Account managers (AM) and account executives (AE) are both an important part of an effective sales strategy. Simply put, AEs bring in new business and are often referred to as “hunters,” while AMs take care of existing business by “farming” the existing client for retention and additional opportunities.
Both roles fall into the sales function and are responsible for revenue generation, and often, in a small business, one employee handles both roles. Still, there are distinct tasks that separate an AE from an AM.
Account Executive Overview
Account executives are responsible for generating revenue from new and existing clients. They’re expected to hit performance goals and revenue quotas. In addition, AEs are usually responsible for a series of steps to win new business:
- Prospecting and lead generation: Prospecting means hunting for new opportunities. It involves researching prospective clients and finding creative ways to introduce their products. However, these tasks may eventually be assigned to a business development representative (BDR).
- Demos and meetings: Once the AE has successfully connected with a prospect, they must present their product. This means setting up a designated time to meet with the prospect. The meeting will consist of a presentation, pitch, and a client discovery portion.
- Responding to RFPs and negotiating contracts: The account executive will then draft up a quote, response to a request for proposal (RFP), or contract, depending on what their industry requires, and it will be handed to the customer for their consideration. Depending on the size of their company, a sales planner or assistant could be responsible for this step.
- Final sign-off: Once the contract is in the hands of the customer, it’s the AE’s job to continually follow up. More “wooing” and check-ins are necessary to convince the customer to sign the contract and officially become a customer.
Account Manager Overview
Account managers are responsible for client-facing efforts post-sale. AMs manage the relationship with the client, but do not confuse them with support roles (like a customer service agent). While they may be responsible for some fulfillment tasks, they’re the leaders responsible for the health of the account.
Their responsibilities include:
- Onboarding: The onboarding process will vary based on your industry. Think of onboarding as the customer’s introduction to your company. Customers should be onboarded quickly after they sign a contract.
- Retention: Keeping the client onboard is one of the most critical functions of account management. They must keep the client happy and fulfill their promises to prevent churn. From a revenue standpoint, it’s cheaper to keep existing customers than attain new ones.
- Renewal: AMs must have a strategy in place to ensure that the customer renews when their contract is up. To ensure renewal, an AM gauges how satisfied the customer is by doing regular checkups.
- Upsell and cross-sell: As the relationship progresses, account managers must uncover more sales opportunities. AMs get customers to buy other products or upgrade to a more expensive version.
Once an AE closes the deal, the customer is “handed off” to an AM to be taken care of. The AM now becomes the point person for day-to-day interactions with the client. While they don’t usually provide technical support, they do oversee the process.
While a person’s innate personality traits do make a difference, things like negotiation, networking, and how to be a better coach can be taught and can contribute to success in either role. Luckily, all of these topics are offered online through Idealliance’s SalesPro Fundamentals, meaning both new and veteran salespeople can stay on top of sales trends and best practices with minimal interruption. Learn more about this course by visiting SalesPro.
Account Manager vs Account Executive: An In-depth Look
Because account executive and account manager responsibilities differ, the personality traits must be slightly different as well. Generally, AEs have to be aggressive, or “closers,” to push the deal over the finish line. AMs are more relationship-focused and must prioritize keeping existing clients happy rather than continuously adding to the sales funnel through prospecting.
Pro tip: What makes for a good AE might not make for a good AM and vice versa. For this reason, we recommend these two roles be split within a company if possible. While this can mean more overhead, by doing so, it creates a team that can compensate for each other’s weaknesses and provide a great customer experience.
Below, we’ll break down the other main differences between an AM and an AE.
Role of an Account Manager
The role of an AM is to offer support and help develop custom solutions for customers and clients. While having an AM can be a more costly approach to customer service upfront, this role, when executed well, can turn existing customers into brand advocates, which helps your reputation and makes it easier to achieve growth from repeat business.
Determining the need for an account manager depends on your industry and your customers. The most common requirement for account managers is with any business that runs on a software as a service (SaaS) model or depends on repeat business. SaaS subscription models require satisfied clients to ensure renewal. Food and beverage distributors need an AM to reduce churn and earn repeat business.
The most vital soft skills for an account manager to have are:
- Empathy: AMs must not only be good listeners, but they must also be able to put themselves in their customers’ shoes. Empathy allows AMs to solve customer issues while looking out for their own company. Without empathy, customers can feel bulldozed, misunderstood, and disconnected.
- Collaboration: Account managers deal with several different departments and roles. They must be able to navigate different personalities and motivations. When it comes to execution, they’re juggling moving pieces of projects as well as people. AMs must have the ability to bring it all together.
- Leadership: Speaking of execution, leadership is vital in account management. AMs manage the account and take charge of its success, which is why those responsible for making sure goals are met and fostering relationships with the business’ most valuable customers are referred to as key account managers.
- Business sense: Account managers must understand how their business and their customer’s business make money. They must balance customer satisfaction with the goals of their own company. Understanding how the client makes money allows AMs to set proper goals. Knowledge of how their company makes money enables them to lead the account.
In theory, any business that requires relationship management can use an account manager. Account managers are common in the business-to-business (B2B) sales versus business-to-consumer (B2C). The range of industries is diverse, but some of the most popular industries for AMs are:
- High tech
- Banking and finance
- Food and beverage
- Employment agencies
Account Manager Pros
Account Manager Cons
Role of an Account Executive
An account executive’s role goes deeper than a typical “sales rep.” They’re more involved in the overall sales efforts. AEs are responsible for growing existing accounts and identifying new opportunities. Whether you need to hire an account executive will depend on the stage of your business.
Pro tip: Before you hire an AE, you’ll want to make sure it will be more profitable for your business to grow its current accounts versus acquiring new ones. You can do this by creating a sales forecast and then examining the accounts that make up the largest portion of your revenue. If you see that a handful of accounts make up 80% of your business, then chances are your business will benefit from an AE.
- Coachability: The best salespeople are willing to have someone help them achieve their potential. They’re willing to set their ego aside to improve their performance.
- Desire to learn: No matter how long they’ve been in sales, there must be a desire to learn and improve. Salespeople who want to learn are far more likely to be top performers.
- Proven performance: Clearly, there is a benefit to hiring people who have a record of success. Still, it’s worth it to dig deeper to make sure that success is directly tied to performance, as opposed to merely being in the right place at the right time.
- Motivation: Salespeople need to be passionate about what they do. An account executive needs to be aligned with your company’s mission and be excited about helping your customers.
Every business has some type of sales function. The title “Account Executive” is most common in the B2B world. The AE title is synonymous with selling higher-priced goods and services. AEs are used for sales cycles that are longer and more complex versus transactional. The AE is needed to give input and guide the customer along the sales process.
- Fashion agencies
Account Executive Pros
Account Executive Cons
Account managers and account executives are just two of the different titles that can be found within a sales team. However, while the titles and strategy behind either role are different, the job of both is ultimately to grow business.