The dynamics of selling in SaaS are fascinating. Like everything else in life, the Pareto Principle applies to business too. Oftentimes, 20% of your customers generate up to 80% of your revenue. This dynamics—in essence—is what differentiates key customer accounts from all others.
Key accounts don’t just help your business grow rapidly, they are your long-term insurance against a competitive marketplace and a way for you to maintain a healthy NRR (net revenue retention) streak. Identifying these key target accounts can be tricky if you don’t have an account-based sales strategy yet.
And that’s what this blog aims to accomplish. In the next few sections, we will go over what exactly qualifies as a key account and how your sales development team can identify them early on during your prospecting stage.
What are key accounts?
Different companies define key accounts differently. For some, key accounts are customers who either bring in a lot of revenue, offer higher profit margins, sign up for a multi-year contract, or have a good reputation in their industry.
Most sales teams tend to define target accounts based only on the revenue they contribute or the deal size they represent. While those are relevant indicators, they don’t necessarily define the best traits of key accounts.
Here’s an example:
To hit a revenue target of $100 million annually, you can either convert 10 million customers to pay $10 each. Or, you can get just 10k customers to pay you $10k each. Both approaches will lead you to the same outcome—but your choice of customers varies.
The paradox in SaaS is that your biggest customers are not always your best customers. Instead, they might be the most difficult to work with. They are demanding yet cumbersome in the way they approach things. They might have complex integration and compliance requirements. They most likely look at your solution as a commodity among the dozens of products they have in their tech stack.
If you are bucketing your biggest customers as your company’s key accounts, you are probably approaching your account-based sales strategy only from the lens of revenue and profit. To identify key accounts that offer you true growth potential, you need to dig deeper beyond the revenue metrics.
If you were to define key accounts in an objective sense, they are your most valuable customers not just in terms of profit and revenue. Key accounts are strategic customers that complement your growth in many ways—which includes improving your revenue potential.
Identifying key accounts sounds all honky-dory, unless you have to actually find them. So how do you go about actually identifying them? Let’s find out.
Tips to identify key accounts
It’s important for your business to identify your key customer accounts because they hold the biggest clues to your product’s success. Identifying key target accounts is like striking gold—they help you discover similar new opportunities that will put you on a fast track to the next level of growth.
And like we discussed earlier, it’s not always about the biggest account in revenue—there’s so much more to consider when identifying your key accounts. Let’s go through them one by one.
Qualify accounts based on your product-market compatibility
Product-market fit (PMF) is one of the earliest and biggest indicators of a business's success. Without it, a startup fizzles out much before it grows into a promising scaleup. If you come across customers who are “wowed” by your product (or its differentiation), it’s a hint that they possibly are your key customers. They likely are customers who not just see value in your product but have the propensity to become your brand advocates.
In the early days of your business, identifying key target accounts can also help you validate your PMF and define your buyer persona down to a T.
But the technique of testing the compatibility between you and the prospects applies to your business even if you have already figured out your PMF and know your ideal customer profile (ICP) inside-out. PMF is a continuous data point that helps you identify your key customer accounts even when your business has moved past the initial PMF hurdles.
When you come into contact with the ideal key accounts—regardless of which stage of growth your company is in—they are likely to:
- pay for your product without hesitation
- have great adoption of your core features
- support your product’s current offerings
- be patient with your product’s roadmaps
- offer constructive feedback
- refer your product to their network
Pro-tip: When you come across customers who are wowed by the differentiation that your product offers, capture those moments and customer insights. It will help you highlight those features in your marketing and attract more such key accounts.
Look for signs of shared values
Value alignment is an important indicator of a profitable long-term relationship because it means that your organization and the customers are in the business for similar goals. From a customer loyalty angle, 68% of customers say they are likely to stay with a brand that shares the same values as theirs.
The overlapping of values and beliefs is the reason why people buy from people who they like and trust. It’s almost impossible to think of an example of customers who buy (and do so repeatedly) from brands that go against their value systems. That never happens.
The right kind of prospects will gravitate towards your brand when they see value in the product that you offer. Most buyers buy from brands that they believe are reflections of who they are.
If you have prospects who share common beliefs and interests and talking to them reminds you of your own brand values, it’s a signal that they are potential key accounts that you can bet on.
Double down your account-based selling resources to retain them for the long haul.
Be active in social communities
If you are depending only on prospecting tools to find leads for your business, you are missing out on the power of social communities. Casting a wide net during the early stages of your prospecting is great, but finding prospects who are a match to your problem-solution fit is what helps you find your best key accounts.
