Deliverability
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11 KPIs for Account Managers to Track for Instant Sales Success

Discover top KPIs for account managers to track and improve client retention. Get instant success in your role today!
Written by
Samruddhi
Published on
October 10, 2024

Account Management KPIs (Key Performance Indicators) are measurable values that account managers use to track and improve client retention, customer satisfaction, and business growth.

In fact, businesses that actively track KPIs see a 21% increase in profitability, according to a Gartner report. In this guide, you'll learn top KPIs to monitor for business success.

Importance of Tracking KPIs for Account Managers

Importance of Tracking KPIs for Account Managers
Importance of Tracking KPIs for Account Managers

1. Improves Strategic Decision-Making

  • Tracking KPIs for account managers helps you make better decisions. When you know your numbers, like the Customer Satisfaction Score or Customer Lifetime Value, it’s easier to see where to focus.
  • For example, if satisfaction is low, you can change your approach right away. This leads to faster, smarter choices that improve overall performance.

2. Early Detection of Client At-Risk Signs

  • When you monitor key metrics like Customer Churn Rate or Net Promoter Score, you can spot clients who may leave early.
  • If a customer is unhappy, you’ll notice through these KPIs before it’s too late. By acting quickly, you can prevent losing valuable clients. This helps protect your company from sudden losses.

3. Aligns Account Management with Business Goals

  • KPIs also help you align your account management tasks with company goals.
  • By tracking how much Account Managers spend on clients and reviewing Upsell and Cross-Sell Revenue, you can see what’s working.
  • This ensures your work matches the business’s long-term growth. Plus, it shows how account management plays a key role in driving success.

11 Essential Key Performance Indicators

8 Essential Key Performance Indicators
11 Essential Key Performance Indicators

1. Customer Satisfaction Score (CSAT)

Customer Satisfaction Score (CSAT) measures how happy your customers are with your services. After a customer interacts with your company, they are usually asked to rate their experience.

This rating can calculate customer satisfaction and shows if they are satisfied or not. It is one of the most important KPIs for account managers because it directly reflects customer feelings.

Why is it important:

Keeping customers happy is key to maintaining long-term relationships. When customers are satisfied, they stay loyal, buy more, and even refer others.

According to research, companies with higher CSAT scores see more organic growth. On the flip side, low scores can be an early warning sign that clients are unhappy and may leave.

How to calculate it:

  • To calculate CSAT, you ask customers to rate their experience, usually on a scale of 1 to 5, where 1 means "very unsatisfied" and 5 means "very satisfied."
  • Then, you use this formula: CSAT = (Number of Satisfied Responses / Total Responses) × 100
  • For example, if 80 out of 100 customers are satisfied, your CSAT score is 80%.

Clients who are satisfied with your services often become referenceable clients, willing to vouch for your business in the future.


2. Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) calculates the total revenue a customer is expected to bring in over the course of their relationship with your company.

It’s a powerful metric for account managers because it helps you understand the long-term impact of your efforts. Instead of looking at just one sale, CLV shows the overall value of keeping a customer over time.

Why is it important:

Knowing CLV helps you prioritize clients who bring the most value. It also guides your decisions on where to spend resources.

For the sales process for example, if a customer has a high CLV, you’ll want to invest more time in nurturing that client relationship to increase upsell and cross-sell revenue. Additionally, focusing on customers with a higher CLV can improve overall revenue growth.

How to calculate it:

  • Calculating CLV might sound complex, but it’s easier with this formula: CLV = (Average Purchase Value × Purchase Frequency) × Customer Lifespan
  • For example, if a customer spends $100 every month and stays with you for 3 years, their CLV would be $100 × 12 months × 3 years = $3,600.

3. Net Promoter Score (NPS)

Net Promoter Score (NPS) measures how likely your customers are to recommend your company to others. It's a straightforward question: "How likely are you to recommend us to a friend, on a scale of 0 to 10?"

Customers who rate 9 or 10 are promoters—they love your brand. Those who give 0 to 6 are detractors—they’re unhappy.

