Who Owns Your Wedge?

Whether a company is a pure product play, a professional services shop, or something in between, it is common to rely on a wedge strategy of “land and expand” where a smaller first deal eventually leads to larger deals across multiple sites and departments or even an entire enterprise.

We know Sales owns the “land” portion, identifying potential customers and convincing them to sign the first deal, but ownership of the “expand” portion of the wedge is often poorly defined.

Salespeople, for better and worse, tend to behave like hunters.  Like lions on the savannah, they search for opportunities, put in a lot of effort, and often come up empty handed.  Sales is typically incentivized directly, through commissions, or indirectly through quotas, so like those lions, salespeople are usually hungry.  This often leads to the behavior of focusing on the easiest prey, new accounts with a low price point that often only require the consent of a single approver whose budget is high enough to meet that price point.  Sales has less patience for chasing enterprise customers whose multiple approvals and gatekeepers can cause the purchasing process to stretch out over months or even years through a series of presentations, RFIs, RFPs, and RFQs.

And even if Sales was willing to invest the time and patience needed to land enterprise accounts, that would be time taken away from landing new customers to feed the wedge strategy.  Having a salesperson focus on growing one or two lucrative accounts could cause customer growth to stagnate while the business puts more eggs into fewer baskets.

The answer is to develop an Account Management team whose primary focus is not just on reacting to customer issues, but on proactively growing customer accounts from small deals to large deals to enterprise level agreements.  Account Management should own the “expand” portion of the wedge strategy.  Why?  Because Account Management is well positioned to represent the value of the company’s products and services to the customer. Account Management's job is to manage the relationship after the sale.  The customer expects to have contact with Account Management from time to time, whether it is answering questions, solving problems, or sharing new information.  They generally only hear from Sales when it is time to order. Like a farmer, Account Management patiently and persistently tends to their accounts so that they can harvest additional revenue over time.

The key to success is for Account Management to be proactive rather than reactive.  Don’t sit by the phone, hoping it never rings while reviewing your apology scripts.  Pick up that phone and call your customers.  Find an excuse, preferably a positive one, so that your customers start to associate hearing from you with having a positive experience.  New features are a great excuse.  You’re calling to make sure they are getting the value they already paid for by taking advantage of new features in your latest release.  Positive status updates are also a great excuse.  Call them on Friday afternoon to let them know that the project is on track so that they can relax and enjoy their weekend.  Of course the only way to provide good news is to have good news, so part of the job of Account Management is to coordinate activity to make sure things are staying on track.  That would be much harder for a salesperson who spends a lot of time out on the road.

When should an account transition from Sales to Account Management?  I would argue the transition should begin the moment a contract is signed.  And it should be a transition, meaning the salesperson should introduce the account manager and the account manager should keep the salesperson in the loop on status through the initial phase of the project, but primary responsibility for making sure that things go smoothly should already belong to Account Management since they own maintaining and expanding the long-term relationship.

How does it work at your company?  Are you a startup that is still focused mainly on Sales?  Who owns your wedge?  If you view Account Management as a cost center, a necessary evil, you will be more likely to delay developing that muscle for as long as possible.  If, on the other hand, you look at Account Management as a revenue center, the answer to growing your stagnating accounts, you’ll prioritize establishing Account Management as a key part of your revenue growth strategy.