Let’s think of an example. You might be using tools like ZoomInfo or Lusha almost every day to build a list of prospects who are a possible match to your product offerings. But no matter how hard you try, 4 out of 5 prospects from those lists have an excuse to not book a meeting with you. The tools you are using aren’t the best source of information for the prospects who have a burning need for your solution.
Now imagine if you spend 20-30 minutes every week monitoring software review sites like G2, Capterra, or FinancesOnline to get a feel of the customers’ pulse. Those forums—and other social communities like Facebook Groups, Quora, LinkedIn, and Reddit—are breeding grounds for finding the perfect leads because people in these groups often discuss the tools they are using, what they are happy with, and the ones they are not happy with.
In one of our podcast conversations, Carl Ferreira, VP of Sales at Refine Labs, shared that there have been times where he demoed third-party tools that he used to prospects who were considering buying the same tools and wanted objective opinion from peers in their social community.
The beauty of social media and communities is that it helps you have natural social conversations and not “sell” to people in the conventional sense. Another advantage—the majority of SDRs don’t leverage social selling in their outreach strategy. Therefore, it gives you a competitive edge in your prospecting.
Members in these communities have a pressing need for a solution like yours and it’s easier to close the sales cycle with them because of their burning requirements. In the long-term, they are likely to be your key accounts because there’s a natural fit between what you are selling and what they need.
If you want to go the extra mile, build a LinkedIn content strategy to turn your whole prospecting game around. It’s no news that the top 10% of sales reps close more deals simply by being active on social media. So if you are consistently active on social platforms that your prospects are known to frequent and post about topics that are relevant to them, you can even turn your outbound prospecting into an inbound source for generating a steady stream of leads.
Identify their revenue potential
Identifying key accounts means selecting customers who have the biggest potential to grow—not necessarily your current biggest customers. It’s tricky to find the ones who fit the bill because they might come across as small or medium-sized businesses with limited revenue contributions.
Figuring out the right key accounts that indicate a strong revenue potential requires you to do some homework on your part. You might have to look at their company’s performance, the industry they operate in, the competition they are stacked against, their growth opportunity, and other relevant data points.
Map those findings with other answers you may have such as:
- How big are their pain points?
- How well does your product solve their problems?
- How frequent is their need for your product?
- What can you do to make them use your product more?
Finding the right account with a long-term revenue potential means finding the sweet spot between their growth opportunities and your product offerings. If they complement each other—and if there’s scope to scale that partnership—you have a definite match. Give these customers the due attention they deserve and invest your sales resources to ensure a sustainable partnership.
Use the right tools to get account-level insights
All customer accounts look the same without concrete, account-level data. The right data differentiates casual shoppers who are merely curious about your solution from serious buyers who have an urgent need for the problems you solve.
A rule of thumb in identifying key accounts is to look at their engagement metrics with your brand—from the first time they come into contact with your sales team. The more engaged an account, the shorter the deal cycle and the better the yields.
To that end, a deal intelligence tool helps you extract meaningful insights about prospects who can prove to be key accounts. A deal intelligence software gives you key insights such as:
- How engaged is an account in your sales conversations?
- What are the customers most interested in?
- Who are the key stakeholders involved on the buyer side?
The overview of your prospect’s engagement across deals such as calls, meetings, and emails helps you understand the overall account health, i.e. which of your deals are progressing versus the ones at the risk of being stalled.
The detailed insights into the different conversations, activities, and deal-level interactions are helpful for you to analyze which customers are most willing to buy from you—a high-level signal that they might be your key account.
Here’s everything that you can analyze if you use Avoma’s deal intelligence capabilities:
Avoma’s deal intelligence capabilities extend the power of conversation intelligence to RevOps. It helps you get a better perspective on whether you are working on the right opportunities and if you have poured enough resources for each deal. Finding the right accounts to go after is easier when you have the right data at your disposal.
Identified the right accounts? Now it’s time to accelerate
Over a long time horizon, your best customers are usually the ones who go on to become your most loyal and profitable accounts. So, once you know what kind of customers (key influencers, decision-makers, industry domain) are the best fit and most passionate about your product’s approach to solving their problem, you can start reaching out to look-alike accounts.
It’s important to start identifying your key customer accounts from day one so that the customer success team can get involved at a very early stage, enabling a smooth account handoff. The early involvement gives them the context to invest the right amount of support and resources to deepen the relationship further.
Finally, leverage conversation intelligence to build a culture of knowledge-sharing within your SDR team so that you can spend the right energy on the right accounts. Build a culture of analyzing insights about customers at each stage of their interaction with your brand so that you can capture critical data that can help you improve your sales playbook.