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The Benefit from Offering Account Management Services
By Tom Sweeny, ServiceXRG


Overview

Corporate sales organizations have long employed account management programs — in which a designated individual or team serves as the primary point of contact for customers — to maintain relationships with key clients. Recognizing the benefits gained through these associations, support organizations are increasingly embracing the account management concept as a way to not only sustain profitable, high-value relationships, but generate new top-line revenue streams. The following article offers insights from a study conducted by ServiceXRG to understand the current use, program structure and impact of account management programs.

TAM Program Drivers

While businesses take different approaches to delivering technical account management services, the drivers across programs are largely universal. Technical account management programs are typically introduced to provide customers with streamlined access to the expertise needed to keep high-impact systems and applications running. By making available a key contact with in-depth knowledge of a customer’s IT environment and business goals, TAM programs provide a level of security beyond that found in standard support offerings. The ability to offer high-end differentiated programs is one of two top reasons for offering TAM programs, the second is in response to direct customer demand.

Primary Reasons for Offering Technical Account Management Programs


Source: ServiceXrg

Although not cited as a top reason for offering a TAM program companies indicate that one of the top benefits realized is the opportunity to cultivate and deepen relationships with their customers. Creating a symbiotic connection among key parties can result in a long-term relationship in whose wake can follow support contract renewals, expanded use of service offerings, and new product sales.

TAM Program Structure – Dedicated or Teams

The basic structure of TAM programs varies from company to company. TAM services are often delivered through account teams, which handle more than one account but have expertise in the details of each, or through dedicated account managers, who are typically assigned to one or only a few accounts. Some support organizations offer technical account management programs as part of a support contract — typically a premium or similar contract — or to customers that meet certain criteria. Others make them available for purchase as an add-on to a support contract.

More than half of companies surveyed by ServiceXRG— 53.3% — offer access to TAM services solely through technical account teams, while the remainder — 46.7% — offer their customers the option of an account team or through a dedicated account manager. Teams and account managers can either deliver service from their home base, using various communications channels to interact with customers, or operate onsite at the customer location.

Structure for Delivery of Technical Account Management Services

Source: ServiceXrg


The Impact of TAMs

Businesses establishing technical account management programs have high expectations for the kind of returns they’ll see. Companies surveyed by ServiceXRG expect to see an increase in total revenues and support revenues and 71.4% believe they’ll enjoy increased support contract renewal rates. Although not everyone is seeing the growth in support and total revenues they expected, a significant portion of respondents report increases in both thanks to implementing TAM services. For instance, 71.1% and 65.8%, respectively, say they’ve seen growth in total and support revenues. And, while 71.4% said they anticipated increased support contract renewal rates, 60.5% actually report such an increase.

Meanwhile, TAM programs have improved respondents’ service-level agreement compliance at a better rate than expected: 42.9% said they expected to see an increase in SLA compliance rates; 65.8% report that they’re actually seeing such improvements. However, the number of priority 1 cases didn’t decrease as much as expected: 57% of respondents said they expected a decrease in these cases, while 47% said they’ve experienced a decrease.

The Impact of TAM Program

Source: ServiceXrg

Conclusion

Support organizations are increasingly establishing technical account management programs. These programs — in which an individual or team is designated the primary point of contact for technical issues for certain accounts — give companies a prime opportunity to strengthen relationships with their customers. By creating an environment in which technical issues are solved efficiently with a minimum of disruption and by communicating with key stakeholders on any and all issues related to their products and service, TAMs can be instrumental in securing a long-term relationship with a customer.

While it’s important that organizations be able to measure the financial impact that TAM services have on their business, it’s equally important that account managers not be viewed by customers as acting in a sales capacity. Customers, after all, are buying into a high-level support relationship, not a sales relationship, when they purchase TAM services. Technical account managers best serve the company’s financial interests by not only monitoring their customers’ IT environment, but by monitoring customer satisfaction with their support programs and products.

About ServiceXRG

ServiceXRG specializes in helping companies develop and execute service and support strategies that strengthen customer relationships and optimize financial performance from service operations. ServiceXRG’s research provides a balanced perspective of the IT services industry with views from users, service professionals and suppliers. ServiceXRG combines years of real-world service industry expertise with a unique ability to collect, analyze and present high-quality industry data. ServiceXRG provides management consulting, custom benchmarking, competitive analysis and customer satisfaction assessment, and publishes a series of reports on industry trends and best practices. For more information, visit www.servicexrg.com.

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