Why is it important:

NPS is a powerful way to understand your business strategy and customer’s overall satisfaction and loyalty.

A higher NPS means your customers are happy and spreading good word-of-mouth about your business, which leads to organic growth.

If your NPS is low, it might mean that there are issues to fix quickly to avoid losing customers.

How to calculate it:

  • To calculate NPS, you subtract the percentage of detractors from the percentage of promoters. The formula is: NPS = % of Promoters - % of Detractors
  • For example, if 60% of your customers are promoters and 20% are detractors, your NPS score is 60 - 20 = 40.

4. Customer Churn Rate

Customer Churn Rate shows how many customers stop using your product or service during a certain period. It’s a simple percentage that tells you how much of your client base you’re losing.

For account managers, tracking customer outcomes through this KPI is critical to keeping customers and improving customer satisfaction.

Why is it important:

If your churn rate is high, it means you’re losing customers quickly. This can harm your business in the long run. Knowing your churn rate helps you find ways to keep customers engaged.

For example, by focusing on customer satisfaction or upsell revenue, you can reduce churn and increase your long-term success with customer goals.

How to calculate it:

  • The formula for churn rate is: Customer Churn Rate = (Customers Lost During a Period / Total Customers at the Beginning of the Period) × 100
  • For instance, if you begin the month with 100 customers and lose 5, your churn rate would be calculated as (5 ÷ 100) × 100 = 5%.

Tracking KPIs like customer satisfaction among existing clients helps in identifying potential risks and areas for improvement.


5. Upsell and Cross-Sell Revenue

Upsell revenue is when you convince your customer to buy a more expensive product or service. Cross-sell revenue happens when you sell related products to a customer.

For example, if a customer buys a phone, offering them a phone case is a cross-sell. Both types of sales are important for growing your revenue without needing new customers.

Why is it important:

Upselling and cross-selling allow you to get more value from existing customers. Instead of constantly chasing new clients, these techniques help you make the most out of your current customer base.

Studies show that existing customers are more likely to buy from you again, which makes these methods more efficient. By tracking upsell revenue and cross-sell rates, you can see which strategies are working and improve them over time.

How to calculate it:

  • To calculate upsell and cross-sell revenue, you need to track how much extra income comes from these types of sales. The formula for upsell revenue is: Upsell Revenue = (Revenue from Upsell Sales / Total Revenue) × 100
  • For cross-sell, the formula is similar: Cross-Sell Revenue = (Revenue from Cross-Sell Sales / Total Revenue) × 100
  • For example, if your total revenue is $10,000 and $2,000 comes from upselling, your upsell revenue is 20%.

6. Customer Interaction and Relationship Management

Customer interaction refers to the communication you have with your clients, whether through phone calls, emails, or in-person meetings.

Continuous relationship management techniques also means keeping your customers happy and loyal by building strong, trusting connections. Both are key for maintaining long-term customer relationships.

Why is it important:

Regular interaction with customers helps you understand their needs and solve their problems. This builds trust and makes them more likely to stay with you.

Strong relationships also increase the chances of more repeat customers, sales and customer loyalty. By managing customer relationships well, you improve overall customer satisfaction, which is crucial for business growth.

How to calculate it:

  • There’s no single formula for calculating customer interaction, but you can measure the number of interactions (calls, emails, meetings) and their quality.
  • You can also track how these interactions impact other KPIs like net promoter score and customer lifetime value.
  • For example, more positive customer interactions often lead to higher customer satisfaction and loyalty.

Focusing on customer success not only enhances client relationships but also drives repeat business and long-term loyalty.


7. Contract Renewal Rate

Contract Renewal Rate shows how often customers renew their contracts with your company. It’s a simple percentage that tells you how many clients decide to continue their services after their contract ends.

For account managers, this is a vital KPI because it shows how satisfied clients and key account managers are with your services.

Why is it important:

A high contract renewal rate means that your customers are happy and trust your business. They believe your product or service is worth staying with. This leads to long-term success and a steady revenue stream.

