In my last column, I addressed account manager (AM) productivity and why it matters to your business. The diagram below should make that obvious. The mean/average profit across the industry is too low to fund proper sales growth — for which AMs are accountable. I finished that column with a list of tools essential for an AM to achieve higher total revenue under management (TRM). TRM is contract value plus upsell value minus net renewals value.
AM productivity varies by company revenue as the chart to the right makes clear, but it really should not! The chart shows TRM (revenue per full-time equivalent employee or FTE) in relation to base compensation. Dividing the salary by revenue per FTE, we get a productivity factor as a percent cost of sales. The lower the number — of course — the better. However, to get an accurate ratio, the numerator must be apples to apples. I suspect that the “salary” in some of these numbers unfortunately includes more than base pay and may include some commission, bonuses and taxes/benefits (especially in the over $25 million group). What should this number be if we include all compensation?
The answer is about 3.75 percent of TRM.
Revenue per FTE and compensation by revenue size
This suggests a $3 million AM should have minimum annual compensation of $112,500. I would say that is a number any AM could live with and remain happily employed in your business, but how do you get there? The answer is investments in technology and training, so the AM is maximizing his or her time in activities that matter with tools that help them get work done faster and with proper internal support for some delegable activities.
AM job Description
- The activity column represents the core activities in the approximate order in which they might be done.
- The tools column outlines the applications an AM can employ in the field and office.
- The delegate column suggests activities that can be delegated in whole or part (Yes = in whole, No/yes = in part).
- Finally, the use of time column focuses on the highest use of time for an AM (A+ = top focus).
How to invest in the account manager:
- Start with the job description below and grade your AM from (1 to 5) for each activity.
- Focus on the areas you gave your AM a 5 to reinforce those skills with praise. Invest in technology that allows the AM to keep that edge of excellence and increase speed.
- Focus on one low score that is a top “use of time” activity and work on that weakness through on-the-job training.
- Identify activities that can be delegated to a designer, estimator or contract administrator in whole or in part and set up a simple procedure to maximize consistency.
- Lastly, focus on reducing time in B and C activities. Add a column to the chart below and enter the number of hours spent in each activity for a few weeks. Discuss it and fix it. This amount of time is often enough to habituate new behaviors.
The other big investment is in enterprise resource planning (ERP) software replacing Microsoft Word documents, spreadsheets and PowerPoint presentations.
Why? It’s simple. ERP software is app- and data-centric. This means the production of designs, estimates, proposals, site maps and the management of customer requests and complaints all happen in one place, where information is easily retrieved and manipulated by anyone at any time. Gone are the days of multiple docs married to spreadsheets scattered about your Q and S drives and individual Outlook calendars.
Consistency, processing speed, the ease of data retrieval and the sharing of site and customer information are the keys to efficiency. Combine these things with accuracy, and you have real gains in productivity.
