A complete guide to SaaS account management

Software-as-a-service (SaaS) companies have transformed the role of an account manager to meet the unique needs of this space.

It’s an account manager’s job to manage the customer relationship – that much has stayed the same. However, their goals, methods and daily activities are quite different compared with account managers in other fields.

In this article, we explain what SaaS account management is and how it can benefit your company. Then, we cover the daily roles of a SaaS account manager and finish with some best practices you can use to boost revenue and improve customer satisfaction.

What is SaaS account management?

In SaaS, account management is the process of managing a customer’s relationship with the software. The overarching goal is to increase revenue by building trust, improving customer retention and encouraging the use of your platform.

For example, as a SaaS account manager, you might:

• Promote new software and offer upsells and cross-sells

• Guide customers through their free trial

• Manage the creation of bespoke solutions for top customers

• Track customer data usage and follow up where needed

• Troubleshoot customer issues and provide customer service

Focusing on after-sales service in SaaS businesses is paramount because the majority of returns are recurring revenue from existing customers.

The objective of SaaS account management is to get clients to renew their software subscriptions, upgrade to higher-tier plans or purchase software upgrades.

Account management becomes even more important when you have enterprise accounts that you want to ensure are taken care of. These key accounts usually represent the largest percentage of revenue for a business and are, therefore, crucial to retain.

4 benefits of SaaS account management

Account management is key to growth in the SaaS space. Ensuring that key accounts are satisfied is a powerful way to guarantee that they’ll renew their subscriptions or invest in your other products and services.

By creating an in-depth customer roadmap, maintaining clear communication and focusing on customer relations, you can achieve the following benefits.

1. Reduce customer churn

Customer retention is one of the biggest challenges for SaaS companies. In such a highly competitive environment, switching to a competitor’s product is easier than ever. While some churn is inevitable, SaaS account managers should focus on reducing it to an acceptable level.

It’s generally agreed that a “good” churn rate is around 5%, especially if you offer self-serve software solutions. However, the higher the value of your contracts, the lower your churn rate should be.

Users move on for several reasons, such as poor customer service, an ineffective onboarding process or a lack of resources.

Imagine two customers. The first invests in software but has no account manager. They’re left to their own devices to work out how to apply it. When they’re unable to get their questions answered, they move on to a competitor.

The second customer purchases software from a company with account managers and stays on for an extra year. Why? The account manager contacts the customer after their purchase, helps them through the onboarding process and shows them a more efficient way to use the software.

2. Maximize lifetime value

Customer lifetime value (CLV or LTV) is one of the most important sales performance metrics to monitor. It represents the total revenue you can expect from a single customer account.

The longer you retain a customer, the higher their lifetime value. This is one of the main tasks for SaaS account managers: getting customers to renew their subscriptions to maximize CLV.

Account managers also drive CLV by finding cross-sell and upsell opportunities, optimizing sales processes and locating innovative solutions for customers.

Imagine a customer wants to combine their CRM and lead generation software. They’re considering switching to another product they’ve seen since they don’t know their current solution is capable of it.

With the help of an account manager, they learn of a lead-finding add-on and decide to renew their subscription. Not only is that customer retained, but the upsell has brought in additional recurring revenue.

3. Streamline business processes

An account management plan helps you identify users that are likely to produce more revenue. By focusing on these customers, you can streamline processes and better allocate account management resources.

With account managers in place, the sales team can focus on what they do best – finding and nurturing new sales leads. Once a new customer is secured, the account manager can handle the account going forward.

Likewise, you become an expert on those accounts because you spend so much time trying to understand your customers. This makes you far more effective at handling requests and problems (as opposed to a generalized sales team).

4. Get more referrals

The primary goal of account managers is to retain your clients. A pleasant side effect is that satisfied customers often refer your company to their friends and colleagues. If you have a few accounts that are impressed with your service, you might find a steady stream of new customers through word-of-mouth.

According to the SaaSquatch 2020 State of Referral Marketing Report, referred customers:

• Are 18% more loyal

• Have a 16% higher lifetime value

• Spend 13.2% more than non-referred customers

So, not only do referrals bring in new customers, they bring in more valuable customers.

The day-to-day roles of a SaaS account manager

The daily roles of an account manager at a SaaS company will vary slightly, depending on the product and industry.

Nevertheless, there are a few things that all account managers have in common.

At a high level, key activities could be categorized as:

• Financial: Renewing and growing existing accounts (retention, upsell and cross-sell activities).

• Value-based: Onboarding and consistently driving value to customers.

• Relationship-based: Managing and nurturing relationships with the account stakeholders.

Here are the day-to-day tasks you might expect as a SaaS account manager:

Providing a point of contact for your customers

Account managers are often known as the “face of the company” because they are the main source of customer interactions.

