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What Is the Definition of Account Management in Business?

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An account management team creates and maintains company-customer relationships. Skilled account management professionals can increase a company’s profits and improve its reputation. To understand the importance of account managers and executives, you first need to know the definition of account management in business.

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What is account management?

Account management is the process of managing relationships with clients, an essential part of running a business. Account management teams typically have two objectives: retaining loyal clients and growing revenue by connecting with new customers.

An account manager’s job is to engage with existing clients and learn their needs, then determine how the company can best meet those needs. Account managers must build strong relationships with clients, understand their clients’ business objectives and offer solutions to help them meet those objectives.

An account executive is typically responsible for seeking out new clients, converting leads into customers and laying the foundation for long-term relationships. This involves connecting with potential customers and understanding their needs, then pitching the company’s products or services as a solution. It’s an important role that can help expand a business’s client base and grow its revenue.

Account management is a long-term commitment. Building relationships with clients takes time and intentional effort. Account managers and executives work hard to gain a client’s trust and establish rapport. If the account manager has a great relationship with a client, they can answer questions effectively, address concerns quickly and help clients achieve their goals. Effective account management results in satisfied customers who are committed to the company and the brand.

Related: How to Create a Performance Improvement Plan

Why is account management important?

A company’s long-term success often depends on how well they treat their customers. Executives in every industry have found that clients are likely to take their business elsewhere if they do not feel heard or appreciated. In the world of sales, a company can often grow faster by maintaining the trust of their current customers than they can by acquiring new ones. A loyal customer is more likely to make regular purchases and recommend the company to their associates and friends.

Best practices in account management

There are a number of industry tips and tricks that can be beneficial for account managers and executives. Here are some recommended practices that account management professionals can use to increase their effectiveness and efficiency:

  • Prioritize communication
  • Know the company
  • Know the client
  • Stay informed
  • Be goal-oriented
  • Protect the client’s interests

Prioritize communication

The foundation of any stable relationship is communication. In account management, this involves being open and transparent with clients. Before making a significant financial commitment or investment, most customers need to be assured that they are making a wise decision. Account managers and executives should be able to address concerns by conducting honest, two-sided conversations.

Account managers should be open to listening to their clients and genuinely considering their feedback, and account managers should craft thoughtful proposals that take client feedback into consideration. When clients feel that their concerns have been heard, they are more likely to trust the account manager’s judgment.

Know the company

To be successful as an account management professional, you need to be an expert on the company you represent. This means knowing the history, understanding the protocols and being able to answer any questions about the business quickly and accurately. One way that account managers win a client’s trust is by proving they have both expertise and experience. Account managers and executives should study their employers thoroughly and prepare themselves for potential client questions to gain the information they need.

Know the client

As a company’s main contact with its clients, account managers play an essential role in ensuring customer satisfaction. In addition to managing day-to-day operations, account managers must act as trusted advisors to their clients, providing valuable guidance and advice on various issues. An effective account manager should develop a deep understanding of their client’s business and objectives. The account manager should build strong relationships based on trust and mutual respect, helping clients reach their goals by working closely with them and always putting client needs first.

Stay informed

Skilled account managers and executives are constantly learning. An in-depth understanding of industry trends and standards is essential for every account management team. Extensive knowledge of the company’s competitors and business models is also beneficial. If news breaks regarding a significant industry development or if a competitor debuts a new product, the account management team should be prepared to answer a client’s questions or address concerns.

Part of an account manager’s or executive’s job description is to check in with clients regularly and stay informed concerning their activities and needs. For example, suppose a client is unhappy with their service or is considering taking their business to another competitor. In that case, the account management team should be aware of and prepared to address the issue.

Be goal-oriented

Account management teams should be strategic in their approach, constantly striving toward company goals as well as individual performance standards. Account managers are evaluated both quantitatively and qualitatively. From a quantitative standpoint, the number of customers managed and client revenue generated provides a good indication of how account managers support current business performance. In addition, qualitative factors, such as customer satisfaction or relationship quality, can provide more insight into how an account manager can develop deeper customer relationships that continue to grow over time.

Protect the client’s interests

Keeping a client’s best interests at heart is integral to being a successful account manager. The account manager should strive to maintain trusting relationships with customers and act as their advocate. This employee ensures that the client requests are communicated and prioritized throughout the company. Account management teams also act as mediators during conflicts between clients and the company. The goal should always be to retain customers by maintaining trusting relationships.

Related: 7 Effective Skills to Help You Become a Better Leader

Account management FAQs

Here are answers to some frequently asked questions concerning account management:

What does an account manager do?

Account managers build and maintain long-term relationships with a company’s clients and customer base. An account manager’s primary duties often include:

  • Engaging with clients and familiarizing them with the company
  • Facilitating open communication with clients by encouraging and answering their questions
  • Mediating negotiations over contracts or sales agreements
  • Acting as a client advisor by providing key information and offering insight
  • Reporting the results of their efforts to the company’s executives on a quarterly or yearly basis

How is an account executive role different from an account manager?

While an account manager focuses on maintaining existing client relationships, an account executive typically focuses on identifying and developing new relationships. An account executive’s primary duties often include:

  • Following up on leads and referrals for new business
  • Meeting with new clients to understand their business needs
  • Creating proposals and presenting to executive management

What skills are needed to work in account management?

Successful account management professionals possess several beneficial skills, including:

  • Communication Skills: Account management teams are skilled in both verbal and written communication.
  • Technical Skills: Account managers and executives use specific computer software and programs to carry out their duties and office tools like printers, fax machines and phones.
  • Leadership: Account management professionals should be confident in their ability to demonstrate initiative and be responsible for multiple projects.
  • Negotiation: Account managers and executives are often required to intervene in conflicts and facilitate agreements tactfully.
  • Organization: Account managers must have outstanding organizational skills and the ability to manage several relationships and requests simultaneously.
  • Empathy: Account managers help their clients by understanding what they need and then finding a way for the company to meet that need. Developing empathy means understanding where the client is coming from and what their goals are.
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