When it comes to managing your business’s accounts, it is important to have a clear set of KPIs, or key performance indicators, in place to help measure and track progress and performance. Account management KPIs are used to measure the success of your accounts, and they can also be useful in helping to inform areas that need improvement. Having a clear understanding of the KPIs that are relevant to your business will help you make informed decisions, identify potential problems, and understand the areas where you need to focus your efforts. In this blog post, we will take a look at why understanding and setting account management KPIs is important, some examples of KPIs that can be used to measure success, and the effects of setting KPIs on your company’s overall performance.
Why do businesses track KPIs?
Businesses track KPIs for a variety of reasons, including:
What are account management KPIs?
Account management teams track metrics known as key performance indicators (KPIs) for both internal and external performance reviews. Key performance indicators, or KPIs, are used to track particular metrics within a division of the company. For instance, you can monitor marketing KPIs to ascertain which particular components of your marketing campaigns are effective.
12 KPIs to track for your business
Here are 12 crucial account management KPIs your company should monitor:
1. Customer lifetime value
The amount of revenue that one account or customer can bring in for the company overall over the course of the relationship is measured by the term “customer lifetime value,” or CLV. This aids a business in giving each client a value in order to decide which accounts to give priority, and the business then bases its financial plans on those conclusions. Companies determine CLV by using this formula:
CLV equals average customer spending per visit times the frequency of visits and the length of the relationship.
Using this formula, a business can determine that a customer who spends $200 on average per visit and visits 80 times yearly on average over the course of an 11-year relationship has a CLV of approximately $176,000.
2. Customer interaction
This metric enables the business to track how much time account managers devote to each unique client or account. Customer satisfaction is frequently correlated with the amount of time spent with a customer. Spending more time with a customer can help to build trust between the two parties and enable account managers to better understand their preferences. Accurate measurement of both inbound and outbound touch points, or the places where account managers interact with customers, is necessary for measuring customer interaction.
3. Customer satisfaction
Customer happiness is measured by customer satisfaction with the business. Surveys are one of the simplest ways to regularly and accurately gauge customer satisfaction. Businesses ask customers directly about their experiences by sending them satisfaction surveys via email, receipts, and other channels. You can determine your customer satisfaction using the “net promoter score,” or NPS. This rating places clients according to their propensity to recommend the business, its goods, or services. The scale divides customers into thirds:
You can calculate customer satisfaction by using this formula:
NPS = % of promoters – % of detractors
4. Organic growth
Organic growth is a KPI that tracks the expansion of a business through its existing clientele, whether those clients are expanding their engagement with the company or recommending its goods and services to others. This is a crucial indicator for business growth because it demonstrates how much current customers are contributing. You can take into account a number of indicators within the organic growth KPI, such as:
5. Employee satisfaction
Customer relationship success among your company’s account managers is frequently correlated with their level of satisfaction. Account managers are more likely to produce better results by providing customers with better service and building stronger relationships if they are enthusiastic about their work and happy in their roles. It’s crucial to gauge employee satisfaction in order to ascertain what the business can do to better serve them and improve their working conditions and attitude toward the position. This crucial account management KPI can be measured in two ways: by asking employees to complete internal reviews or by conducting individual employee interviews about their satisfaction.
6. Customer churn rate
The number of customers who voluntarily cancel their accounts over a given period of time is measured by a KPI called customer churn rate. You can measure customer churn rate with this formula:
Customer churn rate is calculated as total customers lost over a period of time x divided by total customers at the start of the same time period.
Businesses can further investigate the causes of customers leaving by using the churn rate formula to identify which customers are leaving. For example, if a company loses 5% of its customers over a six-month period, it might be able to correlate that loss with a change of location You can decide how to stop more customers from leaving the business by figuring out why customers are leaving.
7. Client acquisition rates
This KPI tracks the number of new customers account managers bring in from a pool of customer prospects. For example, if you have 1,500 prospects and your account managers convert 480 of them into customers, your acquisition rate for the pool is around 32% It’s critical to gauge the effectiveness of various outreach strategies. Common outreach techniques include cold calling, emailing, and in-person customer interactions. You might find that cold calling only accounts for around 5% of all customer conversions, but in-person interactions account for nearly 85% This helps you learn where to focus resources.
8. Time to resolution
Time to resolution is a KPI that gauges how well your account managers are resolving client issues or business issues. The time to resolution metric measures how long it takes to resolve a complaint or shortcoming from the time it first surfaced. You could gauge how quickly your account managers respond to customer complaints about the business and resolve them, for instance. Because it may play a significant role in overall customer satisfaction, this is crucial. Shorter resolution times can help increase satisfaction and trust.
9. Customer upsell revenue
This KPI measures the amount of money the business makes from upselling to customers. Upselling refers to persuading customers to buy a more expensive product than they are currently purchasing. For instance, in order to upsell coffee, a coffee shop might regularly give customers the option to buy a large coffee for just 25 cents more. Knowing your upsell revenue can help you evaluate how well your account managers and staff converse with customers and persuade them to buy more from your business.
10. Touches to closure
TTC, or touches to closure, is a KPI that gauges how well your account managers are doing when it comes to generating new business for the company by way of touch points. Advertisements, phone calls, and in-person customer interactions are examples of touch points. TTC tracks each prospect’s progress from the initial touchpoint to conversion into a paying customer. This teaches you more about account managers’ methods for luring prospects and the incentives they use to persuade them to become clients. In order to increase conversions, you can identify the touch points and strategies that work best and concentrate company resources on them.
11. Customer outcomes
The account manager’s success in achieving customer goals is gauged by the customer outcomes KPI. Your account managers’ efforts can be measured against the results to see if they’re accomplishing your customers’ goals. For instance, you can establish goals for each manager by tracking the number of calls each account manager makes each day in comparison to the number of conversions they produce. This enables you to assess the effort of your account managers and identify the ones who are most successful at achieving objectives.
12. Average reply time
The average reply time, or ART, is a statistic that gauges how long it takes an account manager to respond to a customer’s request or contact. As leads and customers may equate faster response times with better customer service, this KPI is directly related to both lead conversion and customer satisfaction. You can identify which account managers are performing by measuring ART, as well as how frequently there are significant gaps between requests and responses. You can use this data to enhance customer service and build a more responsive account management team to increase conversions.
Ep 12 – KPIs, Reports and Account Management
FAQ
What are the KPIs of an account manager?
- Customer Lifetime Value (CLV) …
- Referenceable Clients. …
- Customer Satisfaction. …
- Customer Outcomes. …
- Customer Interaction. …
- Organic Growth. …
- Client Acquisition Rates. …
- Employee Satisfaction.
What are the 5 key performance indicators?
- Revenue growth.
- Revenue per client.
- Profit margin.
- Client retention rate.
- Customer satisfaction.
What are 9 KPIs?
Invoice validation is one of the most crucial KPIs for Accounts Payable. To ensure a smooth transaction, the invoice and purchase order must match.
