In many companies, once a salesperson has closed a deal with a new customer, the day-to-day responsibilities of managing the account are transferred from a sales rep to an account manager. Using this type of structure offers a number of benefits & challenges.

Benefits of Creating Account Managers
Sales team has more time available to actively sell rather than manage. An account manager earns less than a top sales performer, so you can manage existing customers more profitably. In many industries, account management is a more routine function than sales and is better suited to a different personality profile than a sales position. By splitting the functions, you can ensure that the right person is managing the account.

Challenges that Result
An account manager typically has less sales experience and usually isn’t as successful as a salesperson at growing accounts. If the salesperson stays on the account team, the customer can get confused about who to contact. If something goes wrong with the account, the account manager may not have the business or industry experience to address and resolve it as quickly as a salesperson might.

Issues to Resolve
What are the responsibilities for an account manager on a day-to-day basis? Who is responsible for “growing” an account, i.e. convincing the customer to buy more volume, more frequency, or to expand into other departments? How will you transition an account from a sales rep to an account manager? When should an account manager seek help from a sales rep or other team member? Who will the account managers report to? How many account managers will you need?

Compensation
Many companies make the mistake of offering commissions to account managers or salespeople to reward them for growing new accounts. They feel that they don’t need to pay commission on “house” accounts, yet it’s ten times more expensive to replace a lost customer with a new one.

A better approach: Provide strong incentives for your team to maintain and grow your existing accounts. If a salesperson can make more money on a new customer versus existing one, the company will suffer and the team will spend far more time acquiring that one new customer than managing existing ones.