ACCOUNT MANAGEMENT

Most business comes from existing clients. The process by which a consultancy engages with existing or past clients - whether or not you are currently conducting any work for them - is how I define 'account management', the second element of Figure 3.1 in Chapter 3. The task of account management may be undertaken by consultants alongside other tasks; in some practices, it may be their principal task. In what follows I shall refer to all as 'account managers'.

Account management is an activity that is ongoing irrespective of whether or not the consultancy practice is engaged in a project with a client. The task of the account manager is to maintain the relationship and to see that both client and consultancy extract value from it. For example, the account manager should know of the client's relevant priorities and be in a position to offer relevant consultancy help, should it be required. Referring back to Figure 4.4 in Chapter 4 (Prospection: The EDIT process) you will see that expressions of interest arise from both client initiated and consultant developed opportunities. It is the job of the account manager to facilitate both of these. The allocation of clients to account managers will probably be based on market segmentation.

Market Segmentation and Account Management

The need for consultancy services and the manner in which they are sold varies according to segment and therefore it makes sense to allocate clients of similar kinds to the same account manager. The types of segmentation that consultancies use include:

• geographic;

• market sector;

• consultancy service or product.

This segmentation often provides the basis on which the consultancy practice is organized. Thus, a large consultancy may have a London office (geographic segmentation) in which there are specialists marketing IT consultancy services (consultancy service segmentation) to national government bodies (market sector). On the other hand, a sole practitioner may market his or her services in a specialist area of consultancy across the United Kingdom, irrespective of sector.

The Task of the Account Manager

An essential process in managing a consultancy firm is illustrated in Figure 9.2.

Figure 9.2: The role of the account manager

The technological capabilities of a consultancy practice do not readily map on to the business needs of organizations. There needs to be a translation process between the two so that the know-how of consultancy firms can be deployed to best effect within the client organization and the consultancy firm gathers intelligence on the emerging needs of its client marketplace.

Located in the diagram are technical specialists and account managers. Technical specialists will have a deep understanding of their specialization and its application, often within a market sector or set of circumstances. In this capacity they will not have a similar depth of knowledge of specific client organizations as account managers. For account managers, the reverse will be true. They will be very close to their client organizations, and have a major responsibility for mediating the connection between business needs and consulting technology.

Performance of the Account Manager Task

The account manager has a major role in promoting the competitiveness of a consultancy firm. Referring back to Figure 9.1, it is worth reflecting where, in a given product-market sector, competitive advantage lies in consultancy. The fact is that the quality of individual consultants is broadly similar (and there is a certain amount of movement between firms). The offerings are also similar, addressing as they do, common predicaments in organizations that are broadly similar. The methodologies, however, to reach the desired outcomes may vary from firm to firm. Moreover, the nature of the relationship, how it is conducted and managed, between individuals in the consultancy firm and those in the client, will also vary.

Treacy and Wiersema suggest that competitive advantage lies in changing what customers value and how it is delivered, then boosting the level of value that customers expect (1993). They go on to suggest that companies that have taken leadership positions offer superior customer value in one of three value disciplines, whilst meeting or exceeding standards in the other two. The value disciplines they identify are operational excellence, customer intimacy and product leadership. Of these, the latter two are relevant to the job of the account manager.

Customer intimacy is about fitting the offering to the needs of the customer. This is familiar territory to the consultant; every proposal is - at least in theory - the design of a product tailored to the needs of the client. But the perception of the 'needs of the client' is all-important; to what extent is it current? So a key task of the account manager is to be acutely aware of - perhaps even anticipate - the particular needs of an organization and the executives in it for outside support. As one account manager said to me, 'If the first I hear of something significant at one of my clients is in the press, then I'm not doing my job!'

Product leadership concerns continuous production of state-of-the-art products and services. This is of interest to consultancy firms not only in so far as their own activities are concerned, but also with respect to the needs of their clients. The link between consultancy and client is a two-way street in this respect: the consultancy can contribute to the client's thinking, but so too can the client contribute to the consultancy's.

So, the account manager has an important strategic role as the conduit between consultancy and client. But there is a further important aspect.

Depth of the Relationship

We noted above the importance of the relationship in determining competitive position. It also affects the nature of the work that is undertaken. Broadly, the work that consultants do for clients can be divided into two kinds: 1) determining the development agenda; 2) implementing the development agenda. The latter follows from the former. Implementation might be, say, of a particular software application for a business's management information system. The need for this, and indeed for the management information system, will be an aspect of the client's development agenda.

Involvement in formulating the development agenda brings you closer to the heart of the business. Consultants involved in this must of necessity have a close relationship with individual client executives, and have their trust. The corollary is that only those consultants who have this sort of relationship will be allowed by the client to engage in agenda-setting type work. By contrast, implementation is better defined, and is the continuation of the initiatives on the client agenda. If the task is well defined, it becomes more commoditized, and differentiation is less easy.

So, the upshot of this logic is that effective account management is a key differentiator. Which is not so earth shattering - we all prefer to do business with people we like and trust.

Maintaining the Client Relationship in between Projects

Although there may be other reasons for networking with a client, the fundamental value derives from the flow of business yielded from investing in the relationship. Already mentioned has been the metaphor of the relationship as a bridge, while sales are the traffic flowing over it: there is no traffic if there is no bridge; but a bridge is of little value if it carries no traffic.

The value of maintaining the relationship is illustrated in Figure 9.3. The figure shows different circumstances in which consultancy and client react to the perception of need.

Figure 9.3: The value of maintaining the client relationship

A sales discussion will ensue only if both sides perceive the need, while if neither see a need, nothing will happen. Account management is particularly pertinent to the other circumstances (depicted in the boxes top right and bottom left) where only one of the parties sees the need.

The cheapest form of selling is when the client asks you for help - they contact you because they see a need for your services (box on bottom right). This they will do only if they are aware of what you do and the key task of the account manager, therefore, in this respect is maintaining awareness. The techniques of doing this include promotional activities applicable to finding new clients (see Chapter 4) but in addition, the account manager can maintain contact through visits and meetings with client staff. This also helps to fulfil the requirements of the box top left - both in identifying needs and providing the opportunity to find out whether they are apparent and important to the client.

The state of readiness of a client for a particular project or intervention changes with time. Keeping in contact allows you to check whether a client is now ready for that in which they were not interested a year ago.