A low renewal rate, however, could signal that customers are not satisfied or see better options elsewhere.

How to calculate it:

  • The formula for Contract Renewal Rate is: Contract Renewal Rate = (Number of Renewed Contracts / Total Contracts Due for Renewal) × 100
  • For example, if you had 100 contracts up for renewal and 80 customers renewed, your contract renewal rate is (80/100) × 100 = 80%.

Key accounts play a vital role in nurturing long-term client relationships, ensuring higher contract renewal and client acquisition rates.


8. Employee Satisfaction

Employee Satisfaction measures how happy and engaged your employees are with their work. It’s often surveyed by key account manager by asking employees how satisfied they are on a scale, much like how customer satisfaction is measured.

For account managers, happy employees and sales managers usually mean better service for clients.

Why is it important:

When employees are satisfied, they are more productive, stay longer in their jobs, and deliver better service. In fact, companies with higher employee satisfaction often have higher customer satisfaction.

If key account managers are stressed or unhappy, it can affect how they interact with key clients, and hurt the business in the long run.

How to calculate it:

  • To calculate Employee Satisfaction, you can use surveys or feedback forms.
  • One common way is to use the Employee Net Promoter Score (eNPS). The formula is: eNPS = % of Promoters (Happy Employees) - % of Detractors (Unhappy Employees)
  • For example, if 70% of your employees are happy and 20% are not, your eNPS would be 70 - 20 = 50.

9. First Contact Resolution Rate (FCR)

First Contact Resolution Rate (FCR) measures how often customer issues are resolved during the first interaction. This means that the customer does not have to call or email back for the same problem.

Why is it important:

A high FCR means your team is efficient and skilled at solving customer problems right away, which improves customer satisfaction.

Customers prefer quick and easy resolutions, and FCR is a great indicator of how well your team handles those needs. A low FCR, on the other hand, can frustrate customers and lead to lower loyalty.

How to calculate it:

  • To calculate FCR, you can use the formula: FCR = (Number of Issues Resolved on First Contact / Total Number of Issues) × 100
  • For example, if you handled 100 issues and resolved 80 of them on the first try, your FCR would be 80%.

10. Time to Resolution (TTR)

Time to Resolution (TTR) measures how quickly your team resolves customer issues from the time they first report them. It tracks how long a customer has to wait for a solution.

Why is it important:

A shorter TTR leads to happier customers, as nobody likes waiting for solutions. Long resolution times can hurt your customer satisfaction score and increase customer churn rate.

By monitoring account manager employee performance, and reducing TTR, account managers can improve the customer experience and improve overall satisfaction.

How to calculate it:

  • You can calculate TTR using this formula: TTR = Total Time Taken to Resolve Issues / Total Number of Issues Resolved
  • For example, if you resolved 50 issues in a total of 500 hours, your TTR would be 500 / 50 = 10 hours per issue.

11. Customer Referral Rate

Customer Referral Rate measures how often your satisfied customers refer new clients to your business. It tracks the percentage of your existing customers who actively promote your products or services to others, bringing in new leads.

Why is it important:

A high referral rate indicates strong customer loyalty and satisfaction. Customers who are willing to refer others to your business show that they trust your brand.

Additionally, referred customers tend to have a higher lifetime value and are more likely to stay loyal, making this KPI a valuable measure of both customer satisfaction and organic growth.

Tracking customer referrals also can help you identify areas where your customer service shines and can be leveraged for growth.

How to calculate it:

  • The formula for calculating the Customer Referral Rate is: Customer Referral Rate = (Number of Referred Customers / Total Customers) × 100
  • For example, if 20 out of your 200 customers referred someone, your referral rate would be (20 / 200) × 100 = 10%.

Conclusion

Tracking the right KPIs for account managers, like customer satisfaction, net promoter score, and customer churn rate, helps you build stronger client relationships. By focusing on these three key account management metrics, you can improve business performance, increase customer lifetime value, and grow your revenue steadily. Always keep an eye on these KPIs to drive success.

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