Companies Increase Investment in Strategic Account Manager Programs Across Industries

– SAMA and ZS Associates report identifies SAM is a growth priority –

/ PRNewswire / — A new report on strategic account manager (SAM) compensation found that SAM roles continue to grow in importance. Key indicators include the large percentage of future growth companies expect from their strategic accounts and increased investment that companies are making in their SAM programs. Strategic account management is a company-wide initiative in complex, highly matrixed organizations that focuses on building strong and mutually beneficial relationships with a firm's most important customers and partners.
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Conducted biennially, the "2013 Report on Strategic Account Management Compensation Practices” by the Strategic Account Management Association (SAMA) and global sales and marketing consulting firm ZS Associates includes feedback from more than 200 account managers across more than 185 companies with titles such as National Account Manager, Key Account Manager, Strategic Account Manager and Global Account Manager. Participants include North American and Western European companies from 27 industries. Commercial services, healthcare and the tech/IT industries represent about half of all survey respondents.

The study indicates that revenue growth from SAM accounts is expected to outpace overall company growth in 2013. On average, SAM account growth is forecasted at 10 percent for 2013 compared to forecasted company growth at 8 percent. Further, this 2 percent delta is double that from 2011, indicating that SAM account growth is an increasingly important component of growth strategy.

"SAM is a business strategy, not just a sales force initiative," said Mike Moorman, managing principal of the go-to-market strategy and transformation practice at ZS Associates. "SAM is a means to maximize mutual value with an organization's most important customers. Note, however, that as more and more organizations look to SAM to help them compete for the same strategic accounts, superior execution is rapidly becoming more important than the strategy itself."

The study also indicates increased investment in SAM accounts. While the median target compensation for SAMs has stayed steady at $162,000 since last year, the average number of accounts per SAM has decreased. This year, 68 percent of SAMs managed six or fewer accounts. In 2011, 50 percent managed six or fewer accounts.

"Together, these two factors indicate that the average investment that companies are making per SAM account has increased," said Moorman. "One reason for this trend is the desire to achieve deeper expertise in the customer's business, more consultative engagement approaches and co-creation of solutions. All of these require greater time and energy."

The escalating importance of strategic account management is further evidenced by the higher compensation level of SAMs with zero to two years of tenure in their current position. According to the SAM compensation report, the median total target compensation for this group is $14,000 higher than the total target compensation package for SAMs with two to five years of tenure. One reason for this pay differential is that many individuals in this group are likely tenured SAMs who were recruited away from their prior company. Under any scenario, the higher pay for this group is evidence of low supply relative to demand.

"The business acumen, expertise in the customer's business model, consultative skills and leadership skills required to be an effective SAM are not in high supply, and don't match well with the profile of many of today's sales people," said Moorman. "SAM skills are developed over time through practice, experience and apprenticeship. The rate at which a company can build a qualified talent bench is often a governing factor for how many SAM accounts they can have and how fast the program can grow."

Industry Trends in Account Management

Different industries are at various stages of maturity when it comes to their SAM programs. The tech/IT industry and the healthcare industry are examples of industries on opposite ends of the SAM spectrum.

The tech/IT industry has prioritized and fine-tuned its SAM programs over the last two decades. The industry places high demand on SAM skills and capabilities. SAMs must integrate and cross-sell across a tech/IT company's portfolio, but more importantly, they also must demonstrate industry thought leadership and credibility.

"In the tech industry, the SAM role places significant emphasis on business leadership and solution definition. This requires engagement with business and financial leaders – CIOs, CMOs, line-of-business leaders and CFOs – and the ability to represent customer needs to product management to facilitate the co-creation of solutions," said Ashish Vazirani, managing principal of the high tech practice at ZS Associates. "To establish credibility, many SAM program leaders are looking outside their companies to fill SAM roles with experts from target industries."

The healthcare industry, on the other hand, has only recently made a significant move toward increasing the breadth and depth of their SAM programs. Cost pressures, payer-provider consolidation and the increasing importance of payers in decision-making, for example, are driving the importance of account managers in the healthcare industry today. Strategic account managers play an increasingly important role with payers and providers and will continue to do so.

"While we've seen a rapid expansion of SAM-related roles in the pharmaceutical and medical device industries, there is still much work to be done to strengthen the effectiveness of these roles. Success in selling in healthcare in the coming years will depend more on large account wins and losses than it does today," said Bill Coyle, principal at ZS Associates. "Historically, fragmentation in U.S. healthcare has enabled success via one-to-one selling, but the future will likely require highly effective SAMs across many customer groups."

The report demonstrated that tech/IT SAMs earn about 7.5 percent more than healthcare SAMs. The average target compensation for a healthcare SAM was $158,240 compared to $170,000 for a SAM in the tech/IT industry.

In both industries, however, organizations rely on customer engagement, business acumen, collaborative problem solving and partnership-building skills provided by SAMs to be a core way in which they create superior customer value and company growth. "As core products and services become more commoditized, the business insights and problem solving provided by SAMs and their teams are becoming a key aspect of the value proposition," said Moorman. "Companies and teams who do this best will earn the greatest proportion of the customer's premium business."

To learn more or purchase the 2013 Report on Strategic Account Management Compensation Practices, visit: http://bit.ly/15eo4Ch and SAMA’s blog at http://bit.ly/16SWwiA.

Read this article by ZS Manager Peter Manoogian to understand how to best strike the right incentive plan balance during this increasingly competitive SAM talent war.

About ZS Associates
ZS Associates is a global leader in sales and marketing consulting, outsourcing, technology and software. For 30 years, ZS has helped companies across a range of industries get the most out of their sales and marketing organizations. From 20 offices around the world, ZS experts use analytics and deep expertise to help companies make smart decisions quickly and cost effectively. ZS comprises multiple affiliated legal entities. Learn more at: www.zsassociates.com.

About the Strategic Account Management Association
Founded in 1964, the Strategic Account Management Association is a knowledge-sharing organization devoted to advancing strategic customer-supplier value, collaboration and learning. For more information, please visit www.strategicaccounts.org.

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Media Contacts:
Andrea Schulz
ZS Associates
(847) 492-3124
andrea.schulz@zsassociates.com

Anahita Wadia Khan / Kristin Ellertson
Sikich LLP
(312) 541-9300, Ext. 104 / 101
akhan@sikich.com
kellertson@sikich.com