On the surface, the definition of an account should be a very straightforward thing. If you still believe that, you haven’t been in revenue operations very long.
Sales territories are groupings of accounts assigned to a single account executive. Books of business for the account management team are also groups of accounts. How leads are routed is often also associated with how accounts are allocated.
If there’s any confusion about who owns what, it leads to squabbling and, more importantly, can create an inferior customer experience. It’s also in a salesperson’s best interest to increase the size of their territory (in theory) because they get more “at bats.”
Leads also complicate the issue in Dynamics, Salesforce, and Zoho CRM because they are weird hybrids of person and account. They inevitably proliferate duplicates or require complex lead-to-account matching logic entirely dependent on how your business defines an account.
How businesses define accounts depends on their go-to-market motions, which are determined by how they sell into companies and whether or not there’s potential to sell into multiple departments, business units, or affiliated child accounts.
In this article, we’ll discuss a few variations of how companies define accounts that fit their go-to-market strategy and common gotchas with each definition.
Most of the following will also apply to Startups, but we didn’t start there because many companies avoid targeting them because they are unstable entities with a lot of demands due to lack of cash.
Mid-Market companies typically:
Mid-market companies allow CRM administrators to have very flat account hierarchies because there should be only one account. Even in business group selling scenarios - where there may be multiple kinds of account executives assigned to a single account (more on that later) - it shouldn’t necessitate breaking accounts into separate records.
We recommend keeping your definition of an account as simple as possible to avoid complicating reports with hierarchies and opening up your sales management team to a lot of squabbling. In this case, the definition that makes the most sense (unless something truly bizarre happens) is that an account is a location associated with headquarters.
The most straightforward definition of an Enterprise Account is the central headquarters or location where all final decisions are made. If the decisions are centralized, the headquarters should be assigned as the parent account, and child companies may be clustered in several layers beneath them to capture regional and district offices.
Unfortunately, Enterprise accounts rarely centralize decision-making, and if you’re dealing with a Fortune 500 company, they often have business units and regions that are separate from one another. Let’s take SC Johnson (not to be confused with Johnson & Johnson) as an example.
We’ll use Organimi’s chart as a starting point:
There are executives across several major divisions: Pharmaceuticals, Manufacturing, and MedTech. Within those divisions are several brands. In manufacturing and household items, they own Glade®, Kiwi®, OFF! ®, Pledge®, Mr Muscle®, Duck®, Baygon®, Raid®, Ziploc®, Scrubbing Bubbles®, Windex®, Autan®, Bama®, Shout®, Mrs Meyers®, Babyganics®, Method® and Ecover®.
Depending on the features of your product and each brand’s dedicated management hierarchy, you may have accounts for each brand within each division, and ownership may be allocated to one account executive but is more likely divided across specialists in manufacturing, pharmaceuticals, and medical technology.
It’s also important to consider how international offices are sold and whether there are restrictions on which countries may purchase your products. For example, if you sell into Oil & Gas, you may be primarily selling into headquarters. However, let’s say you sell video surveillance products. In this case, you could sell to regional offices or each satellite location if they have independent security advisors.
Your definition of an account may differ from your definition of a logo. A logo may be defined as a brand, or it may be an umbrella corporation. An account should be defined as a location with independent decision-makers as determined by your selling motion. Whether or not a single seller gets assigned all associated accounts depends on your product suite, seller skills, and management needs.
We encourage you to raise the following possible complications with your management team and determine how to manage these scenarios as early as possible. This will help you drive the definition of a lead to align with what is possible to accomplish in your systems – or, at the very least, understand what kind of tools you’ll need to support the logic your business wants to use.
Lead-to-account routing
We’ve already discussed the complications inherent in lead definitions here. Lead-to-account matching is a complex issue without layering in Enterprise account use cases.
Your team will need to determine whether regional “tells” exist. For example, do all of the company employees in Germany have a .de email extension, or does everyone have the global .com address? If they all use the same .com email address, you’ll need a combination of IP address enrichment and other data sources to route individuals to their “home office.”
Regional mapping has become even more complicated in the remote era. It’s not uncommon to have employees scattered across countries, so your enrichment mapping will likely be hit or miss.
Reporting
The more complicated your definition of an account or logo, the more complexity you’ll introduce to your account hierarchies. The depth of account layers will determine what’s possible to report on or summarize in your CRM and what you’ll need to export into a more robust reporting layer.
Remember that managing territories and minimizing confusion on the sales team will be equally problematic if reporting is complex.
Legal considerations
We advise you to consult with your finance and legal team when you:
Specific verticals have extremely complex account hierarchies. Healthcare, franchises (restaurants, consumer goods, convenience stores, gas stations, auto dealerships, etc.), government agencies, and educational institutions are all great examples of multi-tiered account structures.
The correct way to define an account will depend on how your sellers can sell your product. Each account should be separate if your product can be sold in multiple locations. If some accounts have centralized decision-making (let’s say one healthcare conglomerate centralizes all IT purchasing decisions through their headquarters) but others are decentralized (the regional offices have their own independent IT purchasing), then you’ll need to default to an extensive parent-child hierarchy that may be several layers deep.