If your customer has any issues or inquiries, it’s your job to answer them swiftly and effectively. You need to be on hand to solve any problems with your products or services. You also need to proactively meet their demands and find innovative ways to offer cross-sells and upsells.

For this reason, you need to be highly skilled in communication and negotiation. Much of your daily work will be communicating with customers and balancing your customer’s needs and the company’s profits.

Account planning and project management

Account managers must take a strategic approach toward growing and retaining their customer base. That’s where account planning comes in.

Account planning is the process of mapping out important details about the customer, like their decision-making process and what strategy you should use to retain them.

This involves several things, including customer relationship management and setting clear sales goals. It also involves keeping track of key sales metrics like recurring revenue, churn percentage and contract renewal rate.

Developing a detailed customer roadmap helps you streamline communications with your customers. Further, because you’re the expert when it comes to their accounts, you will often oversee projects or work alongside other teams to deliver additional value.

For example, SaaS companies will often help cater software to their largest clients, like adding custom capabilities to meet their needs. As an account manager, it’s your job to communicate the customer’s needs to the project team. Let the client know how the project is going and explain how to use the final product.

Shaping customer workflows

To provide a compelling customer experience, account managers need to refine every touchpoint. A unique aspect of SaaS account management is that customer workflows can be customized based on unique software needs.

Pay attention to how (and why) your customers engage with your product to gain insights and deliver a truly personalized experience.

This can also help other teams. For example, the product development team might be able to validate and prioritize changes to improve the product based on usage data. You might find that users are getting stuck on a particular action that could be streamlined or automated. You could also offer additional training and resources so users can get past that obstacle.

Sales and marketing can use these insights to target key software needs in particular demographics.

Similarly, an account manager might work with the customer success manager to improve the experience throughout the entire customer lifecycle.

Taking a personalized approach to customer workflows helps you take a step toward developing a long-lasting relationship with your customers.

Reduce friction, build confidence and generate brand advocates

Account managers try to land accounts and grow them. This process involves acquiring small customers and gradually expanding them to garner more business. As the customer expands, they generate more revenue, become more loyal and eventually become a brand advocate.

The secret to delighting and expanding your customer accounts is to provide an end-to-end experience that’s as effortless as possible. There should be no obstacles in the way of your customer achieving success with your product.

To reduce friction as an account manager, you need to seek feedback and create a sense of goodwill between the customer and your brand. You can do this by acting on the feedback they receive.

For example, if a customer suggests a product change, show them that you’ve passed the message on to the development team and let them know of any temporary solutions they can use in the meantime.

Manage your sales quota

As an account manager, your primary goal is to meet and exceed sales objectives set by the company. These are the goals your company has deemed necessary for achieving business success. It’s also how your performance as an account manager is evaluated.

For example, companies often set volume quotas like “sell 50 premium subscriptions this month” or revenue quotas like “sell $10,000 in revenue this quarter”.

The good news is that many companies offer a bonus for exceeding sales goals in a particular time frame. This is generally on top of any commission you receive for that client, and it’s one of the major incentives for becoming a successful account manager.

Preparing sales reports

Account managers must prepare periodic reports, including routine sales reports and forecasts.

In larger organizations, you might work alongside a sales coordinator or administrative officer to generate these reports and present them to senior management. In smaller organizations with fewer staff members, you might have to generate the reports yourself.

These reports, alongside quarterly business reviews, will help you demonstrate to stakeholders how your customers are performing. This will enable you to receive high-level feedback and work to deliver the best service in your power.

While the content might vary depending on your company, a sales report will generally include metrics like accounts won, accounts lost and revenue. It will also include:

• Information about your sales pipeline and opportunities

• Reflections on your goals for the last year

• The number of free trials and demo requests

KPIs that demonstrate customer count and account growth like annual recurring revenue (ARR), retention rate and CLV

6 best practices to get the most out of SaaS account management

Account management requires a lot of upfront work and attention to detail. To meet your customers’ needs, you first need to understand them. By following the strategies below, you’ll be able to develop a powerful account management strategy that retains customers and drives sales.

Here are the 6 best practices for SaaS account management:

1. Understand your clients in and out

Getting to know your customers is vital in SaaS account management. It’s the only way to ensure that you understand their:

• Needs and wants

• Budget constraints

• Demographic information

• Values and interests

• Communication preferences

• Purchase and behavioral patterns

Developing in-depth knowledge about your customers also helps you understand any risks associated with their accounts.

To better understand your customers, create buyer personas that define your target audience in detail. This helps you personalize your value proposition in the most effective way, ensuring that your messaging stays relevant for different customer types.

There are multiple things you can do to find the information you need to create buyer personas. For example, you could send surveys to customers, conduct interviews or ask questions on social media. You could also make use of social listening tools to find actionable insights based on what people are saying about you on social media platforms.

