise that Account Servicing involves a lot of putting out “fires” for clients. There are a lot of activities that does not generate revenue immediately but are urgent and necessary. For example, a client may call to complain about some project issues, or the cheque is bounced and the Account Manager is required to tactfully handle the client and many other stuff. If an Account Manager focus on attending to all these Account Servicing issues, they will have little time to push new products to the clients. If the Account Manager is driven by sales commission, he will not be motivated to help the client solve issues that does not lead to any closing of sales.

Impact to Your Company

If you are paying commission to your Account Managers for new sales, they will avoid helping clients in non-revenue activities and the end result may mean that you will miss a lot of opportunities you can help your customers, gain credit and build strong relationship with your customers. The customer may not even like your Account Managers who are always trying to sell stuff and not there when needed. This can be a weak point where competitors can penetrate and win this Key Account away. Your potential revenue loss will be great.

If despite the commission, your Account Manager is still focusing on Account Servicing, and if you do not have any Sales executives to push for new sales, then your sales growth will not reach its potential and the commission that you are paying to your Account Manager is not a direct reward.

What is the solution?

Assign a  Sales executive to work with customers who are currently not your key accounts but has the potential to grow for specific products or services. The Sales executive is an expect in the products he is selling and he will do hard selling and measured base on commission. Whereas, for Account Managers, they should be a generalist for all the products and services in your company. Their fundamental responsibility is servicing the customers and should be rewarded base on bonuses because of customer retention.

Let’s look at the earlier example on the Learning Centre industry. Their target customers would be those organisations who place a lot of importance on staff training and upgrading. In fact, there are organisations that emphasized so much of that, that they have dedicated Human Resource constantly working out training programs for their staff. Learning centres should have Sales Manager searching for such organisations and hard selling to them.

When a customer account has grown to a certain size, management can decide that they should be managed by an Account Manager so that the Sales executive can move on to scout for new customers.

Mistake #3 – Not realising that successful Account Management requires team effort

If we want to optimise our Account Management function, our Account Managers should have the qualities to build fruitful and collaborative relationships with people of all levels within your customers’ organisation. Why? Because in an organisation, there are people who hold the power but there are those who are influencers. Your usual contact person in the customer organisation may not reveal to you their challenges. However, if you know, say, people from the user department, you might be able to get insider information to what challenges they are facing and hence what projects they are likely to work on to solve their problems. Hence, an Account Manager needs to be able to engage at all levels. He has to have the confidence to network at the CXO level and also the humble attitude to network at the working levels. However, few people has this ability to network at every level. Sometimes, people may not want to network with him even if he has the ability. Sometimes, there is a chemistry issue. There will always be people we cannot communicate with because of the lack of common topics.

Impact to Your Company

If you rely solely on the Account Manager to achieve an ultimate goal of customer retention and growing the account, you might end up not meeting that objective. It will mean many missed business opportunities.

What is the solution?

What is necessary is setting a strategy for each of your Key Account, Every customer organisation is different. It is therefore important that you identify the following:

  1. Who in the organisation plays what role and who you should target
  2. How to reach each of the targets
  3. What actions to take
  4. What are the resources needed

Next leverage on the resources in your organisation to complement your Account Manager so that together, your company will succeed in reaching out your goals. For example, if the key influencer is say, the Data Centre engineer, and if your Account Manager is not someone who has the technical knowledge or chemistry to network with the Data Centre engineer, then one way is to leverage on the engineers in your own company to work with your customers’ engineers. In other words, successful Account Management is a team effort.


These are mistakes commonly made because we simply did not realise the impact to the organisation. However if we can rectify these issues, the sales growth will be exponential.


Featured Photo by Annie Spratt on Unsplash