Make sure you work with legal, finance, and the executive team to determine whether a new “logo” is a brand or can align with the decision-making structure. I’ve seen this done both ways, but I suspect it’s meant to stand for the brand. Accounts are typically defined as physical locations, although you may need to create shell accounts for regional groupings if there isn’t a designated centralized office.
The issues you’ll run into with enterprise accounts also exist here. You must work closely with sales management, legal, and finance to get everyone to agree to the definition of an account, how to handle territory disputes, and how to think about commission splits.
Reporting will be complex, and account setup makes using a tool like HubSpot challenging. Dynamics and Salesforce can accommodate routing, account setup, and other nuanced logic, but your reporting will be complicated if your account hierarchies exceed two tiers. I recommend planning on having a database or data lake with skilled analysts who can translate the data into a visualization layer.
Integrating a database with complex logic also has a lower processing load when compared to flows or process automation in CRM.
I also recommend researching specialized data vendors and doing a “bake-off” to compare data sources. It’s not uncommon to request a data vendor to enrich 100 of your database’s accounts and then have other vendors repeat the same for one-to-one comparisons. This is a great way to compare data sources and understand which vendors are better at what kinds of data.
Multiple business units mean that a corporation sells different kinds of products. Your business will need to decide whether an account is a brand within corporate or if an account is the kind of business unit those brands roll up into.
A great example is the SC Johnson example we went through above. Depending on your business model and how SC Johnson delegates or centralizes decision-making, you could have separate accounts for each brand or individual accounts for the industry that the business unit supports (consumer goods/manufacturing, pharmaceuticals, and medical technology).
Another great example is Microsoft. Your business may think of the Redmond Headquarters as the logo or main account. However, decisions are often made through their product line-oriented divisions like Windows, Office, Xbox, and Azure.
Acquired companies are also a complicating factor. Some businesses allow acquired companies to operate independently and make decentralized decisions, but these same corporations may merge companies into the greater umbrella. These will need to be handled on a case-by-case basis.
The issues you’ll encounter with enterprise accounts and complicated verticals also exist here. You must work closely with sales management, legal, and finance to get everyone to agree to the definition of an account, how to handle territory disputes, and how to think about commission splits.
Reporting will be complex, and account setup makes using a tool like HubSpot challenging. Dynamics and Salesforce can accommodate routing, account setup, and other nuanced logic, but your reporting will be complicated if your account hierarchies exceed two tiers. I recommend planning on having a database or data lake with skilled analysts who can translate the data into a visualization layer.
Integrating a database with complex logic also has a lower processing load when compared to flows or process automation in CRM.
When your sales team can sell products into different departments, I do not recommend splitting them into various accounts. Suppose you also have a complex account structure because you’re dealing with enterprise organizations, franchises, or some other kind of account relationship. In that case, you’ll compound the problem exponentially by allowing multiple accounts per business group.
Instead, work with your business leaders to decide what kind of account team structure makes sense, whether or not teams selling different types of products in the same account need to know the details of any other contact with the account (it’s a better customer experience if it looks like your teams understand what one another is doing at a minimum), and consider leveraging record types and conditional page layouts combined with profiles and permission sets.
I worked for a Fortune 100 company with one business unit selling inventory tracking services to car dealerships and another selling digital marketing services to the same dealerships. These business units had different brands and selling motions. Their products were only loosely related (the website by Group B integrated with the inventory tracking solution by Group A). We managed just fine with one account per physical location and kept the page layouts from overwhelming by leveraging record types, page layouts, role hierarchies, account teams, and profiles. Because the two teams were operating under different brands, we could get away with hiding one profile’s opportunities, tasks, and other records from the other brand while still centralizing our data.
If you don’t have clear rules of engagement established with your sales team or they aren’t rigidly enforced by management, you risk a lot of infighting. Make sure to document clear rules of engagement with the input of your leadership team and ensure enablement or sales management covers it with their team.
The big deal in defining who should contact whom will be enrichment tools to ensure the correct title and department are associated with key contacts. You’ll also need to regularly audit page layouts and processes for the sales team to ensure there haven’t been any lead routing or page sprawl breaks through integrated tools and added fields.
People accounts may make sense in businesses that have a direct-to-consumer sale that doesn’t require a business email address to be associated with their account. This may happen with free trials as well. In these cases, you’ll need to work with your product team to determine the most streamlined process for activating and recording these transactions.
Person accounts are beneficial when a standalone product can be sold to an individual without requiring the rest of the organization to buy in. For example, I have a few applications I use for my job that I expense rather than route through corporate because other team members don’t need these systems. Although I get reimbursed, if I leave the company, the license will go with me, and the next person may not choose to use the same application.
Regarding free trials, consider requiring a business email, particularly if your solution is a multi-license or enterprise-grade product. Sometimes, personal email freebie accounts are routed to a catch-all account rather than relying on enrichment or the end user to associate the appropriate email address. While the intention here is good, inevitably, you’ll end up with a catch-all account with hundreds of related contacts. This may not bother you or your business leaders but will complicate reporting.
As a revenue operations professional, it benefits everyone in your company if you advocate for keeping things as simple as possible. Remember that multi-tiered account hierarchies are complicated to report on in CRM. If you get confused trying to figure out where the decision maker and products are, so will everyone else.
The other keys to success will be:
Consistency is key. When exceptions are made, it’s time to reevaluate whether you have the correct definitions in place or if your rule enforcement is too lax.
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