Let's play the account management blame game!
Shifting account managers and challenging clients
Hello. Ben here, lead judge for this latest debate round up.
We had two weekly debates recently in the Emergers Planet Slack- one on the business model of some cheese based software (Cheesr), and one on a less profitable but high revenue client not quite happy with their service.
W'e’re going to take a look at the latter, review the debate, what LinkedIn and the wider web has to say, and give you a verdict.
Depth, nuance and context over easy soundbites.
Here’s the fictional scenario that was posted…
One of your bigger paying clients isn't happy.
They've never been an easy client. They're very hard to read, often nitpick the work, and have a tendency to provide inadequate briefs, or change them last minute.
As a result, they definitely take a lot of time to manage compared to others.
Having said that, they pay well, and they've brought in a couple of referrals for you.
'Through a pure profitability lens, most clients clock in at about 32% profit, whereas this client only clocks in around 14%, because they're so time consuming.
But, most clients pay around £10k a year. These pay around £80k a year, providing about 8% of your total revenue. So 14% profit is still a chunk of cash.
In short - they're not as profitable as others, but they're a big client.
In the last year, Lenny took over as their Account Manager. Lenny has done an excellent job with all previous clients. No complaints, excellent feedback all round. In fact, you'd consider him one of your top performers.
With this one though, there are clearly issues. The client has called you to say they're not convinced they're getting the service they used to, and that Lenny isn't giving them what they want. They liked their old Account Manager, but they've left the business.
Annual contract renewal is up in about 5 months.You've had a chat with Lenny.
"I'm trying to meet their demands, but they're simply asking for too much, so sometimes I have to push back. Other clients wouldn't ask for this treatment. I'm not sure I can accommodate what they want some of the time".
What do you do?
Three options were presented:
A. Take Lenny off the account and place another Account Manager on them.
B. Keep Lenny on the account, and see if he can work it out.
C. Other (please explain)
Let’s review the evidence. First up…
SLACK DEBATE
If you’re not already in the private Slack, you can access this space where you debate perspectives to feel more confident and knowledgeable in your work by signing up to Emergers Planet (for free) here.
Here are some hot takes (names redacted):
It sounds like the client is running amok and taking advantage of lower level employees. I have a client who was similar to this, but all they needed was a firm hand telling them 'no' and putting them in their place, respectfully I might say, and they are now a fantastic client…
… if as the business owner I had capacity to look after them, I think that's what I would do.
(Effectively Option C)
If he is a top performer I’d want to ensure his confidence is impacted as little as possible…
… Have a senior leader take over the account for a couple of months. Get them to do a deep dive into the problem, find out is it us or them.
If the problem is them, the senior leader should re-explain the ways you work as a business. Often these things are down to miscommunication leading to skewed expectations…
… If they don’t want to work to your parameters… you need to be comfortable in letting them go. If you are trying to scale as a biz, these types of clients is not where you want to focus.
I don't think I'd take on the client. I remember a difficult client in a previous role where the MD got quite involved, and they could never get untangled again afterwards. That would also further tank profitability.
I think I'd dip in a little alongside Lenny a bit, but be really careful not to "take over". If Lenny's a top performer, I'd back him to get into the right spot…
… The client sounds a bit challenging not fundamentally incompatible. If the previous AM managed them okay and no big issues came up before, I'd back that we can find a way to work with them.
IIf Lenny is a top performer then I’d trust him - he might just be defending the companies interests and stopping the client becoming less profitable.
'I’d definitely want to hear them out and see if they had any specific concerns that could be easily dealt with.
If they are already a lot less profitable I’d be concerned about stepping in myself or putting someone more senior in… they may get the wrong expectations.
(Option C)
Even with lower margin they are worth almost 4 clients to the bottom line, and it seems that lenny hasn't been given a clear brief…
… if he's unhappy and the client's unhappy then it's not working for anyone.
Adding some seniority to the account (but not necessarily removing lenny) will help to clarify exactly what we're trying to achieve for the business with this client.
That’s just a snippet. To wrap up some of the angles…
Bringing in the senior person further hits profitability
But, some would take that hit to try and resolve the client issues
Lenny is a top performer - so make sure you’re checking in on him as well here
After rounding up the votes… C edges ahead, with the real debate being about extent of senior involvement.
WHAT LINKEDIN SAYS
Some interesting, super quick reads. I recommend picking one link to read.
Don’t throw your account manager under the bus - an example of what not to do
After COVID, clients expect more from their account managers
WHAT THE INTERNET SAYS
Looking beyond LinkedIn, a few more caught the eye…
Once again, I recommend picking one link to read.
THE VERDICT
Having reviewed the evidence, I’ve given the verdict that…
Most people think it’s worth holding onto bigger clients like this, even if they’re difficult, and less profitable.
But how involved senior management should get is contested.
One thing is for sure. Pretty much no one would immediately cut the current Account Manager from the account - particularly a top performer.
See you in 2 weeks for the next debate round up.
If you want to get involved in the debates (includ'ing the one above) and you’re not part of the Slack, just sign up to either the free or paid tier of Emergers Planet membership.
GENERAL EMERGERS PLANET UPDATES
A new addition, some general updates.
- NEW MEMBERS
We’ve had various new members join, including…
A Marketing Lead in cyber
Strategy Director at a digital ads agency
Senior OD Consultant
Talent Acquision Leader
Co-founder of a creative agency
This adds to our existing members of Ops Directors, Marketing Directors, F'ounders, Product Leads, etc.
- EVENTS
We’re planning our first event, a speaker rumble (boxing match meets panel event), in April/May. More details to come soon!
Have a great weekend.