2. Understand strategic account management

To succeed in account management, you need to identify and target key accounts. These are the accounts that do one of the following:

• Contribute a significant portion of your revenue

• Open up new areas of growth

• Have another strategic value, like being a huge brand name that generates publicity

It’s important to spend extra time maximizing your relationships with these accounts because losing them would have such a massive impact on your business. By developing long-term relationships with them, you guarantee success for both you and the customer.

SaaS companies usually assign highly experienced account managers to their enterprise software sales. These are the customers that take on the highest tier plans for the most number of users. In SaaS, these customers are like gold, and all efforts need to be made to keep them happy.

Because of their size and unique needs, enterprise clients might need customized services and around-the-clock support. The enterprise account manager’s job is to ensure these needs are met.

3. Develop an effective onboarding process

Effective onboarding is essential if you’re going to compete in the modern SaaS market. Customers expect more than ever, and the onboarding process is the first real impression they get of your company.

According to Wyzowl, 86% of customers say they’re more likely to stick with a business that invests in onboarding content, and 63% consider the onboarding program when making a purchasing decision.

Making your onboarding process efficient and easy to follow will ensure your customer’s success with your product and encourage them to stick around.

A solid onboarding process for a SaaS product might look something like this:

• The user signs up for your software and receives a warm welcome email with links to onboarding material.

• They take a virtual product tour that provides helpful tips and an introduction to the main features and functionality of your software.

• They’re provided with a link to your knowledge base that contains webinars, tutorials, user guides, FAQs and other documentation to learn your product in and out.

At the same time, you should have agents ready to assist with any queries. Depending on your software (and the customer), it can also be a good idea to have a dedicated onboarding team that’s ready to help new customers.

4. Be authentic, helpful and indispensable

Customer success and account management share many objectives, including keeping customers satisfied and growing accounts.

Since you’re the primary point of contact, you need to be highly skilled in customer service. This doesn’t just mean knowing the product in and out; it also means being authentic and approachable.

It goes even further than that. You need to go above and beyond with customer support and become a trusted advisor for your accounts.

This involves taking a strategic approach to communication. Be professional yet friendly and display your helpfulness by showing that you’re invested in the customer journey.

Ask meaningful questions and seek feedback when something works (or doesn’t). Likewise, approach cross-selling and upselling opportunities carefully by taking a soft approach. You don’t want to appear as a hardened salesperson but as a respected expert on the topic.

The more your customer respects and appreciates your input, the more they’ll listen to your recommendations and advice.

5. Track the right data to generate actionable insights

In sales, tracking the right data can help you understand your customer’s usage behaviors. Sometimes, it’s even better than direct feedback, helping you find insights that even your customer isn’t aware of.

Without looking deeply into how your customer is using your product, you’ll never know what’s working for them and what isn’t.

Sales data analytics tools are vital here. They can help you track account acquisition costs, engagement rates, user demographics and more. Likewise, they can help you visualize where in the sales funnel you’re losing customers.

Some other KPIs to track include:

• Customer Effort Score (CES): The amount of effort it takes a customer to achieve a goal (like fixing a problem or placing an order)

• Customer Satisfaction (CSAT): How satisfied your customers are with their experience

• Net Promoter Score (NPS): How likely your customers are to recommend you to others

With these insights in hand, you’ll be able to find opportunities to help your customers. For example, you might find that a small tweak to the user experience could improve their processes.

6. Use the right tools

Powerful tools can help account managers make efficient use of their time while providing the best possible support to their customers. There are several tools that can be useful to account managers in the SaaS space, but the most important is CRM software.

A CRM system is a set of tools combined into one easy-to-use package. It acts as a single source of truth for all of your contact and account data, letting you record, organize and analyze it at need.

An effective CRM will let you see all customer activities, pending deals and ongoing projects. It’ll also allow you to automate tasks, optimize sales team collaboration and discover account-based insights that can take your support to the next level.

Other tools to consider include:

• Remote conferencing apps to easily schedule and hold meetings with your clients remotely. This software should also let you enable screen sharing so that you can run live demonstrations smoothly. Some examples include Zoom, Google Hangouts and GoToMeeting.

• Contracting and e-signature tools that let you send and sign contracts without having to deal with physical paper copies. These help save money on printing and shipping costs. They also speed up the sales cycle, letting you generate quotes, proposals and contracts faster. Tools to consider include Pipedrive’s SmartDocs and DocuSign.

• LinkedIn Sales Navigator to monitor changes in the market, hiring decisions in your account’s organization and more. LinkedIn Sales Navigator can help you stay on top of key trends and strategic shifts in your industry.

Final thoughts

Once upon a time, sales focused on bringing in new customers for one-off sales. With the growth of SaaS businesses, it’s become crucial to nurture customer relationships through an effective account management strategy.

By providing as much value as possible, you ensure that your customers stick around in the long term, renew their subscriptions and bring in more revenue.